This post marks the third installment of the Maximizing Your Community Theater’s Event Value series. You can find our previous posts on the topic here and here. Today we will be taking a closer look at ticket pricing and the tremendous impact that smart pricing strategies can have on your bottom line.
Put simply, there are two ways to reach your maximum event value through optimal ticket pricing:
- Determining multiple acceptable ticket prices for your audience.
- Managing ticket discounts to help you increase revenue.
In this article we will only be discussing the first strategy…so stay tuned for our post on ticketing discounts! Managing multiple ticket price points can be a finicky process that requires some number crunching and careful consideration. Your first step towards optimal ticket pricing is abandoning general admission tickets.
Assigned seating in theatres provides a fantastic avenue to leverage different price points. It helps you to more closely meet your event’s theoretical demand curve and generate maximum ticket revenue – both of which are fantastic news for your community theater! Assigned seating also keeps your customers happy by allowing them the choice to pay more (or less) for a ticket with the peace of mind that they will get the seat they want.
Let’s take a look at an example to better illustrate the benefits of assigned seating:
XYZ Community Theater has a venue with 1000 seats and the demand curve – which demonstrates an estimation of how many people are willing to purchase tickets at different price points – looks like this:
Or this (if you prefer a graph):
If XYZ Community Theater opts for general admission pricing there is no way to capture the venue’s maximum ticket revenue and have a sold out show. The following would be the result:
- At $10, revenue is $10 x 1000 = $10,000
- At $15, revenue is $15 x 900 = $13,500
- At $20, revenue is $20 x 700 = $14,000
- At $25, revenue is $25 x 500 = $12,500
With general admission set at $20 per ticket XYZ can capture their greatest potential ticket revenue; however, they have 300 empty seats!
Now, let’s consider the assigned seating alternative. We’ll use the same price points and demands as the general admission pricing, but we will introduce a tiered supply of tickets.
Ticket Pricing Best Practice Tip: Make your supply of tickets less than the demand at each price point. This takes into account that although 500 people are willing to pay $25 for a ticket, they may choose to purchase a lower priced seat if there are tickets available.
With this assigned seating ticket pricing, XYZ would generate the following ticket revenue:
- $25 x 300 = $7,500 +
- $20 x 400 = $8,000 +
- $15 x 300 = $4,500
- Total revenue = $20,000
Opting for assigned seating allows XYZ to capture an additional $6,000 in ticket revenue and more closely meet the demand curve!
TicketPeak allows for complete flexibility in terms of assigned seating pricing. You have the ability to select and set multiple price points for any seat (or section of seats).
Click on the document below to access your free, fully downloadable whitepaper, which covers the complete Maximizing Your Community Theater’s Event Value series, as well as ways in which TicketPeak can help your organization optimize your results.