One group price fits all. But should it?
When pricing a show these days, whether it’s on Broadway or in any theater around the country, there are four categories a producer needs to consider.
- Premium Price
- Regular Price
- Discount Price
- Group Price
The first three prices are generally pretty fixed, as they are announced publicly, and can be purchased with the click of a button from anywhere.
The Group Price however, is much different. You need a minimum number to qualify for the discount. And most importantly, you need to speak to an authorized agent to get that discount.
Because of this difference, there may be a way for us to increase the revenue we receive from the groups market (on Broadway, groups represent about 9-10% of Broadway sales), if we follow good ol’ fashioned sales strategies.
Here’s how it works on Broadway right now.
The Producer, GM and Marketing Team come up with a group price that they think will sell the most tickets. And they distribute it to the Group Sales Agents around town. Group buyers call up, ask for a show or get a recommendation, an order is placed and filled at the price that was distributed.
The revenue-reducing problem we’re having is that the group prices that are distributed are usually the result of the “what are the other shows selling for” question. And what happens, is that shows end up competing with one another, and forcing the Producers to keep their price low to be in line with “the market,” for fear of losing a group to another show. It’s somewhat of a race-to-the-bottom.
But it doesn’t have to be.
If you are looking to purchase any high-end luxury product (and that’s what theater is), be that a car, a boat, a stereo, etc., there’s usually some wiggle room between the sticker price, and the final price. There is a sticker price, maybe even a sale price . . . and then on top of that the salesman usually has room to negotiate, in order to try to get the most revenue from the sale. He doesn’t automatically go to his bottom. He analyzes the customer, the time, the amount of the total sale, and does what he can to close it at the highest rate.
So my question is, why are we providing our group sales agents with only one price? Why not give them three . . .
For example, instead of saying, “Group sales prices for BLOG THE MUSICAL are $79.50,” why can’t we say, “Group prices for BLOG THE MUSICAL are $99.50, $89.50 and $79.50. Use whatever price you feel appropriate.”
Why should the agents love this idea? Because it empowers them to make more money for themselves since they are paid on commission.
Not all group buyers are the same. Someone cold-calling up an agent or even your box office and asking for 10 tickets to BLOG THE MUSICAL who didn’t even know there was such thing as a group discount (charge them $99.50 and they’d probable be thrilled) is much different from a client that an agent has had for years that brings groups of 50 to shows but doesn’t know what a blog is (I’d offer him $79.50).
There’s no question there is more work here . . . going to the lowest price is definitely the easiest way to make a sale . . . so it might to be tough to see this idea take root in a lot of companies.
But if there’s one formula I believe in, it’s more work = more success.
So let this concept take root in yours.
Negotiate with your buyers. Getting the most for your product is not a sin. It’s salesmanship.
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