I caught a story on NPR’s Marketplace yesterday that discussed the way airlines use premium seating. One of the people interviewed mentioned that airlines craftily use the separation of time to get people to upgrade. Because the flyer is offered the opportunity to change to premium economy around the time they check in, months or weeks after they purchased the ticket, consumers view the upgrade payment as a different transaction from the initial seat purchase rather than thinking about the total amount they have spent.
Of course, that got me thinking about how this could be applied in the arts realm. While there are performing arts venues that employ dynamic pricing to extract additional revenue from ticket sales, by and large most organizations don’t have the interest or the computing infrastructure to implement that sort of ticketing.
However, many venues have ticketing systems that are capable of providing the view of the stage from a particular seat or notes about which seats have more leg room. There may be other characteristics about the performance space people value that can be integrated into seating choice as well.
An email can be sent out a week before the event with information about how to prepare for the visit, including parking, restaurants, etc., and offering an opportunity for an upgrade in terms of sight lines, leg room, or whatever.
The offer of the upgrade doesn’t have to wholly be driven by a profit motive. It can be offered as a loyalty incentive to help fill houses now and in the future. Because you have been a loyal attendee or purchased well in advance, you can upgrade from the $35 seat to a $60 seat for an additional $10 rather than $25.
If you know that part of your audience base are price sensitive, last minute purchasers, you have just freed up a cheaper seat that can be sold and incentivized loyal patrons who plan in advance to continue to do so.
While I was thinking about all this, I recalled an instance where a person on my staff suggested that a renter do something of an inversion of the usual seat pricing approach and price seats up close less than those further back. I was a little conflicted about this because while we as insiders felt that seats in rows G-L are among the best seats, pricing should be based more on what seats the buyer thinks are the best.
But I also wondered if people have been trained by the way things are priced to think the highest priced, closest seats are the best? Given their choice in a general admission setting at a live, non-festival experience, people rarely head immediately to the front and fill in as close as they can possibly get. More often than not, the front 2-3 rows are virtually empty by the time the show starts unless the event is close to sold out.
Is there a psychological element inherent to reserve seating events that changes the calculus for people? If the front few rows are priced less than those behind, do people think the venue management are fools and they are getting away with something by paying less? And is that necessarily a bad thing if it has people watching closely for when tickets will go on sale so they can grab those great seats at a cut rate? Will they relent and buy slightly higher tickets if the cheaper ones sell out before they get there?
Of course they need to be confident those seats did sell and weren’t held back to manipulate sales or weren’t grabbed by resellers. This approach wouldn’t work well in places that are subject to scalpers with an automated purchase process.