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Dynamic Pricing or Patron Loyalty? Do both in 2013-14

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TRG’s latest work has focused on how ticket pricing and inventory management practices impact patron loyalty. The conclusion? Pricing – especially top-end tactics like dynamic pricing – must recognize and reflect the impact of these strategies on the loyalty of subscribers, donors, group and single seat buyers alike. Why? The risk of reduced contributed revenues is too great to ignore.
In this webinar, CEO Rick Lester and President Jill Robinson offer must-know insights about the new tools, processes, and revenue results that come from placing the most loyal patrons in the best seats at the best price.

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Dynamic Pricing or Patron Loyalty? Do both in 2013-14

  1. 1. Webinar Dynamic Pricing or Patron Loyalty? (Do Both in 2013-14.)Hosted byRick Lester, CEOJill Robinson, President Copyright © 2012 TRG Arts All Rights Reserved
  2. 2. Conventional Wisdom
  3. 3. Pricing MythsHigher prices are barriers to entryHigher prices make patrons less stickyDynamic pricing is synonymous with bad customer service and damages loyaltySubscriptions are (finally) dead
  4. 4. Pricing Facts for TodayAdvocates want your company to thriveHigh value patrons generally buy “best” seats • Most expensive seats always sell firstSeason tickets are still a key to loyalty • Recency and Frequency: building blocks to loyaltyPricing plays a powerful role
  5. 5. TRG’s Patron Loyalty StudyQuantifies each patron relationship • Transactional examination across all revenue sources • Demography overlaid on a household level • History of seating choices • Patron behaviors across TRG’s National Data NetworkFindings • Each patron household scored and ranked • Results plotted onto PLI Heat Maps • Grouped into commonly defined cohorts
  6. 6. Patron Loyalty Paradigm
  7. 7. What Makes an Advocate?PerformanceAttendance• Frequency of subscription• Recent single ticket purchaseDonation Activity• Less consistent year over year
  8. 8. What Makes a Buyer?Active 3.5 Years• Buy many Tickets• 86% Recent Activity• 76% RecentMulti-BuyersFewer are Donors• Much less likely to give• Only 39% recentlySmaller Gifts• $359 annually vs.Advocates’ $7,500
  9. 9. Who are Tryers?85% of AllPatronsVery Little Loyalty•Only one year activity•Only 45% with recentpurchase
  10. 10. Generational Impact on Loyalty Patron Loyalty Compared to Patron Loyalty by Genera on Community 100% 1% 2% 5% 8% 12%100% 7% 7% 90%90% 80% 31% 25% 22% 24%80% 70% 44%70% Gen Y Gen Y 60%60% Gen X Gen X 50%50% 49% Boomers 49% 50% Boomers 40%40% Tradi onalists Tradi onalists 63%30% 30%20% 42% 20% 22% 19%10% 10% 18% 0% Total Total 0% Organiza on Community Advocates Buyers Tryers
  11. 11. Loyalty by Price Section Subscription Sales Advocates Buyers Tryers45% 20% 20%40% 18% 18% 16% 16%35% 14% 14%30% 12% 12%25% 10% 10%20% 8% 8%15% 6% 6%10% 4% 4%5% 2% 2%0% 0% 0% M1 M2 M3 M4 M5 Box L1 L2 L3 L4 L5 U1 U2 G1 G2 T1 T2 M1 M2 M3 M4 M5 Box L1 L2 L3 L4 L5 U1 U2 G1 G2 T1 T2 M1 M2 M3 M4 M5 Box L1 L2 L3 L4 L5 U1 U2 G1 G2 T1 T2 Main Floor Boxes Lower Balcony Gallery Terrace Main Floor Boxes Lower Balcony Gallery Terrace Main Floor Boxes Lower Balcony Gallery Terrace Advocates as a Percentage of Total Sales Buyers as a Percentage of Total Sales Tryers as a Percentage of Total Sales
