šµPricing Power: You Need It! Talking Tickets 14 October 2022!
157
Hey!
The first issue of year 4 is all about pricing!
Yāall askā¦yāall receive.
Iāve included my favorite starting place for pricing research and everything.
Doing my annual NPS survey: 4 questions, 60 seconds = more value for you.
To the Tickets!
I. The Big Story: Do You Have the Stomach to Set the Right Price?!
Musicians wouldnāt pay as much for their art as they expect customers to pay!? WTF!?
The Big Idea: Pricing research always turns up eye-opening information:
Artists say theyād pay less for their ābucket listā concert than the average customer pays to see their typical performance.
Due to the budget of many organizations, lowering ticket prices makes more sense to enable revenue from other sources.
The name of the game: experimentation.
Focus on Value: Most people get pricing wrong.
Why?
They donāt have any research. They donāt have a plan for their price setting. They fall prey to bad pricing ideas.
The key concept to keep in mind: value.
People are buying a ticket to achieve some end.
How Should You Think About Value?
Begin with the customer: look at an event through the customerās eyes.
Express value through your marketing: your marketing is about establishing the value of attending the live event.
Your opinion is dangerous. People donāt see the events like you do.
Be careful of falling prey to the zombie ideas like discounting to get people in the door, comping tickets, and setting artificially low prices to help people āget in the door to see the value.ā
Go Deeper: Pricing Has 3 Levels.
II. Tools: The Van Westendorp Pricing Model:
This is a simple place to start research.
The Big Idea: Youāre welcome! It doesnāt get any easier than this to start doing pricing research.
You can go way deeper, but this is a great place to start.
4 Questions. Seriously!
III. Concept: āCompetitionā
Definition: Competition refers to a situation in a market in which firms or sellers independently strive for the patronage of buyers in order to achieve a particular business objective, e.g., profits, sales and/or market share.
I highlight this concept this week because there will be a panel in DC on 20 October talking about ācompetition issuesā in tickets.
Iāll be there.
The important thing to remember is that an anti-competitive market is when there is no need to āstriveā for your business objective because youāve eliminated competition.
This is the heart of antitrust law: the need to enforce competition because it is good for the economy, consumers, and workers.
When you see that there are only a few players in a market, you can often see monopoly power start to take hold leading to less service quality, higher prices, and limited innovation.
IV. Bullets: Keys to Setting Better Prices:
Remember price = value
Do your price research
Communicate value
Know if you have a prestige effect like a Porsche or Ferrari
Create scarcity
Experiment
Consider ultra-low pricing
Donāt discount: Discounts are for dummies
Remember it is easier to reset your prices lower than it is to reset them higher
Use the power of relative differentiation to create pricing power
V. Links:
Chicago Sinfonietta makes classical music available to everyone:
Would this model work more places?
Research shows that in a lot of places, this kind of āpay what you canā model works very well.
Radiohead did it about 15 years ago with their album, In Rainbows. They made more money than they normally would from an album release and more people experienced their music.
You could start by offering a pay what you want section?
āName Your Priceā: not calling it a trend, but it is popping up:
These are smaller venues and performances, now.
The experimentation is important because if it works in a smaller scale setting, there are likely ways that it can work with larger organizations.
Pricing Power is why you invest in brand building:
My take has always been: show me how you set prices and I will tell you if you are a bad marketer or not.
One of the keys of my business is teaching people how to gain and keep pricing power.
You invest in brand because it helps you raise and maintain higher prices.
You invest in marketing because it makes it easier for your sales teams to close business and not negotiate based on price. (Though they are always going to fall for the āthe price is too highā trick.)
You invest in long and short because you need to do sales activation now, but your brand ensures that the sales activation works later as well.
Call to Action:
Take 60 seconds to fill out the NPS survey.
Send me your suggestions for podcast guests, technologies to look into, and questions to be answered.
Share the newsletter with someone that you think will benefit or find value from the newsletter.
Linktree: Find everything Iām up to.
Join the āTalking Ticketsā Slack Group. Almost 300 people from around the world.
Customers are buying refund protection at rates 2x higher than before the pandemic.
Offering your customers refund protection:
Gives customers certainty in their purchase.
Gives you a new revenue stream.
Improves your customer service.
Great podcast conversations: Take your business to new heights by learning from the best in the business.
Recent Conversations:
Aren Murray
Bill Guertin
Scott Goodacre