Talking Tickets 29 April 2022: Pricing! Pricing! Pricing! Seriously, lots of pricing! Arizona Coyotes! Arts Marketing! And, more!
#133
Hey!
I’m back! Getting stronger by the day!
I’ll be looking at taking the Dave show soon. This means Beavertown beers in N17. Drinks at Bondi Beach. A Broadway show and some Other Half beers in Rockefeller Center. A game at Fenway Park. And, more!
Share this newsletter…pick out 2 or 3 colleagues that would benefit from this stuff and share! Share! Share!
Great podcast conversations coming up starting next week built around the idea of “The Road to Recovery”.
Get into the Slack Channel! People have made connections that have led to jobs, learning things they’ve applied to their jobs, and more!
To the Tickets!
1. The Big Story: The Arizona Coyotes release their prices for their stay at ASU’s arena:
Big Ideas:
Pricing is easy to do poorly.
Proper pricing demands research.
Most pricing is just pulled out of thin air.
You ask for pricing…you get pricing.
Back-to-Back to start this week’s newsletter.
We have two different angles here.
I’ll start with the Arizona Coyotes and their pricing for their first season at ASU’s 5,000 seat hockey arena.
What do I think?
I’d like to see the research that justified these prices please.
And, before you spend too much time emailing me, I know from looking at the pricing chart that one of two scenarios is at play and I’m betting it isn’t the first one:
The research was done but discarded.
No research was done.
I’ve been around pricing decisions long enough to know when something is totally BS. This is totally BS.
Brett Zalaski sent me a Tweet when I first posted about the pricing research saying that this was built off of revenue projections and I know that, but can’t I make a joke?
Why is this a pricing blunder?
First, the team has no brand equity in the market.
To demand higher prices or premium prices, you absolutely need some sort of brand equity. The Coyotes haven’t had anything resembling that in years.
Second, the team’s sales data from previous years wouldn’t show that these numbers are really valid for the team to charge.
I asked the folks at TickPick what the resale market for the Coyotes looked like and their data with limited capacity showed that the average Coyotes ticket went for $106.
So…it is anecdotal, but it doesn’t give me a strong sense that the market is willing to pay extremely high prices for the Coyotes.
What can this situation teach us about pricing?
First, pricing demands research.
I talk about this with Giles Edwards on his podcast, “Call to Action”. But you can do all kinds of pricing research including conjoint studies, experimentation, the Van Westendorp Pricing Survey, and more.
Is there a perfect pricing model?
No.
Price is pretty fluid.
What I do know is that you need to start with some solid research so that you don’t start your price conversation in your market from a point of weakness like a lot of colleges have found themselves in with prices that undermine their brand equity and teach customers that going to a game isn’t a high value event.
Same scenario here, but from the opposite side of the ledger with the prices so high that many customers are going to start off from the vantage of these tickets are too damn high.
Pricing is easy to do poorly.
I spend more time on pricing than most people and, again, check out the podcast stream and wait for my next conversation with Giles Edwards where we get into some stuff that I don’t always hit upon around pricing like price wars.
But the reality is that pricing is easy to do hard and most people end up pulling their price out of thin air because they don’t have any research backing them up.
We can easily be blinded by seemingly serious sounding ideas like:
We have to discount because people love a sale.
If we can just get fans in the building, they’ll be willing to pay full price next time.
The market will decide.
All of this is BS.
If the market will decide, you are saying that marketing and sales are unimportant.
Just because your friends jumped off a bridge doesn’t mean you should as well. Same goes for discounts.
And, I can write a novel on why the idea of comping tickets, offering $6 tickets, or penetration pricing has been a huge underminer of brand equity and value in the market for tickets.
The big thing is that pricing needs thoughtfulness, a plan, and some understanding of the philosophy of brand management, marketing, economics, and pricing strategy.
Finally, building off the last statement, pricing needs to be done more thoughtfully.
The number one challenge most businesses face is they underprice their products and services because they haven’t any clue what customers really find valuable.
In the world of live entertainment, overpricing is becoming a problem because for far too long the secondary market supported poor pricing models on the primary side in the States.
In other parts of the world where the secondary market wasn’t as prevalent, the cost of living crisis happening in many countries is squeezing people’s ability to pay for their tickets. And, even if the cost of tickets has been in line with inflation, it still makes folks prioritize one thing over another.
And, discretionary spending can take a backseat pretty easily.
To do a better job here, you need to do things like understand what your pricing philosophy is: premium or low-cost leader.
You should know how you are going to set your prices.
Will you use some sort of research like experimentation? This may mean you have to change your release schedule.
