Talking Tickets 21 May 2021: Discounts! Dynamic Pricing! The French Open! The Met Opera! And, More!
Number 85
Hey There!
Long week.
I’m trying to finish up my classwork for my strategy class and I did a presentation on pricing for the National Sports Forum on Thursday. So I’m looking for a little break.
BTW, here are the slides and the notes from the presentation on pricing!
Remember, if you dig this thing…help me out and share it with friends, colleagues, and folks that would benefit from it.
To the Tickets!
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1. New York State has a beef with dynamic pricing!
Big Ideas:
Dynamic Pricing is a tool. Limiting it, may or may not be a solution. But what is the question?
Pricing consistency across platforms is good for customers.
Limiting exclusive deals in a period of “no normal” that comes next could be a way to ensure that the best solutions to recovery come to the market.
There is quite a bit to unpack in this bill, but at the heart, there are three things to really pay attention to:
Limiting dynamic pricing
Imposing pricing consistency across platforms
Putting a limit on exclusive deals
Let’s take a quick look at each one of these topics and see how they might really impact how tickets are sold.
First, limits on dynamic pricing.
My first question is that these are the best experts they can find on dynamic pricing or pricing?
I’m sitting right here Forbes!
Pricing is always going to be a contentious issue. I did a session yesterday for the National Sports Forum on pricing and when I sent out the below photo, I was shocked at how many folks sent me notes with every justification under the sun for discounting.
Dynamic Pricing is the villain in this case, but I think that if you limit it for Broadway tickets, where does it stop?
Do you now put price controls on everything?
I’m only partly joking here, but I think one of the challenges that Dynamic Pricing receives is that folks don’t set prices well and folks don’t understand Dynamic Pricing well either.
To recap my conversation yesterday: pricing is marketing’s MVP moment! It is where you show your chops as a marketer.
The price is where you capture some of the value that you have been creating for your market.
Dynamic Pricing has ups and downs.
On the upside:
Maximize your revenue
Adapt to supply and demand
On the downside:
You can piss off some of your customers
You can lose out on customer loyalty
My approach to pricing is to use the Pricing Thermometer and price based on value.
In limiting Dynamic Pricing, the NYS legislature would be imposing a limit on businesses that other businesses don’t have. To me, I’d need to understand what the intended outcome of the legislation is before I could suggest some sort of pricing mechanism that would really achieve that.
But I’m not sure limiting Dynamic Pricing is the one.
Second, pricing consistency across platforms.
The famous StubHub experiment where they listed all-in pricing was a bust for the company because everyone else didn’t follow suit. But this part of the proposed bill would make everyone do what StubHub did.
In general, I like having some sort of consistency across platforms because I’m not a fan of bait and switch maneuvers that are harmful to consumers.
It would hurt businesses that try to game the price by discounting the sale price of a ticket to only add on extra fees, but I think giving people a bit more price certainty is a good thing.
Finally, cutting off exclusive contracts is the most interesting aspect of this whole piece.
Why?
As I’ve mentioned on a number of occasions, I love the way that they operate in England with allocations and people have to compete to market and sell their allocations!
We don’t have that here.
And, I think due to a lack of competition, we see heavy discounting, poor customer development, and a lack of innovation.
To me, it is interesting to open up the competition.
We are seeing the first stirrings of a new age of antitrust enforcement at the federal level with Congressman Pascarale sending out a memo about investigating Live Nation.
But the real reason that I think this piece of the legislation is interesting is because of the reality of the “No Normal” that we are going to deal with heading out of the pandemic.
As I’ll cover in a couple of the stories below, we don’t know what the future is going to look like. We don’t know if buying habits have changed. We don’t know what is really going to happen over the next few years.
And, in this kind of environment, the more eyes we have on a problem and invested in a solution, the better.
That’s good for everyone.
2. Joe Favorito writes about the future of sports and attendance:
Big Ideas:
Habits change in 21 days or so. After 14+ months, how can we expect folks to just snap back to the way they were?
We have to be prepared for people to change their habits.
Use a simple technique like “10 ideas” to break old habits and come up with new ideas.
I’d never heard of “The Newspaper Strike” theory before, but in my coursework at Cambridge, Professor Shaz Ansari talked to us about the idea that it takes about 21 days to change a habit and after 60 days a lot of those habits are locked in for the long term.
Joe writes about the year that was and what comes next and he highlights a few interesting ideas to think about as we all work our way out of the pandemic and, finally, hopefully, get back to some version of normalcy:
How much have our habits changed?
