Is your organization’s pricing strategy focused only on the cost of admission? Developed in just one department? This 90-minute workshop, presented at the Arts Reach Canada Conference in May 2013, was designed to show leadership teams how much more there is to consider and to gain. High-impact pricing generates positive perception, improved patron loyalty, and greater revenue for every admission or seat sold. Jill Robinson, President of TRG Arts, the consulting firm that pioneered dynamic pricing and demand management in the arts, will open the session with a short quiz. You’ll evaluate your organization’s pricing approach. Then, hear how best pricing practices can earn double-digit revenue increases when your management and staff play the right roles. Take home new ideas for effective pricing leadership, decision-making, and staff team participation.
Stop surviving and thrive: The patron-centered business model
Pricing: High-Impact Business Strategy or Departmental Tactic?
1. Pricing: High-Impact Business Strategy
or Departmental Tactic?
For
Arts Reach Canadian Arts Conference
May 15-16, 2013
2. 2
Who We Are
• Results-driven, data-oriented consulting firm
• 1,200 arts, cultural, entertainment clients in US,
Canada, Australia
• Capacity-building for sustainable, integrated
patron and revenue growth
• Colorado-based with regional offices across North
America
– In business since 1995
– Fulltime staff of 35
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All Viewed Thru A-B-T
VIP
Access, Pricing
Better access
Incentives for
upgrades, adds
Least attractive access,
most expensive,
incentives to upgrade
17. Organizational Demand Strategy Enables
1. Real growth in demand
2. Perception of success
3. Increased income for in-
demand productions, exhibits,
times of year
3. Increased customer loyalty
4. Improved organizational
performance
18. How?
1. Brave leadership.
2. Patron data stewardship.
3. Understand the impact of demand.
4. Exploit the business role of artistic planning.
5. Then exploit the opportunities therein!
6. Agree that perception matters. And behave
like it.
20. How?
Brave leaders:
• Enable focus on most important priorities.
– Question #1: ―what % of your income comes from patron
sources?‖
– Stop Doing Lists
• Describe and define success clearly.
– What is your patron-centered objective?
– Question #2: ―do you understand the business strategy in your
pricing decisions and how it affects those revenue streams?‖
– Also time to consider:
• Impact of silos on outcomes
• Impact of budget and budgeting process (incentive) on behavior
• Insist on and are involved in strategy and operations that
support success.
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• Understood as an asset
– Used for budgeting
– Organizational decision-making
• Accurate—do you maintain it? Standards?
• Transactional—you’ll need it for pricing analysis
– Subscribers
– Single Ticket Buyers
– Donors
– Event Attendees
– What else?
Step Two: Patron Data Stewardship
Does your organization value and use patron data?
25. What does this mean?
• Demand’s impact on opportunity…
– Revenue gain when demand exists
– For trial and exposure when it doesn’t
• …and on loyalty
– Loyalists granted early access
– Patrons not yet loyal see clearly the benefit
• Timing
• Access
26. Exploiting demand
• Organizational support and focus where demand
exists
– Everyone on same page for real revenue gain
– Purposeful management of loyalists
– Non-loyal: less desirable access, pricing
• Proactive and opportunistic management where it’s
lower
– Trial, generate awareness, creative promotion
– All customers have access to great times, inventory, pricing!
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Price to Maximize Income AND Sell Tickets
Guidelines
• Push top prices based on competitive and political
realities
• Offer very low entry level price points
– How close to the price of a movie?
• Design price table for logical up-sale
• Volume of inventory at particular price point MUCH
MORE important than specific prices
40. Dynamic Pricing
• Now public domain
• Dynamically change prices based on patron demand
– Adjustments based on programming (beyond peak/off-peak)
– Based on sales trend analysis of projected outcomes
• Static models are simpler
– Demand based pricing as added increment
• Changes to collateral and advertising
– Published prices
– ―Program, artists and prices subject to change‖
• Technology changes – ticketing system
– Remember: you already demand base prices ―going down‖
• Training – staff
• Predetermine your trigger points – FLEXIBILITY!
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Step Six: Agree that perception
matters, especially in a seated event
business. And act like it.
Comps?
Discounts?
Exchanges?
Walk up sales?
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Complimentary Ticket Management
Question 5
• Frequently an area that is out of control
– Paper to made houses look better
– No policy or management
– Greater use of more popular shows!?
– Recent theatre client example typical
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Per Capita Revenue Management
Organizational Planning
Single Ticket
Revenue Goal
Marketing
Expense
Cost of
Sale
Allotted
Comps
Allotted
Discounts
Projected
Per Cap
Actual
Per Cap
Actual
Comps
Actual
Discounts
Event 1
Event 2
Event 3
Event 4
Event 5
Event 6
Event 7
Event 8
Event 9
Event 10
Event 11
Event 12
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Roles and Responsibilities
Executive Leader: create organizational priority
Marketing Leader: analyze data, create recommendations for staff
consideration
Development Leader: analyze donor data, understand impact on
loyalty, thought partner with marketing in advance of
recommendations
Box Office Leader: thought partner with marketing in advance of
recommendations, implement recommendations, manage
consumer reaction, take responsibility for demand ―triggers‖
Financial Leader: provide infrastructure for decision-making
Artistic Leader: thought partnership, understand historical data and
potential impact on demand
Our presence in Canada has grown substantially…plug for John’s Canadian conference.
We get to 1200 clients because of our Network Programs…explanation.
And the reason we provide this background is this. TRG is a results-driven company, and without data it’s much harder to accomplish results, and impossible to track/measure them.
And the reason we provide this background is this. TRG is a results-driven company, and without data it’s much harder to accomplish results, and impossible to track/measure them.
And the reason we provide this background is this. TRG is a results-driven company, and without data it’s much harder to accomplish results, and impossible to track/measure them.
And the reason we provide this background is this. TRG is a results-driven company, and without data it’s much harder to accomplish results, and impossible to track/measure them.
Past two years, R&D on most successful clients, we’re bringing to the surface what we’re seeing and hearing in the form of this challenge: it’s all about INTEGRATED, SUSTAINABLE income. And for those of you running seated event businesses, the rules of the road are specific and different and sometimes more complicated for you.
Past two years, R&D on most successful clients, we’re bringing to the surface what we’re seeing and hearing in the form of this challenge: it’s all about INTEGRATED, SUSTAINABLE income. And for those of you running seated event businesses, the rules of the road are specific and different and sometimes more complicated for you.
When we look at integrated loyalty, this is what we do and how we do it, and what comes from it. For us, everything we do ties together into this.
And to make that real tactically, we look to what we call The 10 Steps to Loyalty. OF WHICH PRICING IS A PART.
We’ve been engaged as pricing consultants every year of our nearly 20-year history…the field calls it “pricing,” we call it demand management. And we’ve been pleased to see organizations incorporate—with and without our help—best practices in demand management to great success.
We’ve been engaged as pricing consultants every year of our nearly 20-year history…the field calls it “pricing,” we call it demand management. And we’ve been pleased to see organizations incorporate—with and without our help—best practices in demand management to great success.
I’m using the word “patron” before “data stewardship” because as I sounded this out, I realized that most executive leaders would say, “YES, I use data” They’re thinking spreadsheets. We mean something else.
I said we’ve been engaged as “pricing” consultants for a long time…pricing isn’t the point.
Demand is the point. And you have it everywhere.
So, let’s assume you want to do this. HOW do you operationalize it?
The other is acknowledging that everyone plays different parts.