Dynamic Pricing has been a hot ticket (please excuse my terrible theatre pun) for arts marketers for the past few years. However, nearly every example in major articles is a large organization that generally sells $50 tickets and has hundreds of seats in its theatre. So how do these new pricing strategies translate to companies that charge $20 per ticket in a 50-seat house?
As a small and relatively new company, we at Vagabond Theatre Group are in the early stages of developing relationships with our audience and donors. For a small company like us, dynamic pricing (the practice of raising ticket prices over time as a house fills up) may make a quick hundred dollars, but it also has the potential to alienate the people with whom we are trying to build relationships. At the same time, dynamic pricing may prevent new audience members from feeling good about their ticket purchase. I would rather not to see any of our budding friendships damaged when someone feels punished for buying their ticket late in the run of the play. While dynamic pricing may work for large, for-profit companies like airlines, it does not seem viable for a small non-profit like Vagabond that would also like to turn its patrons into supporters and donors.
Another ticketing strategy that came up in You’ve Cott Mail a few days ago is the idea of Placebo Pricing: you set ticket prices as twice what they normally would cost and then give everyone a 50% discount. Patrons think they’re getting a great deal on something that would normally be significantly expensive. For a young company like VTG that aims to encourage new audiences to get involved in theatre, there is a fear that if someone new to theatre sees a $40 ticket for a show it will immediately turn them away (because, let’s face it, there are people who have never seen a play because they fear that theatre is too pretentious for them. A $40 ticket is likely to confirm that belief).
Placebo pricing has another pitfall, which is that it implies that the tickets are not in demand. I read this a while ago on Chad Bauman’s Arts Marketing Blog and it has stuck with me: “Nothing sends a message that you have an unpopular product more than a mass public discount.”
Vagabond Theatre Group practices what I will call Audience-Friendly Pricing: sticking to the original ticket prices we set forth from day one. No one feels cheated, new audience members aren’t confused and everyone gets affordable tickets for high-quality work. For small theatres (not to riff on Ockham’s Razor or anything) the simplest solution might be best.
We would love to read your thoughts in the comment box below. Let’s get this conversation started!