Will we go back to games the way we did before?
The need to move beyond “we’ve always done it this way” thinking.
Quickly, let’s move through each of these.
First, our habits have changed.
There isn’t a definitive survey on all the ways our habits have changed, but over a third of people have pointed out how they have noticed their eating habits change. We’ve seen consumer purchase habits change in the way that people were shopping less often for more stuff.
We also saw people watch less sports.
The reality is that we don’t know what people are really going to do once the pandemic is fully behind us. Especially because we don’t know what the recovery will really look like and we don’t know a lot.
There is a lot of grey in the world right now.
And, we will begin to get a better sense of things in the next few weeks when more and more things reopen.
Second, are we going to rush back to games the way we did before?
The early indication is that so far the answer would be no.
Of course, I’d be the first to tell you that the data we have is inconclusive as well since we don’t have nearly enough to give us a great deal of certainty that a trend or pattern will stick.
But the “demand like no one has ever seen” theory hasn’t materialized yet.
Some events have sold well, absolutely.
But not every event.
So we will have to deal with that.
Finally, before the pandemic, there were troubling trends and as was mentioned in Tisha Thompson’s article on the future of tickets, before the pandemic the world of ticketing was becoming an ugly place.
The truth is that we couldn’t really afford to rest on “the way we’ve always done it” thinking.
Now that the pandemic is beginning to recede, that’s even less acceptable.
I wrote a piece for the ALSD this month on emergent strategy and the idea that you need to plan, but the plan is a starting point and not an ending point.
The unfortunate thing is that for too long things were stuck: sales processes, marketing, promotions, operations, everything.
What I hear over and over is that during this time of struggle from the pandemic, too many people went down the path of business as usual ASAP.
That’s already proving to be unwise.
So how do we deal with that?
First, you have to keep an eye on the world around you.
Market Orientation was something I mentioned repeatedly throughout the pandemic. Get the voice of the customer into the organization.
If you weren’t doing it before, now it is essential.
Second, revisit your strategy.
You need to do the research. Draw up your map of the market. Pick a target. Position. And, create a strategy.
Finally, break out of old habits.
James Altucher talks about this practice he does of writing down 10 things/ideas every day around a question or idea he is thinking about.
I pick up the practice when I need to.
As you get stuck back into the day-to-day of driving attendance, growing customer bases, and generating revenue, instead of defaulting to the normal idea like discounting, phone crushing, or whatever…pick up a pen and paper and jot down 10 different ways to get out of the rut.
You may not use any of them, but I hope you realize that there are a number of paths to get you to the destination you have picked.
3. The Nets are offering playoff tickets for 50% off:
Big Ideas:
Don’t discount!
Pricing demands research, especially now.
Competition is going to be fierce and just hoping for “hot” isn’t a good strategy.
It is as if the universe was asking me to talk about pricing some more this week.
First, I shared my presentation materials from my NSF session on Thursday. This is a brand new session I put together just for the occasion. Now that it is done, I think I can see some ways to build it out and add some more value to it. So I’m going to open up three slots for free webinars of the presentation.
Want one? Email me. First come, first served.
Second, as I say in the presentation, I use pricing as a proxy for the effectiveness of your marketing efforts.
When I see organizations that are heavily discounting, I look to a few areas to see what is going on with the organization. Usually discounting happens due to a few issues:
Lack of proper marketing research. Pricing demands proper marketing research.
Putting tactics before strategy. If you follow the marketing framework they way I’ve been sharing in this newsletter, you know that you do research, STP, and develop a strategy. Then you do tactics.
The organization isn’t doing a great job of elevating the perception of value of their product or service.
Third, the Nets aren’t alone in their struggles to attract fans back to games.
Some of this is an acceleration of the trends we were seeing before the pandemic. In Australia, the AFL is seeing that fans are put off by concerns about health, price, and convenience in returning to watch footie in-person.
I spoke with a reporter from the Detroit Free Press this week and we went through a bunch of the areas where organizations are struggling to get fans to come back to their events like baseball.
We are also entering a period where lots of shows are going onsale. In DC, I think I saw about two dozen concerts go onsale at the Anthem, 9:30 Club, and Merriweather Post Pavillion this week.
That’s one week from one group of promoters.
That is only the beginning. Even in huge markets like DC, NYC, LA, London, or Melbourne, there is a finite number of people to go to events due to price, taste, or other responsibilities.
Demand is going to be a challenge for a lot of people. I’m pretty sure that musicians like Pearl Jam, Taylor Swift, Bad Bunny, and Beyonce will be fine!
