Why did they change their approach? How has it been received? What does this mean for their consumers? Keep reading to find all of your answers!
What’s Up With StubHub?
Ebay Inc.’s StubHub is the United States’ biggest reseller of event tickets. After going the “service-charges-at-checkout” route for a number of years, they recently switched to “all-in” ticket pricing. They began testing this idea on their MLB tickets in 2013 and found that the concept was well-received by consumers. Years of consumer research show that fans hate seeing their final ticket price at the checkout being increased with additional fees and service charges.
Switching It Up!
StubHub’s Global Head of Communications, Glenn Lehrman, stated that the new all-in pricing model has driven a 10-point increase in customer satisfaction. However, three months after StubHub eliminated what it said had been the single biggest annoyance to most of its customers, its sales have taken a hit! In fact, some ticket brokers are saying that their StubHub sales have fallen anywhere between 15% to 50% since the pricing change came into effect.
To win back customers, StubHub started to slash their buyers and sellers fees, which cuts into its final profit margins. StubHub has reportedly reduced their buyers’ fees to as little as 2% from 10% of the base ticket price, and have also considerably lowered sellers’ fees.
The Bottom Line
Ezra Azizo, President of S4K Entertainment has said that “people are not that smart,” adding that the average ticket buyer will still be more likely to choose the lowest listed price. He says that they are not “going to realize the added fees at checkout.” Mr. Azizo might want to give the average ticket buyer a little more credit! The Ticketmaster Class Action Settlement wouldn’t be happening if ticket buyers didn’t realize what was happening.
While there is an initial mentality switch with upfront ticket pricing, we think that the end result should be a more positive purchasing experience for the consumer. Advertising the total cost of the ticket upfront to the consumers eliminates the surprise checkout fees. Most people love surprises…but nobody likes that one!
But this “all-in” ticket pricing still leaves a big mystery for the consumers: how is their money really being distributed between StubHub and the individual seller or broker?