Event pricing strategies
 

Event pricing strategies

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Are you getting as many participants as you would like? What about your revenue goals ...

Are you getting as many participants as you would like? What about your revenue goals
— are you hitting them? There are lots of ways to boost your revenue and participation:
increasing advertising and marketing, changing your race course, offering better
participant merchandise or adding events like a fun run or a children’s race. But one
often overlooked tactic is to adjust your event pricing strategy.

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    Event pricing strategies Event pricing strategies Document Transcript

    • EVENT PRICING STRATEGIES THAT MAKE A BIG IMPACT ON REVENUE
    • Event pricing strategies that make a big impact on revenuewww.ACTIVEnetwork.co.uk/onlineregistration 2 SET YOUR GOALS AND GET INPUT 3 CREATE URGENCY 3 DETERMINE WHEN TO OPEN ONLINE REGISTRATION 4 SET PRICE POINTS 5 OFFER PRICE BREAKS 6 Are you getting as many participants as you would like? What about your revenue goals — are you hitting them? There are lots of ways to boost your revenue and participation: increasing advertising and marketing, changing your race course, offering better participant merchandise or adding events like a fun run or a children’s race. But one often overlooked tactic is to adjust your event pricing strategy. It’s not as complicated as it sounds. This whitepaper breaks down the 5 elements of creating an event pricing strategy to help you drive revenue and participation:
    • Event pricing strategies that make a big impact on revenuewww.ACTIVEnetwork.co.uk/onlineregistration 3 1. SET YOUR GOALS AND GET INPUT How much time do you typically spend formulating your pricing strategy from one year to the next? And how do you go about it? In general, race directors approach this in one of the following ways: Look at last year’s prices and quickly update the dates. Sit down and brainstorm pricing with other team members internally.  Compare price breaks and fees to other events in the region and update your fees accordingly.  Reach out to external resources (e.g. your race management software provider or event management company) to get input on industry trends. Industry analysis tell us that most race directors choose the first approach: they simply add a few dollars to their registrations fees and adjust the dates of price breaks to mirror the previous year. In other words, minimal changes are made from one year to the next and race directors quickly move on to other tasks they consider a higher priority. Each event is unique and there is no right or wrong answer, but taking time to set goals around registration and revenue numbers is vitally important. This is something that should be done each year, for every event you organise. You can accomplish the above by setting a target registration number for your event. Unless you have a registration cap or are expecting some natural disaster, plan to increase your numbers from the previous year—an average increase is 10%. From there, you can estimate a revenue goal. It is also highly recommended that you reach out, both internally and externally, for input. Other team members may have insight or ideas that could impact your goals. Externally, you shouldn’t hesitate to tap into the knowledge of your race software provider or event management company. These companies have unique insight because they work with events year round and can offer educated advice on pricing trends.
    • Event pricing strategies that make a big impact on revenuewww.ACTIVEnetwork.co.uk/onlineregistration 4 2. CREATE URGENCY One important lesson to remember is - participants need to have a reason to register now. Otherwise they will delay for a variety of excuses: the event is too far out, they haven’t trained, they’re recovering from injury, they’re worried about the weather, etc. Pricing incentives and a limited capacity are the primary reasons people register early for an event. If there’s no incentive, no urgency, then why not wait until the last minute? Your job as a race director is to work with the consumer buying behaviour to drive people to register when you want them to.  With the tips above you are still offering participants the same options, and in some cases, more options. But you are simultaneously enticing people to register immediately, which boosts your numbers and revenue. Not to mention, it allows you to plan in advance instead of having to manage a last minute rush of registrations on race weekend! How to make it happen When you first open registration, offer a low early-bird price that is only valid for 10 days or for the first 100 registrants. Everyone loves a good deal and you’ll be providing participants with an affordable option, while driving urgency for registration. Or, you can promote the fact that registration is limited and will sell out soon. If you have an event with a variety of distances or categories—marathon and half marathon, or team and relay groups—put a cap on one of the choices to test out how much demand your participants have for that particular distance/category. If you’re hesitant to set a cap because it may limit your opportunities, remember that you can always adjust your strategy during registration and raise the cap if necessary.
    • Event pricing strategies that make a big impact on revenuewww.ACTIVEnetwork.co.uk/onlineregistration 5 3. DETERMINE WHEN TO OPEN ONLINE REGISTRATION You can open registration immediately after your event for the next year’s race, or you can wait. Again, there is no right answer and you have to assess what is right for your particular event, but here are the benefits of opening registrations for next year right after this year’s event. For smaller events and shorter distance events like 5Ks, 10Ks and sprint triathlons, opening registration at a later date may be a better option. If you do decide to wait, it is important build some buzz around when you do open. You aren’t coasting on the adrenaline of participants who just left your finish line and are headed to your website, so create new excitement to get people jumping at the chance to register. The best way to pump up that excitement is to make participants feel special. There are a variety of ways to do this: you can offer a pre-sale registration to past participants, offer event gear for the first 100 registrants, or offer a limited-time early-bird price. Everyone likes to feel special and if you add an air of exclusivity to your event, you’ll be able to improve interest while getting people to register on your schedule. The Benefits Capitalises on positive post-event energy Takes advantage of the online traffic flooding to the race results on your website (often the highest web traffic days of the year for events).  Gives more time for participants to communicate your event to their friends and family, especially via social media.  Evens out cash flow with a steady stream of incoming registrations, which can alleviate the burden of some operating expenses.
