With the holidays looming on the
horizon, you may start to hear whispers about an increasingly common practice
called variable ticket pricing. One of the trickiest parts for a theatre
organization is price setting. Demand changes seasonally, audience demographics
shift with time, and a whole host of other uncontrollable factors can have a
hand in your ticket sales. Variable ticket pricing allows for flexibility
across the fiscal year (yet another reason you should be selling tickets in
advance and not
just at the door).
What exactly dictates a variation in
ticket prices? Well, there are a few factors:
DemandWhen shows are popular, demand
increases – this is how blockbuster Broadway shows manage to skyrocket ticket
prices after the Tony Awards or New York Times reviews. Competition If other theatres in your area
maintain lower prices, this may force your hand and limit how high you can mark
your tickets. Guests may gravitate towards the cheaper option.SeasonTheatres experience seasonal impacts
in sales. Like most retail examples, the holiday season often brings a large spike
in popularity while the summers may cool down your box office.
What does variable ticket pricing
Surge pricing Ticket prices rise as demand
increases and competition grows between buyers for the same show.Discounts Tickets are marked at a lower cost,
or guests with certain qualifications may have access to a discount code, in
order to boost audience numbers or draw in new guests.
So, let’s consider the pros and cons of variable ticket pricing. The number one pro is an increase in revenue during the busy seasons, bulking up your annual budget and providing a safe cushion for times of scarcity. Another pro might be marketing if you offer special discounts for exposure and new audience interest (check out ways we suggest using discounts as a strategy here). There are downsides, too, though. A con might be compromising your guests’ trust. If you have had stable prices for multiple years and suddenly implement the practice of surge pricing, guests may feel exploited and your audience could shift. Another risk is raising prices too high, allowing your competitors to poach guests looking for a cheaper night out.
No matter what you decide, weigh the
choices carefully. Be transparent with your audiences to avoid mistrust and
monitor your price extremes. Talk to your guests and ask if they would be
willing to pay more in the busy season and make sure to gauge where your
competitors are keeping their prices. Variable pricing can be a smart tool for
ticket sales, but make sure you implement any new practice from a place of
education and integrity.