Better To Adjust Price Vs. Discount

Dave Wakeman’s appearance on Angela Meleca’s ARTS Redefined podcast was making the rounds of LinkedIn last week. One section in particular where Wakeman discussed his opposition to discounting caught my attention. (Starting at 27:10, the index in the video is way off for some reason)

Wakeman says people tell stories about themselves –what type of person they are, what value they have in the world. He says discounts do the exact opposite – it removes the value narrative and says you are a commodity and suggests you don’t believe in the value you are offering.

Wakeman recalls one of his marketing professors taught him that for every 1% you discount, you can lose up to 40% of your profit. Wakeman acknowledges it is an extreme example and the typical loss is around 10-11%. He cites additional research on the other side that shows for every 1% you raise your price, you gain 10-11% in profitability.

He says that the first time you discount, you might get good results but then people learn to wait for the discount. The better approach is to just recognize you set the price too high, change the price and continue with that new price.

Without naming names, Meleca gives Wakeman the example of an arts organization that makes all their tickets $11 with the expectation that people will enjoy the experience and come back again at a higher price.

This is clearly a reference to Opera Philadelphia’s  $11 pay what you want campaign that was introduced at the end of August. I suspect the podcast episode must have been recorded around then because Wakeman doesn’t seem aware of this and I am reasonably confident I saw him comment on the story in early September.

I will say that based on Opera Philadelphia reported ticket revenue being generally 13% of their revenue, I don’t necessarily think they were depending on people returning at a much higher price point in the future. Fundraising is probably at the core of their plan to stay in the black.

Interestingly, Wakeman brings up a “not going to name name’s” example of a sports team that did the same thing. He characterizes the belief that people will come back at a higher price as just stupid. He says it is much tougher to raise a price when you have lowered it.

He goes into detail about the approach of just changing the price and how to communicate it in a way that is positive for you. Announcing a whole new block of seats at $20 Vs  20% off ticket price is a more constructive framing. The discount raises questions about the value of the show and how it is selling.

That said, I want to point out you can only do that so much. There were a lot of concerts this past summer where people had purchased tickets at $300 or more several months out only to find them selling at around $50 dollars a couple weeks out from the show. Based on what I saw unfold on regional concert venues this summer, I am pretty sure some of that is attributable to 3rd parties buying up all the tickets, ratcheting the price,  and then trying to unload them when they wouldn’t sell.

Whether it was 3rd parties or the venue themselves, there were a lot of pissed off people making videos and comments on social media because their perception shifted from being smart for getting tickets early to being cheated of the hundreds or thousands of dollars difference between their purchase price and the current sale price.

Wakeman talks about this shift in perceived value in regard to discounting as well. He suggests having a strong data based process in place for price setting so that you have the best chance of creating an accurate price in the first place.

He says pegging it to the actual cost of presenting the show is bad because that often doesn’t align with perceived value.

Once you set the price, don’t be timid or apologize for it – promote it confidently and proudly.

 

90 Years Of Cultivating Community Around Flowers

Last month, the Bloemencorso Zundert, caught my attention. It is the largest flower parade in the world held in Zundert, Netherlands. Twenty hamlets compete to have their parade float judged as the best. Apparently, they only use dahlias are used in the Zundert parade and six of the nearly eight million flowers are cultivated in Zundert. The parade started in 1936 with 17 hamlets. The other three have joined more recently.

The entire effort appears to be volunteer run from the cultivation of the flowers, to the design, to the assembly of the flowers just days before the parade. Not to mention the movement – the floats tend to be human powered. If you look closely at some of the videos below, you can see the feet of the people acting as the internal engines. The webpage for the event translates relatively well into English.

Being a Tolkien fan, a video of the Khazad-Dum float is what had initially caught my attention and led me to do some further investigation of the event.

However, that wasn’t the winner. It appears it didn’t rank well with the official judges, but took 2nd place in a vote for audience favorite.

This is the one that won:

Here are a few more that caught my eye.

Kickstarter CEO Say More Needs To Be Done To Support Participation In Arts

The National Endowment for the Arts asked a number of different people to respond to the 2022 Surveys of Public Participation in the Arts (SPPA).

One of those asked to respond was Everette Taylor, CEO of Kickstarter, a site that has essentially become the alternative to foundations, governments, and institutional funders as a funding source for creative projects.

He says a partnership with Skoll Foundation, Mellon Foundation, and Creative Capital to provide $700,000 in funding to 600 BIPOC creators helping them raise $11.7 million.

“In recent research, still unpublished, Kickstarter creators report earning $5.15 in additional revenue from each dollar raised on Kickstarter. That places the total estimated economic impact of the $700,000 fund at close to $70,000,000, a 100x return on that cultural investment.”

That data comes from one of his recommendations about making funding to creatives more accessible, especially for smaller scale projects. Part of that includes making it easier for people to apply with fewer strings and follow up reporting burden attached.

His second recommendation is about strengthening community among art makers by providing some infrastructure for creating networks and sharing work, and encouraging cross-pollination and collaboration.

His third recommendation referenced changing the definition of art making, including who gets to participate in making art. He lists all the projects that have been funded by Kickstarter highlighting the expansive storytelling techniques facilitated by books, tabletop games, roleplaying games receiving support. He points to these games as something of an underdeveloped framework for allowing more people to participate in a creative process.

He warns that AI is in a position to marginalize and supplant many of the burgeoning creatives who have only just begun to realize success through opportunities for funding that platforms like Kickstarter provides. There is something of an implication that as much as Kickstarter has done to help these artists, their capacity is still comparatively too narrow to provide the support and resources the creative community needs to succeed.

Music, Lyrics, Comprehension and Memorization

Pretty interesting article on The Conversation about how different types of music can help or hinder cognitive activity. The target audience for the article it primarily students in relation to their study habits, but it does provide general insight about how tempo and lyrics can impact comprehension and memorization.

For example, I have found that I have a more difficult time creating anything with verbal or written content if music has lyrics. However, if I am working with numbers, say balancing accounts, lyrics don’t inhibit me at all. (Though my singing along might disturb my co-workers.) Though age may also be a factor because I don’t remember having as much difficulty with writing to music with lyrics when I was younger. And the article sort of alludes to the fact that different people have different capacity to multi-task.

Here is some of what the article has to say. A fair bit of space is also devoted to the damage volume can have on hearing.

Numerous studies have discovered how music can affect study and work habits:

  1. Listening to instrumental or familiar music in the background competes less with a study assignment than music with lyrics or unfamiliar music. Instrumental music also seems to interfere less with reading comprehension and assignments requiring verbal and visual memory than does music with lyrics.
  2. One study showed soft, fast music had a positive impact on learning, but loud and fast, loud and slow, and soft and slow hindered learning.
  3. Upbeat music with a higher tempo may help when you’re doing something requiring movement or motivation, such as exercising or cleaning your room.
  4. The more difficult your task is – for instance, memorizing material, problem-solving or learning something new – the more likely the music is distracting and people often need to turn it off.