But everyone else?!
Okay, here’s how we can tackle this challenge.
Again, broken record time.
Do your research! Need help, call me or email me.
Start with your good buddy, Google, and look to see what has already been done. That’s free market research right there.
We can build off of that.
Second, look at how your market has shifted or changed during the pandemic.
Again, a couple of examples.
Baseball teams I know are seeing that their demand has shifted due to the fact that there aren’t workers in the city center to go to games during the weeknights. But more folks are going to things during the weekend. This shifts the whole way they sell and market.
If you don’t do research and use that to create a proper segmentation…you are going to be looking at an outdated map of the market you are in.
As an example, think about all the stories of people leaving the Bay Area for Miami or Austin. Do you think that will change your market or not? Do you think it will be accurate? Do you know?
Finally, set a price that you can justify based on your research!
Stop making things up!
In my notes from my presentation, there are 4 pricing research techniques you can use to figure out better prices now.
Start with the Van Westendorp Survey. It is four questions. It isn’t perfect, but it will give you a good starting point for understanding what the real perceived value of your experiences is.
Again, don’t know how to do this yourself? Call me! Email me!
You can’t afford to get this right!
More numbers, I share the power of pricing and the ugly downside of discounting in my NSF presentation.
On the upside, get 1% more in your price and your profits grow 10%+.
On the downside, for every 1% you discount, you lose 40%. This came from research from Professor Mark Ritson. We were discussing it in the Talking Tickets Slack Channel yesterday so I went and did some research into my past projects and the general number I came up with was on average they’d lose 20-25% of profits from discounting. And, I found an HBR article that says that the damage they observed in discounts was the inverse of the growing the price, 1% to 10%.
So don’t discount!
Reset the price based on new data! Use it as a promotional opportunity, but a price-based promotion!
To sum this up:
Pricing well demands research.
Put your strategy together before you do your tactics.
Definitely need research to make wise decisions now.
Don’t Discount!
Big Ideas:
Reopening isn’t recovery.
Lifetime Customer Value is a good marketing stat to track.
Every product and service you provide should have its own sales funnel, customized from your research and data.
Jill hits all of my favorite topics in this one:
New York City
Data
Customer Focus
Poor sales practices
I could easily just say, “Read Jill’s post!” and get on with my day. But I like what Jill did building off the experiences of others.
So I’ll try and do that here as well.
Three things that Jill points towards that matter to me are:
Sales Funnels
Lifetime Customer Value
Reopening isn’t Recovery
So in the context of this ongoing conversation, let’s look at these three ideas really quickly.
First, reopening doesn’t mean recovery.
We are already seeing the fraying of just throwing open the doors for sports teams and with the number of shows put on sale this week in DC, I can only imagine that concerts aren’t far behind.
Now more than ever, you have to get your strategy right.
As Jill said, there is a danger of going after “fast money”, but the downside of that is that you’ll burn through the easiest fans to reach early and you’ll have nothing in place to build off of that success with.
So do your strategy work. Begin by researching and seeing what the world you are emerging back into really looks like.
Second, Lifetime Customer Value.
I’ve been preaching this to folks for years, but I know it has hit the mainstream now that Gary V is trying to claim it as one of his new big ideas.
The idea behind LCV is simple. You want to maximize how your revenue over the lifetime of your relationship. It isn’t just a quick hit.
The key concept you need to consider now is how are you going to keep people coming back over and over again? What does your customer path look like from first-time ticket buyer to long-term patron or donor?
Have you mapped it out?
You better get on the case.
Finally, the sales funnel.
This helps with understanding and maximizing your LCV.
Why?
A few reasons:
Each product or service you provide should have one and you should understand the dynamics between different funnels. Like how do you manage the relationship from single buyer to repeat buyer? From repeat buyer to mini-package?
Sales Funnels require research. Research requires Customer Focus. Customer Focus requires getting the voice of the customer into the organization.
Every Sales Funnel is customized. Because you should create a custom funnel based on your research for every product/service you provide, you will know the steps and touchpoints that are valuable to use to engage with your audience along the way because your guests will tell you what matters.
In my research over the last few years, here are some numbers that will back me up:
98% of businesses aren’t talking to their customers nearly enough. I know this because in almost every conversation I have with an executive, I bring up data or conversations I had with their customers. And, almost every time, folks go…we really don’t talk to our customers enough.