    • Event pricing strategies that make a big impact on revenuewww.ACTIVEnetwork.co.uk/onlineregistration 6 4. SET PRICE POINTS Industry research tells us that most events are too conservative with their fees. Event organisers consistently report that they are very sensitive to the squeaky wheels who complain about high fees, but that overlooks the vast majority of participants who don’t complain. The point to remember is that some participants are extremely price sensitive, but others are not. A pricing strategy can help you make that work to your advantage. We’ve already discussed how offering a special promotional price when registration opens can drive early registrations. For example, you can offer a deep discount (50%) in a pre-sale promotion to a limited number of participants. This gives people an affordable option and can alleviate any complaints about high fees. When participants are given the option to register at a cheap price point, then they recognise that choosing to wait will ultimately mean paying a higher price. If participants are choosing to wait, it follows that they are not as price sensitive as your early birds. Maximise your opportunity on last minute sign ups! Increase your final price points because most of those registration decisions are based on factors other than price. It’s not a price decision, so an extra £5 increase won’t impact late registrants and will boost your revenue.
    • Event pricing strategies that make a big impact on revenuewww.ACTIVEnetwork.co.uk/onlineregistration 7 5. OFFER PRICE BREAKS Offering multiple price points gives people a reason to register early and drives urgency throughout the open registration period. The total number of price breaks depends on when you open and on the specific goals of your event, but 4-5 breaks are recommended per industry trends. Some events change prices every month, some only offer two or three total. HERE ARE THREE BEST PRACTICES FOR SETTING PRICE BREAKS: Add a price break 1-2 weeks before registration closes. Remember, pricing is not the driver for participants who register at the last minute. They are more impulsive and you can use this knowledge to get a bump in registrations and revenue. Based upon demand and inventory, plan to reach your final price point as early as possible. This is extremely important for events that expect to sell out because you won’tmiss out on potential revenue. Reaching your registration cap at an early (lower) price point ahead of your expectations can hurt your budget. Move up your final target price so you can hit your highest target price as soon as possible.  Note: This strategy strategy is not for everyone. If you don’t expect to sell out, you can increase revenue with this technique, but it may come at the expense of increasing total registrations. Strike the balance and do what’s best for your event.
    • Event pricing strategies that make a big impact on revenuewww.ACTIVEnetwork.co.uk/onlineregistration 8  Set a registration cap to establish a ceiling and create added urgency. Capping registration—whether just for one category or for your entire event — can push participants to feel that if they don’t sign up soon, they’ll miss out. Promote the “close to sell out” message avidly to get spikes in registration numbers – include it on your website, in newsletters, and in emails to past participants. How you set your cap is your decision. Your event is unique and you can work with your race management software provider to determine the best strategy. At the end of the day, the public never really knows if you are actually sold out, so you can set a limit to build urgency for registration, but also raise the cap if needed. Setting a cap is simply another way to promote your event in a way that grabs the attention of participants. Ultimately, price breaks do make a big difference—you’ll see a surge in registrations at each break and you’ll keep momentum moving for your event. Case Study 1 – Top-Tier Marathon: Event Goals: Create urgency earlier and drive more registrations, while increasing total revenue.  Sell out earlier.  No increase in fees. ACTIVE Network Pricing Strategy: Add one additional price point. Move up price breaks to hit the final price point before the anticipated sell-out. Results:  £0 increase in event fees. The event started and finished at the same registration prices, so there was no additional impact to runners. The marathon sold out 26 days earlier than the previous year. £158,000 additional revenue generated. This is based on a year over year comparison of the same number of registrations. 2010 June - £55 September – £65 November - £85 2011 April - £55 May - £65 June - £75 November - £85
    • Event pricing strategies that make a big impact on revenuewww.ACTIVEnetwork.co.uk/onlineregistration 9 Case Study 2 – Mid-Size Event: Event Goals: Improve cash flow by increasing early registrations. Sell out categories (event had not sold out previously). Increase total revenue. Work around limited registration inventory and hard caps. ACTIVE Network Pricing Strategy: Introduce additional time-based price points.  Open registration three months later than the 2010 event (per client request). Drive demand by offering a limited early bird price—a significant fee reduction was available for 10 days. Results:  Doubled goal for registration numbers during the 10-day early bird price option.  Over 400% increase in registrations and revenue year over year by the time the event reached its second price break.  Sold out 3 of the 4 categories for the first time (marathon, half marathon, 5K).  Increased total revenue by £51,700 and increased revenue by £13,500 for the same number of registrations over the previous year. 2010 June - £45 September - £55 October - £65 2011 January - £35 May - £45 August - £55 September - £65 October - £75 Because ACTIVE Network works with over 10,000 endurance events annually, we have insight into what works and what doesn’t. We see: How much events are charging. When participants are registering. Which events are growing. When events sell out. When events open. When events close. Most importantly, we recognise that each event is different and that every pricing strategy should be unique. ACTIVE can work closely with you to examine industry averages and trends, acting as valuable external resource to help build your best pricing strategy.
    • Event pricing strategies that make a big impact on revenuewww.ACTIVEnetwork.co.uk/onlineregistration 10 LEADER IN ACTIVITY AND PARTICIPANT MANAGEMENT Sometimes when we’re talking to event directors they say ‘You guys provide online registration software, don’t you?’ That’s true, but we really are so much more than that. We are your marketing magicians, your pricing advisers, your best practices buddies, and more. We are your partner and we are as dedicated as you are to growing your event and the industry. And we are also participants, which gives us a special insight into your world. 10 Easy Ways T       WANT TO LEARN MORE? UNITED KINGDOM & IRELAND +44 (0) 207 554 0949 Connect.EMEA@ACTIVEnetwork.com SINGAPORE +65 6692 6072 AUSTRALIA 1800 229 019 NEW ZEALAND 0800 452 608 Connect.APAC@ACTIVEnetwork.com