Dynamic Pricing Lets Broadway Escape...The Insanity Zone
3/23/17
The word “insanity” could explain some longstanding ticket pricing practices on Broadway. We keep doing the same thing over and over again and expecting different results.
For example, we 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 many go 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?
The industry operates on the presumption that price-sensitive customers are able to find discounts. But people walk away from box offices or don’t convert online when the prices don’t align with their budget or their perceived value. Sure, we make discounts available, but not all customers know where to look, and those are the ones 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 the listed full price for a rear mezzanine ticket when they could wait until TKTS opens and get an orchestra seat for the same price? We’re letting customers walk away because they don’t know 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, it could be beneficial to create 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. 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.
And more and more Broadway shows are taking this to heart, but we’re not there yet. So when you’re thinking about your pricing strategy, consider using dynamic pricing to help move tickets. It might just help your show avoid the pricing insanity of years past!
Learn more about the Shubert Organization: http://www.shubert.nyc/
For example, we 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 many go 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?
The industry operates on the presumption that price-sensitive customers are able to find discounts. But people walk away from box offices or don’t convert online when the prices don’t align with their budget or their perceived value. Sure, we make discounts available, but not all customers know where to look, and those are the ones 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 the listed full price for a rear mezzanine ticket when they could wait until TKTS opens and get an orchestra seat for the same price? We’re letting customers walk away because they don’t know 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, it could be beneficial to create 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. 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.
And more and more Broadway shows are taking this to heart, but we’re not there yet. So when you’re thinking about your pricing strategy, consider using dynamic pricing to help move tickets. It might just help your show avoid the pricing insanity of years past!
Learn more about the Shubert Organization: http://www.shubert.nyc/
Source: STAR System / Shubert Datapulse
Originally published in Broadway Briefing.