73% of businesses openly state that they are looking to grow. I don’t know what the other 27% are up to, but score one for honesty in answering surveys…I guess. What’s more damning is the accompanying stat that 53% of these folks will honestly say they aren’t sure where to begin. (I might assume the number is higher, because no one in a revenue or marketing role is really going to tell you they have no clue. But you can always tell by asking them to share their goals or strategy with you.)
The point here is that what every organization is dealing with right now is a marketing problem.
Full stop!
And, the challenge for most organizations is that their marketing teams are overwhelmed due to lack of training in the skill of marketing, too much emphasis on tactics, or limited resources because “posting to social is free, right?”
I’m becoming a broken record, but everyone needs to take a step back and get the diagnosis of their situation correct first. Don’t just fling open your doors and look for “Fast Money”.
That isn’t going to work. Because like Jill’s data showed…it wasn’t working that well to start with.
5. French Open will have more fans than expected and La Liga brings back fans as well:
Big Ideas:
We aren’t in a “New Normal”, we are in a period where no normal really exists.
Talk to your customers!
Communication will be key to successful recovery and now is a great opportunity to get into a habit of good communications.
Everywhere we go soon, people will be there.
That’s great and all, until you have traffic like DC’s. I’ll tell y’all about the lady trying to run the stop sign and getting angry at me because I was in the middle of the intersection, driving through, which stopped her from running the stop sign…she went full road rage, screaming yelling, waving her arms, and flashing the bird.
Cormac said, deadpan, “I think something might be wrong with that woman.”
Back to tickets, the Premier League has had fans for the final two matchdays of the year. La Liga is welcoming back fans. And, in Copenhagen, the Danish government is moving to accelerate their return from lockdown.
The French Open is benefiting from delaying the tournament a week…
All is starting to look somewhat normal again.
But as I wrote for the ALSD this week, we aren’t entering a “New Normal” but a period where there is simply “No Normal”.
I’ve seen enough data now to recognize a few things that everyone needs to pay attention to as they reopen.
First, be prepared for ups and downs.
The term I use is flexibility.
It is at the heart of “Emergent Strategy”.
You need to create a plan for what you want to have happen over the next few months or year, but you have to also grapple with the idea that you are going to likely have to rip up your plan and adjust multiple times.
An example y’all can look to is the way that restaurants adapted their services to serve to-go drinks, to-go meals, or like my corner bakery…turn them into a corner market with baked goods, drinks, produce, and more.
Second, Market Orientation.
Get the customer’s voice into the organization.
You need to listen to your customer in every environment, but it is essential now.
Talk to people. Watch how they engage or don’t engage with games and events. Understand your fans and customers because your business depends on it.
Finally, communicate consistently.
Things are going to be up and down for a while, I would imagine.
Look at the French Open’s example again. Delaying the event one week changed the entire way they are able to present their tournament.
Once this happened, they were able to communicate effectively to their market because they had been managing their messages throughout.
To put it another way, you are always trying to figure out good ways to engage and talk with your market, the ups and downs of reopening and recovery give you a great chance to reconnect with your market and communicate with them consistently using value.
The key: add value at every touchpoint!
To wrap up the week, reopening is happening! Though it isn’t likely to be a straight line. So work with your customers, get to know them better, and keep an open line of communications.
Not too hard, is it?
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Catch up with me in DC this week!
Soon…I’m back on the road:
I’ll be in Vegas for Ticket Summit and I’m working out the details on my panels now. So get your TS tickets now.
June 24-25: Boston
June 28-July 13: Miami/Ft Lauderdale
I did a Linktree link so you can get all the important/fun things I’m doing all in one place. Right to the latest podcasts, blogs, or newsletters! Boom!
Check out my buddies at Booking Protect! A new addition to the team is Hayley. So call her up, give her trouble, and tell her I sent you. More importantly, the sales data shows that the uptake on refund protection has almost doubled since the pandemic. This is a clear indication that folks want the peace of mind that refund protection provides. So reach out to Cat, Cath, Hayley, and the Booking Protect team.
Next week I’m going to chat with Martin from Activity Stream about the new Activate tool from Activity Stream. Check it out now and find out how you can use your data to create better marketing opportunities for your email marketing campaigns.
Another new podcast coming next week with Kate Howard, Chief Commercial Officer with Eventellect. If you haven’t met or talked with Kate, she is awesome and we are going to talk about data, research, and marketing. One of the things we will discuss is Net Promoter Score. If you want to learn more about NPS, send me an email and I’ll share the worksheet that I put together in partnership with Eventellect that teaches you about NPS and puts their score of 77 in the context of other businesses around the world!