Your Online Ticketing Software Must Handle Your Pricing Strategy
Ticket Pricing Strategy Questions
We suggest that a pricing strategy consists of answers to the following questions:
- Should we have assigned seating or general admission?
- Should we assign different prices to different seats?
- Should we have some degree of dynamic pricing?
- Should we charge service fees?
- Should we offer discounts?
- What should our prices be?
Your online ticketing software must handle your ticket pricing decisions
You will want to ensure that your online ticketing software can handle whatever set of answers you come up with to these questions. For example, if you decide on assigned seating, with 25% of your seats premium priced with different prices for students versus adults and the ability to offer military discounts, your ticketing system needs to be able to handle that.
In a future post, we offer suggestions on how to answer these questions. In this post, we set out the background for addressing these questions.
Unique Pricing Challenges
Why is defining ticket prices for an event so difficult? Well there are unique characteristics and challenges that show producers have. Rafi Mohammed, author of The 1% Windfall: How Successful Companies Use Price to Profit and Grow, in a podcast interview with Harvard Business Review describes three challenges in setting ticket prices:
- demand uncertainty
- brand and goodwill concern
- demand comes in waves
“ … the first is, there’s just a great deal of uncertainty when a ticket price is set. And so one of the key reasons is due to this uncertainty, many sports teams and musicians tend to be conservative, and set a low price. The second key reason is there’s generally a hesitancy to set prices too high, because there’s a brand or goodwill associated with these entities, and they don’t want to set prices too high to damage that.
And the third sort of interesting thing is that demand comes in waves. So when tickets go on sale, there’s a lot of demand initially, but there’s also more demand over time. So, for instance, in the music market, the sort of rule of thumb is whatever you sell in the first five days, you double that, and that’s going to be your total attendance. So there’s this disconnect between selling and when the demand arrives. So a lot of times people just speculate and buy tickets, and they buy it up when tickets go on sale and later sell them to people who want tickets at a later date.”
Typical Ticket Pricing Requirements
So, you will need to define your pricing strategy within the context of these challenges. And, you will likely want to experiment a bit – changing the strategy for different events. Given these challenges, if you are selecting online ticketing software, you will want to ensure that it can handle the following potential pricing requirements:
- Assigned seating pricing
- Any seat can have any price
- Any seat can have multiple levels of prices (e.g. Adult, Student)
- Ability to change prices
- Ability to offer discounts and limit those discounts to certain time periods
- Ability to limit the number of tickets that can be purchased using a promotion code
- Ability to copy a pricing strategy from one event to another
In future posts, we will further explore the unique challenges with event ticket pricing and offer opinions on the best pricing options.