Are you going to dynamically price?
What?
You need to know.
2. The Road to Recovery: John Wall Street looks at dynamic pricing on the primary market:
Big Ideas:
Just because “everyone” is doing it doesn’t make it right.
There are positives and negatives to dynamic pricing.
The way that tickets are priced likely needs changing.
Since I just looked at the Coyotes’ ticket prices above, I won’t get into this one nearly as deeply. (Now watch me write 5,000 words on the different angles of pricing.)
But there are some interesting things to look at here.
First, there is this idea that because all of the brokers have been using dynamic pricing tools for many years that it is only right for the primary market to start using dynamic pricing as well isn’t entirely accurate to me.
When you make the dynamic pricing decision, you need to keep a few things in mind.
First, dynamic pricing does allow you to control your pricing more. You can have a chance to capture more of the revenue if an event is hot.
On the flip side, you undermine your brand loyalty. You can teach customers to hold out to see if events are going to move on prices. And, in years before the pandemic, you’d often see fans talk about the dynamic pricing only moving in one direction, up.
All of this undermines the benefits that you might feel you are accruing with dynamic pricing.
So you have to start knowing the upside and the downside of the dynamic pricing discussion.
Second, thinking of the need to dynamically price in the context of the secondary market doing it is wrong.
If you talk to any number of brokers, they are going to tell you the horror stories of dynamically pricing tickets as well.
I’m largely agnostic on the idea of using technology to help you make better pricing decisions, but I do know I’ve heard many complaints about how a seemingly small change in the market can lead to huge runs in the market and the same way fans complain about the dynamic pricing only going up, brokers complain that in a lot of these runs…it drives the price into the ground.
To be clear, this doesn’t just hurt brokers either.
It hurts the brand equity of the primary market as well, even if the primary market provider has nothing to do with the transaction.
Finally, the talk about dynamic pricing and variable pricing begs the question of whether or not the current model of on-sales, season tickets, subscriptions, etc. is up to the challenge and demands of the modern customer.
My belief is that there is a lot of room for real changes in the way that tickets are put on sale to enable teams, theaters, and venues to manage demand more productively.
Some of it can be done by technology and some will need manual intervention, but as we get a better grasp on what the future after the pandemic looks like for live entertainment, the question shouldn’t be: “Do we do more of this idea because we’ve always done things this way?”
Or, does the new question become: “What would we need to know for this to be true?”
Which opens the door to the ultimate question: “Knowing what I know now, how do I achieve my goals?”
3. How-To: Sam Freeman teaches us experimentation in arts marketing:
Big Ideas:
Experimentation in one market segment is the same process in another.
Experience matters.
Why isn’t more marketing built around research and the customer?
I need to have Sam on the podcast because he gets it.
If you read through this piece, you will see that Sam hits on a lot of my favorite ideas from the past few years of the newsletter: the customer, research, experience, and more.
The first question that Sam raises is why are folks stuck in a rut of doing things the way that they’ve always done them?
Good question.
I’ll answer it by highlighting the fact that change is hard and we aren’t often rewarded for being wrong but following a good process or taking a reasonable bet.
This forces folks to weigh whether or not their efforts should be placed on new ideas or the way things have always been.
Right now, none of us really have the luxury of sticking to our guns and doing things they’ve always been done because we are seeing that the “V” or “K” shaped recoveries have a lot of work to do to actually be relevant to our businesses.
Second, we need to do a better job of understanding our customers.
I talk about my origins in the business of nightclubs on the ‘Call to Action’ podcast that will come out in about 2 weeks or so, but the key point I make with Giles is that the key to a lot of my success was that instant connection with the customer.
Why do we struggle so mightily with connected to the customer?
Look at our incentives.
Are we rewarded for being good at customer service?
Look at how under pressure we are.
Does this give us the time or space to be empathetic and caring with our guests?
The answer to both questions is no.
But to really win the battle for the future of the live event, you are going to need to be close to the customer.
Third, experience matters most.
Sam talks about how size is always a deciding factor in the decision making process around brochures in the arts. I’m sure things like size of image, impressions, or other meaningless measures are used in many places.
The truth is that experience matters more than anything else in many cases.
When I talk about the value ladder, I’m talking about trying to get you to move your product or service up the value curve so that it hits more emotions and more experiential cues.
This stuff matters because the brochure isn’t going to be the reason that someone buys a ticket to a game or a show, but the feeling they get jumping out of their seat, dancing to a tune, or seeing their favorite musical will.
I like what Sam writes because I like his focus on customers.
