Posted by Brian Mahoney, Vice President – Ticket Sales and Todd D. Rappaport, Marketing Content Director
“Insanity: doing the same thing over and over again and expecting different results.”
This definition could explain some longstanding ticket pricing practices on Broadway. We all know that there are sections of the theatre—for some nights or some shows—that rarely sell at full price. Some of these seats might sell at a discount price or for half-price at TKTS.
But then about the seats that are consistently unsold night after night. Why would we still expect that these seats would sell at full price, and how could we continue with that pricing strategy? If we look at the patterns and don’t do anything about it, that’s insanity.
The late Rick Lester from TRG Arts spent time trying to educate the Broadway community. He would create charts showing over time how often seats sold at the established box office price (a.k.a. the regular/full price), how often seats sold at less than regular price, and how often seats went dead. The idea was maybe some seats needed to be priced differently to sell (at least for certain performances or times of the year).
The industry likes to think that if we make discount codes available, all price-sensitive customers will be able to find them. But people walk away from box offices every day when the prices don’t align with their budget or their perceived value, and we see shows that have plenty of inventory but low conversion rates online. Sure, we make discounts available, but not all customers know where to look, and those are the customers who are more likely to drop off the purchase path.
At the box office, one of the biggest reasons customers leave (even when there’s inventory) is that they don’t have the complete information on pricing. Why would a customer pay $70 for a rear mezzanine ticket when they could wait until TKTS opens and get an orchestra seat for the same price? A treasurer at one theatre described a show that always had top-price seats available, and customers would ask, “Is that all you have?” (Even though the show had plenty of discounts on the market.) We’re often letting customers walk away from the box office because they don’t know all the pricing options available to them.
So why make interested ticket buyers work so hard to find their right price? Unless your show is selling out all its top-price seats, why not have more price points to meet each customer’s budget and perceived value, creating opportunities for upgrading price and location?
Which brings us to dynamic pricing—adjusting prices regularly in response to customer demand. The STAR System offers a lot of flexibility, which allows us to build theatres with many “zones.” This means that new price sets (or price levels) can easily be created on short notice. In short, our system is built for the kind of dynamic pricing and re-pricing that can help move inventory.
Now, in a show’s ideal world, dynamic pricing would go up to meet a huge demand for tickets, but we know that’s often not the reality on Broadway. Ticket prices are set months in advance, but they may turn out to be prices that customers are unwilling to pay. With dynamic pricing, shows having trouble moving full-price seats can lower prices (virtually on the fly) to make tickets more attractive to price-sensitive customers. Shows that can only sell a portion of the top-price orchestra seats per performance may benefit from having more availability of lower price points.
So when you’re thinking about your pricing strategy, make sure you’re considering using dynamic pricing to help move full-price tickets. It might just help your show avoid the pricing insanity of years past!
“Insanity: doing the same thing over and over again and expecting different results.”
This definition could explain some longstanding ticket pricing practices on Broadway. We all know that there are sections of the theatre—for some nights or some shows—that rarely sell at full price. Some of these seats might sell at a discount price or for half-price at TKTS.
But then about the seats that are consistently unsold night after night. Why would we still expect that these seats would sell at full price, and how could we continue with that pricing strategy? If we look at the patterns and don’t do anything about it, that’s insanity.
The late Rick Lester from TRG Arts spent time trying to educate the Broadway community. He would create charts showing over time how often seats sold at the established box office price (a.k.a. the regular/full price), how often seats sold at less than regular price, and how often seats went dead. The idea was maybe some seats needed to be priced differently to sell (at least for certain performances or times of the year).
The industry likes to think that if we make discount codes available, all price-sensitive customers will be able to find them. But people walk away from box offices every day when the prices don’t align with their budget or their perceived value, and we see shows that have plenty of inventory but low conversion rates online. Sure, we make discounts available, but not all customers know where to look, and those are the customers who are more likely to drop off the purchase path.
At the box office, one of the biggest reasons customers leave (even when there’s inventory) is that they don’t have the complete information on pricing. Why would a customer pay $70 for a rear mezzanine ticket when they could wait until TKTS opens and get an orchestra seat for the same price? A treasurer at one theatre described a show that always had top-price seats available, and customers would ask, “Is that all you have?” (Even though the show had plenty of discounts on the market.) We’re often letting customers walk away from the box office because they don’t know all the pricing options available to them.
So why make interested ticket buyers work so hard to find their right price? Unless your show is selling out all its top-price seats, why not have more price points to meet each customer’s budget and perceived value, creating opportunities for upgrading price and location?
Which brings us to dynamic pricing—adjusting prices regularly in response to customer demand. The STAR System offers a lot of flexibility, which allows us to build theatres with many “zones.” This means that new price sets (or price levels) can easily be created on short notice. In short, our system is built for the kind of dynamic pricing and re-pricing that can help move inventory.
Now, in a show’s ideal world, dynamic pricing would go up to meet a huge demand for tickets, but we know that’s often not the reality on Broadway. Ticket prices are set months in advance, but they may turn out to be prices that customers are unwilling to pay. With dynamic pricing, shows having trouble moving full-price seats can lower prices (virtually on the fly) to make tickets more attractive to price-sensitive customers. Shows that can only sell a portion of the top-price orchestra seats per performance may benefit from having more availability of lower price points.
So when you’re thinking about your pricing strategy, make sure you’re considering using dynamic pricing to help move full-price tickets. It might just help your show avoid the pricing insanity of years past!
RSS Feed
