Billy Fluck (he/him), Program Manager, Spektrix
Dynamic, or ‘demand-based’ pricing, is nothing new to the arts sector. Prices have always been set based on predicted demand, with popular weekend shows priced higher than midweek matinees.
Contrary to popular assumptions, dynamic pricing is not a race to exorbitant ticket prices. For low-demand shows, prices are as likely to decrease as they are to increase for high-demand shows. In fact, there are many benefits of dynamic pricing for your organisation and audience alike.
Yet many theatres and arts centres, fuelled by negative publicity around big arena tours, fear that audiences will reject dynamic pricing.
So, let’s look at some common fears around dynamic pricing, and how to address them.
Won’t dynamic pricing remind people of airline-style experiences?
We’ve all been frustrated when buying an airline ticket. The process can be obtuse, with multiple add-ons throughout the booking journey, leaving you feeling like you’ve been cheated.
If this is your only touchpoint with demand-based pricing, it’s understandable to be wary of it. But the motivations of airlines – and arguably of the biggest music promoters – are far removed from those of most theatres. It’s perfectly possible to maximise profit margins whilst instilling trust, generating loyalty, and increasing engagement within your community.
Firstly, separate dynamic pricing from hidden charges- they’re not, and shouldn’t be, the same thing. Then, help your team understand how dynamic pricing can benefit both your organisation and audience, and how additional revenue can subsidise community work or accessible tickets.
Be upfront with your audience. Clearly list your price ranges, state what your policies are, and prepare your team to give confident explanations for why you’ve set them that way.
Will I price out some of the audiences I’m trying to reach?
You always keep control over the pricing of your shows – you can set parameters such as upper and lower price limits, or exclude certain price zones to keep low-cost tickets always available. The inventory is yours to manage, whether you’re adjusting prices manually, or automating the process with integrated add-ons to your ticketing software.
Raising prices isn’t the endgame for dynamic pricing. Instead, think of a flexible pricing strategy as a set of levers you can pull, intentionally making space for every segment of your audience. Explore your audience’s price sensitivity in a controlled environment, and, especially through an automated approach, you’ll benefit from an algorithm that’s constantly learning – initiating small scale experiments, testing market reaction, and responding to audience behaviour. Whatever approach you take, you’re free to intervene at any moment and bring prices back inside your comfort zone.
Be intentional about how you can use dynamic pricing to incentivise and welcome the audiences you’re trying to reach. Set maximum price points to keep prices within your desired range.
Will dynamic pricing penalise loyal audience members?
No! On the contrary, prices for popular events should increase over time – ensuring that loyal audience members are rewarded for booking early.
Meanwhile, loyalty incentives like priority booking or flexible season tickets can go hand-in-hand with dynamic pricing. This way, regular bookers can lock in a price, and you’ll never undermine their benefits with last-minute price drops.
Craft your dynamic pricing strategy to ensure that early bookers and loyal audience members always get the most visibly discounted price. Avoid drastic last-minute discounts that undermine other loyalty programmes.
With Spektrix, it’s simple to test out dynamic pricing with a manual, data-driven approach, or integrate with a range of pricing partners to automate responsive pricing across your season. Learn whether it’s the right approach for you, with new dynamic pricing insights from Spektrix, Baker Richards, TRG Arts and more.
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