I’m a broken record on this, but that’s where all of us need to turn our attention.
P.S. If you need a reminder, go back and listen to the conversation I had with Ruth Hartt.
4. Profile/Tech/Tools: Andrew Thomas talks about the 5th edition of the TPC:
Big Ideas:
This year’s TPC was bigger and better and in a new location.
The emphasis on accessibility, education, and collaboration makes the conference great.
Constant improvement is the key to long-term success.
I was fortunate enough to visit Birmingham again this year to take in another Ticketing Professionals Conference.
This one was outside of the City Center at the Vox Center which was a bigger venue with an entirely new feel to it.
This being my third TPC, I’ve seen the evolution of the event to what it is today and three things stick out to me that make the TPC the best ticketing event in Europe and one of the best in the world:
Education
Access
Collaboration
First, like Andrew mentions is the focus on education.
We’ve all been to conferences where the education agenda leaves a bit to be desired, or a lot.
This year in Birmingham, despite my state of well-being or lack of well-being, I still had the chance to jump into high quality sessions like the one’s featuring:
Robin from Baker Richards and his jury on pricing.
Kate Mroczkowski and the digital sustainability session.
Martin Gammeltoft’s marketing trends session.
The diversity in recruitment session with Lyndsey Jackson and Ash Mann.
Richard Howle and the panel on what went right during the pandemic.
I could go on, but that’s just the list I drew up without referring to any notes or any thing but memory.
Education is key.
Give folks a real learning experience and they will show up.
Second, access.
Too many times conferences are priced at a premium.
Andrew and the team have done a good job of saying we need you to support our sponsors because our sponsors make it possible to deliver a great value conference at a great price that your organization can afford.
This has achieved two things from my POV:
More diversity in the audience.
The sponsors and partners are more integrated into the program and the conference. There is no us and them. Everyone is there together.
Third, collaboration.
I’m decidedly not a ticket technology person.
But I play one on TV.
Despite barely being able to turn on a Mac, I still have been to the majority of TPCs now.
Because there is something for everyone at the conference.
That’s the beauty of the event.
That’s the design.
This is a great piece from Andrew. And, if you haven’t had a chance to visit the TPC, you should put it on your list.
5. Links and Blurbs:
The NATB will be hosting an industry dinner in Chicago on May 18th: It is a good time to check in with the team from the NATB. There is increased possibility of antitrust enforcement, new technologies, and an entirely new operating environment.
Total Ticketing expands in Asia: China, Japan, Thailand, and more. Lots of action from Total Ticketing. Check out my most recent conversation with Martin Haight.
K Pop sells more than 2.8M tickets outside of Korea: Lots of tickets sold! Lots of tickets sold!
The USFL hasn’t been drawing crowds so far: The pictures from the first couple of weekends are brutal.com. I’m not sure what the research was behind starting the league up, or starting it up now. I am a fan of the OG USFL and had Jeff Pearlman on the podcast to talk about the USFL and his book on the subject back in the OG days of the podcast.
John Daly II has a NIL deal with Hooters: I like this piece if only for the way that NIL is explained. Also, I like some of the creativity that is being used by college kids to use their brand equity to deliver value for them while they are in school.
British football fans want reform of the sport: There’s a great British writer called Michael Calvin that writes about the state of the game of football in the UK. Many of his books cover the characters and the people that populate the game, but his last two books have hit upon the corruption and corroding power of the money going into the game with no control over the direction the money is going.
In the US, we shrug.
But in the UK, people take it seriously because many folks feel like the sport is being destroyed because the system isn’t sustaining itself.
That’s what this reform effort is really about, saving the game for the next generation.
I was in Sportico with Simon Mabb a few weeks back talking about Booking Protect, refund protection, and what customers want and need now. Give it a read.
You can find me everywhere with my special Linktree! It is all my links!
Be a part of the ‘Talking Tickets’ Slack community.
Check out my friends at Booking Protect!
Thanks again to the Ticketing Professionals Team. They’ve put together a great event and just announced the new event for 2023. See y’all in Birmingham!
I did the FREE webinar this week, but had some technology issues with the live stream on Microsoft Teams. I’m not sure if was Teams or my new desktop computer, either way…I’m going to continue to play with the tech stack and I posted the audio file in the podcast stream. So, pricing ideas to your heart’s desire.
Hit some of the previous episodes. All of the ones from 2022 have been bangers: Ruth Hartt, Hannah Grannemann, Lyndsey Jackson, and, now, MK Lever. I’ve got some more good stuff coming up!
Let me know who you’d like to hear from by sharing your ideas with me here.