Demand Based Pricing

Earlier this week Drew McManus talked about the problems with Demand Based Pricing. By some coincidence, I had posed a question about that very subject to the Performing Arts Administrators group on LinkedIn just before Christmas. The next day I caught the article by David Sharp that Drew linked to on that very subject so I cited it on the LinkedIn as well.

The discussion received a handful of responses, some from people who feel the practice of demand pricing has been successful for them. One person says a theatre at which his company will be performing starts at one price and then increases when a certain number of tickets have sold. Another says her company sets a premium on orchestra level aisle seats and then also starts raising prices when a threshold for each price section is passed.

The practice that piqued my curiosity, among some others, came from a gentleman who stated they offer the best discounts to the best customers and that the “Net revenue per ticket has increased without raising ticket prices.” Someone beat me to the question about how they tracked and applied the discount. I am partial to this approach because it rewards loyalty and can be used to build a relationship with people. Raising the prices as the seating fills only encourages people to order early but not necessarily often. Unfortunately, we haven’t received an answer yet.

I assume if some people have started experimenting with demand based pricing, a fair number of you have at least flirted and experimented with the concept. I would really be interested in learning about various initiatives others have used, especially in regard to successes and pitfalls one may have encountered.

BTW- If you are interested in speaking with people who have already started experimenting with these pricing structures, join the LinkedIn group. None of those who commented have anonymous aliases. I just avoided mentioning their names in the hope readers will be driven by curiosity to join and contribute to the discussion.

About Joe Patti

I have been writing Butts in the Seats (BitS) on topics of arts and cultural administration since 2004 (yikes!). Given the ever evolving concerns facing the sector, I have yet to exhaust the available subject matter. In addition to BitS, I am a founding contributor to the ArtsHacker (artshacker.com) website where I focus on topics related to boards, law, governance, policy and practice.

I am also an evangelist for the effort to Build Public Will For Arts and Culture being helmed by Arts Midwest and the Metropolitan Group. (http://www.creatingconnection.org/about/)

My most recent role was as Executive Director of the Grand Opera House in Macon, GA.

Among the things I am most proud are having produced an opera in the Hawaiian language and a dance drama about Hawaii's snow goddess Poli'ahu while working as a Theater Manager in Hawaii. Though there are many more highlights than there is space here to list.

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