And there were two whole sessions dedicated to this explosive topic today: the first included five experts with success stories from places like Stratford, The Pantages in LA and good ol’ Broadway in Beantown. The next session was an open forum town hall Q&A, which gave the League constituency a chance to ask all the questions they had about how to implement best practices for Dynamic Pricing in their markets. (The good news is that everyone seems to be doing it to some extent . . . now we just all have to be doing it better.)
Here are five tips that I picked up from yesterday’s speakers about Dynamic Pricing:
1. Look back before you look forward
The best way to pick your prices is by examining the data of how your house has sold over the past year or two or twenty. You’ll see patterns as to what sells first, and what sells most, and vice-versa, and you can pick your prices to make the most of the best and the worst. This is a challenge for Broadway Producers, because we don’t have access to the data of the shows that have played the theater we’re in before us . . . but the theater owners do. :-) I’d expect that over the next couple of years, you’ll see the theater owners diving in even deeper than they already to do to study the data in individual theaters to help everyone maximize everyone’s revenue. (Remember, they make a percentage of the gross, so it’s in their best interest as well as yours.)
2. Drop the word discount from your vocabulary.
With dynamic pricing, a decrease is an adjustment, not a discount. While there’s no question that the words “Sale,” “Discount,” and “Special Offer” are calls to action for consumers, if we could offer lower prices on off nights/seasons that appealed to them without using the above-mentioned dirty words, we might actually train them to buy more “adjusted” tickets at higher prices, while at the same time reducing our spend on media that we use to sell those discount tickets.
3. Sell your house slowly
More than one Presenter talked about how they didn’t put their whole house on sale at the top of a sales cycle (this was a fascinating one for me). Instead, they held back seats (the ones that they knew, from consulting their data, probably wouldn’t sell anyway). They only sold what they wanted to sell, and a variety of prices, and then opened up the other areas. The Pantages has had terrific success with this theory, not only increasing revenue, but by prettying up their houses as well . . . packing the orchestra and not having people in their balcony staring at row after row of empty seats.
4. Forget the phrase ‘set it and forget it’.
Set a weekly meeting to look at your most recent sales patterns, because every show is different. By taking 30-60 minutes on the same day every week, you and your team can make sure you are making the most of every market shift. Dynamic Pricing is like advertising. It requires constant testing and constant tweaking to make the most out of what you’ve got.
5. Get your staff on your side.
As Jonathan Tisch remarked earlier in the week, it’s imperative that the message coming from management is the same message that is coming from your phone operators, down to your ushers. Higher than “usual” ticket prices can cause some folks to use those horrible G words like gouging and greed (Although a few presenters I spoke to said they have zero complaints from customers when they went above their typical ticket price, because the show was such a “must see”.) Make sure your employees are scripted to explain the reasons behind Dynamic Pricing to customers that ask, and make sure they really believe it. Because if they don’t understand that higher prices on some shows, allows you to give out lower prices on others, then, well, they probably shouldn’t be working for you.
One of the reason’s Broadway grosses keep growing at the rate they are growing without a significant increase in Broadway attendance is because of Dynamic Pricing. I suspect we’ll see a lot more conference sessions about this important “art” in the future. Maybe we’ll even have a conference dedicated to it like this one.
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