This intermediate-level workshop on how to build patron loyalty, manage demand, and maximize revenues was presented at the 2013 Western Arts Alliance Conference by Lindsay Homer, Director of Consulting at TRG Arts, whose pioneering pricing strategies have led the arts industry for two decades.
5. What We Do
Patron Results
1. Consulting
Capacity building for sustainable growth
2. Data Services
Aggregation, analysis, direct response counsel
3. Community Data Networks
35 million households
12. Goals of Demand
Management
1. The perception of success
2. Per capita revenues
increases as house fills
3. Inventory management
reinforces appearance
of success
4. Monitoring and adjustment
14. Got Demand?
When you don’t
Your Main Goal: Maximize perception of success
How? Monitoring fill pattern
…and that’s where the scale plan comes in
15. Scale-of-House
Is your scale optimal?
• Does the house naturally
dress itself?
• Does performance success
impact per capita revenues?
• Are areas selling out?
• Where are your most loyal
patrons sitting?
16. • Basic tool for building a plan
– Requires serious analysis and advance planning
• Extremely powerful
– Managing per capita revenues
– Directing audiences
– Blueprint for loyalty programs
Scale-of-House
Control your real estate
28. • Don’t put all seats for all performances on
sale at once
• Least expensive seats in the most visible
locations
Scale is important, add
How you manage it
36. What affects per caps?
1. Prime culprits of negative impacts:
Guessing at peak/off-peak pricing
Too many discounts/comps
Timing of discounts/comps
2. More important than pricing is POLICY
It’s not price, it’s how you use it and when.
38. Discounts and Comps
Where and When?
1. What’s good comp policy?
“Subject to availability”
Vouchers vs. tickets
Limit redemption time
2. Discount timing and strategy is key
Early in sales cycle, not later
Targeted offers with restrictions
Don’t devalue subscriptions
39. Discounts and Comps
Where and When?
3. Make a “stop doing” list
STOP comping and discounting big shows
STOP comping months prior to the show
STOP offering last-minute discounts
Let the scale plan do the work
41. • Which seats do you allow patrons to buy?
– Do you hold off seats from sale?
– Do you open your “balcony” at all?
– Do you control fill patterns or…
– Is your audience in charge of your inventory?
• How are you making decisions about what to
sell and what not to sell?
– Seats are your most valuable asset.
– How are you managing and leveraging them?
Inventory Management
How do you manage inventory?
52. Behavior Drivers
1. Entry level prices
Are they accessible?
2. Top ticket price
Are they competitive in the marketplace?
Are they patron-informed?
3. Price jumps or spread
Are they reasonable?
Do they drive upward movement?
53. Your Price Table
1. How big is it?
2. Do you have multiple price options?
Days of week, event type, renew vs. new, etc.
3. Does it affect the patron’s ability or likelihood
to order?
55. Pricing Table: DO
1. Standardize
Days of week, event type, subscriber
discounts, etc.
2. Simplify
Think about patron’s ability to order easily
3. Let demand drive pricing decisions
Use “dynamic” pricing, not a crystal ball
56. Definitions
Demand Based Pricing
A process combining data
analysis, scale-of-house,
inventory management, pricing
and other marketing tools to
predict and then influence
patron demand. The goal is to
maximize per capita revenue.
Dynamic Pricing
A pricing tactic in which trigger
points guide the manipulation of
prices after an event has gone
on sale. Price is the only
variable.
80%20%
Perceived
Scarcity
57. • Changes to collateral and advertising
• Pre-determine trigger points and price bumps
• Plan for changes in the ticketing system
• Staff training and internal messaging
Dynamic Pricing Basics
58. • Managers control the process
• Dynamic pricing tests and measures
• Watch for market resistance to prices
• Avoid internal price resistance
Can ticket prices go
too high?
60. Dictated Pricing
How to price in real life
1. You’re the marketplace expert
You know your sales history, venue, etc.
2. Can’t do dynamic pricing?
Then: scale
Then: pricing
Then: inventory management
61. • Support blockbusters with additional investment
• Review of scale-of-house plan annually
• Be obsessive about inventory management
• Monitor per capita revenues
• Use dynamic pricing to improve revenues
• Track data and communicate results
• Act “as if” you’re a hot ticket
Final Thoughts on
Demand
Welcome and thanks for joining us. I’m Lindsay Homer, Director of Consulting at TRG Arts.
At TRG, we use data to helpclients achieve results. TRG Arts was founded in 1995 by our late, great founder – and my mentor– Rick Lester. Our firm has grown on pioneering strategies in pricing and loyalty that today have become proven in the results our clients achieve.We are based in Colorado Springs, Colorado with 35 team members, each focused on providing guidance and solutions that are patron-based….that is, ticket buyer, member, donor, event attendee…any PERSON engaged with an organization)…for sustainable loyalty of patrons and sustainable revenue from those patrons.
We’ve worked with about 1,200 organizations in arts and entertainment over nearly two decades, in three countries: in the United States…these are some of our marquee clients….click
….in Canada, where our presence has expanded over the past few years, and in Australia.
As I mentioned earlier…….our firm is the largest provider of community data networks in the US – 20 in all and located across the United States, with New York City coming on as network number 21 in 2014. You heard me say that we are a “data-informed” consulting firm. In fact, data informs every strategic solution we offer at TRG, and enhances the expert knowledge of the staff team on which TRG is built. We have a catbird seat from the data networks we manage to observe some 35 million arts consumers and their transactions. We study and learn who is investing in the arts, how, when, and where. We are constantly seeing trends and patterns that not only help us understand arts consumers but also to inform our work. We are constantly working to harness the power of this data to develop client solutions and to benefit industry knowledge for very practical operational applications.
If you take nothing else away from this session, take this: [CLICK] Pricing is the end, not the beginning.Pricing alone is what happens in a successful revenue plan after you’ve built a foundation. Today we’re going to talk about that foundation…. (pause) AND pricing.
Demand is the voice of your audience.
It’s not a single voice. Varies by performance,
More on when you have it, when you don’t
Do you need every seat to be on sale (if you’ve got 200 tickets sold for a 600 seat house)Different types of performances have different fills. The cheapest seat might not be in the back of the balcony
Tryers are in the back of the bus!
Talk more about inventory at the end, but introduce.All price points on the floor. Use price to drive people into area where we know we can get more.
Mid-level selling
25% or less of the time
Are you looking at this? This should be one of the most important metrics you look at any time you’ve got high demand. In fact, the true test of how well sales are going is not the total sales level or even the number of seats you’re selling. It’s that per capita revenues increase as sales increase.[CLICK] This is how to get it.
If you’re in a high-demand environment, the per cap should INCREASE
Peak and off-peak pricing.sometimes they guess right, sometimes they guess wrongMissed opportunity!
Peak and off-peak
As demand increased, per cap was flat to slightly decreasing. After making adjustments, per cap went up for $48 to $57. For one show, they got close to $90.
Total sales is not the metric. It’s per caps.
Total sales is not the metric. It’s per caps.
Total sales is not the metric. It’s per caps.
A scale plan cannot, by itself, be responsive to changes in sales patterns or unexpected changes in demand. Dynamic pricing was created to bridge this gap between original scale plans and actual demand. You manage it…. Otherwise, they will.
Inventory management is WORK.
Pricing is political
Pricing is emotional.
Welcome and thanks for joining us. I’m Lindsay Homer, Director of Consulting at TRG Arts.