What are leading practices in setting an event pricing strategy?

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Answered by: David, An Expert in the Event Planning - General Category
Event organizers are faced with the daunting task of deciding the prices for their tickets. Specifically, they must address questions like the following:

1) Should we have one set of prices for all seats, or should we price different sections of our venue differently?

2) Within each section, should we offer reduced prices for certain groups - for example, students and seniors?



3) What will we do if we find demand for the tickets is higher or lower than we anticipate after we set our prices and start selling tickets?

The answers to these questions comprise what we call your event pricing strategy. Answering these questions is complex because of the uncertainty of demand and the difficulty of changing ticket prices once they are announced. This post discusses leading practices for each of these three questions. Consider an example scenario:

Scenario



You own a 3,000 seat venue, and you have organized a concert featuring a reasonably well-known classical singer. Before setting prices, you would want to think through what the demand is likely to be for tickets to this event. Basic economics tells us the higher the price, the lower the demand.

A good tactic is to write out what you expect demand to be at different price levels - your demand curve. For example, you may expect the demand curve to be the following:

At $40, demand is likely to be 3,000 tickets.

At $70, demand is likely to be 2,000 tickets.

At $90, demand is likely to be 1,000 tickets.

Having thought through the anticipated demand at different prices, you are now in a better position to set your event pricing strategy.

1: Assign Different Prices to Different Sections

It is seldom a good idea to assign the same price to all seats in the venue. In our example, with a single price approach, filling the venue would require us to price all tickets at $40. However, we know that some people are willing to pay substantially more. Allowing them to pay more for premium seats will not only increase revenue, but will give the customers what they want.

2. Provide Senior and Student Pricing

Our research shows that you can sustain a higher regular price if you offer reduced prices for students and seniors. This is another approach to improving revenue while providing customers what they want. Most people are willing to pay more for regular tickets than for senior or student tickets.

3. Fine Tune Pricing to Adjust for Demand

After you start selling tickets, you will have better information about demand. While you probably cannot change the prices outright, there are steps you can take to more closely meet demand. For example, if demand is greater than expected, you could designate more seats as premium (assuming you did not pre-print the tickets). If demand is less than expected, you can offer last minute discounts.

Applying these leading practices is a good step toward defining an event pricing strategy that drives revenue and satisfies your customers.

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