  12. 12. Loyalty and Subscription Subscription Purchases by Loyalty Group Advocate Subscrip on Buyer Subscrip on Purchases Tryer Subscrip on Purchases Purchases 35% 60%35% 30% 50%30% 25%25% 40% 20%20% 30% 15%15% 20% 10%10% 10% 5% 5% 0% 0% 0% al ce ce ce ce s ce ce ce ce al s e e e e s l O O a O c c c c on on an an an an an an an an on an an an an CY CY CY rm rm rm rm rm rm rm rm rm rm rm rm i i i ad ad ad fo fo fo fo rfo rfo rfo rfo rfo rfo rfo rfo tr -tr tr r r r r n- Pe Pe Pe Pe Pe Pe Pe Pe Pe Pe Pe Pe n- n No No No 10 8 6 5 10 8 6 510 8 6 5
  13. 13. Scale-of-House Is your scale optimal? 5 3 1 A 116 115 114 113 112 111 110 109 108 107 106 105 104 103 17 15 13 11 9 7 5 3 1 B 116 115 114 113 112 111 110 109 108 107 106 105 104 103 21 19 17 15 13 11 9 7 5 3 1 C 116 115 114 113 112 111 110 109 108 107 106 105 104 103 23 21 19 17 15 13 11 9 7 5 3 1 D 117 116 115 114 113 112 111 110 109 108 107 106 105 104 25 23 21 19 17 15 13 11 9 7 5 3 1 E 116 115 114 113 112 111 110 109 108 107 106 105 104 25 23 21 19 17 15 13 11 9 7 5 3 1 F 117 116 115 114 113 112 111 110 109 108 107 106 105 104 27 25 23 21 19 17 15 13 11 9 7 5 3 1 G 118 117 116 115 114 113 112 111 110 109 108 107 106 105 104 27 25 23 21 19 17 15 13 11 9 7 5 3 1 H 117 116 115 114 113 112 111 110 109 108 107 106 105 104 29 27 25 23 21 19 17 15 13 11 9 7 5 3 1 J 118 117 116 115 114 113 112 111 110 109 108 107 106 105 104  Does the house naturally 29 27 25 23 21 19 17 15 13 11 9 7 5 3 1 K 117 116 115 114 113 112 111 110 109 108 107 106 105 104 31 29 27 25 23 21 19 17 15 13 11 9 7 5 3 1 L 118 117 116 115 114 113 112 111 110 109 108 107 106 105 104 31 29 27 25 23 21 19 17 15 13 11 9 7 5 3 1 M 117 116 115 114 113 112 111 110 109 108 107 106 105 104 31 29 27 25 23 21 19 17 15 13 11 9 7 5 3 1 N 118 117 116 115 114 113 112 111 110 109 108 107 106 105 104 31 29 27 25 23 21 19 17 15 13 11 9 7 5 3 1 O 117 116 115 114 113 112 111 110 109 108 107 106 105 104 33 31 29 27 25 23 21 19 17 15 13 11 9 7 5 3 1 P 118 117 116 115 114 113 112 111 110 109 108 107 106 105 104 33 31 29 27 25 23 21 19 17 15 13 11 9 7 5 3 1 R 119 118 117 116 115 114 113 112 111 110 109 108 107 106 105 35 33 31 29 27 25 23 21 19 17 15 13 11 9 7 5 3 1 S 118 117 116 115 114 113 112 111 110 109 108 107 106 105 dress? 37 35 33 31 29 27 25 23 21 19 17 15 13 11 9 7 5 3 1 T 119 118 117 116 115 114 113 112 111 110 109 108 107 106 105 37 35 33 31 29 27 25 23 21 19 17 15 13 11 9 7 5 3 1 U 118 117 116 115 114 113 112 111 110 109 108 107 106 105 37 35 33 31 29 27 25 23 21 19 17 15 13 11 9 7 5 3 1 V 119 118 117 116 115 114 113 112 111 110 109 108 107 106 105 35 33 31 29 27 25 23 21 19 17 15 13 11 9 7 5 3 1 W 120 119 118 117 116 115 114 113 112 111 110 109 108 107 106 A 3 1 35 33 31 29 27 25 23 21 19 17 15 13 11 9 7 5 3 1 X 121 120 119 118 117 116 115 114 113 112 111 110 109 108 107 106 B 3 1 35 33 31 29 27 25 23 21 19 17 15 13 11 9 7 5 3 1 Y 120 119 118 117 116 115 114 113 112 111 110 109 108 107 106C 5 3 1 33 31 29 27 25 23 21 19 17 15 13 11 9 7 5 3 1 Z 121 120 119 118 117 116 115 114 113 112 111 110 109 108 107 106 D 5 3 1 33 31 29 27 25 23 21 19 17 15 13 11 9 7 5 3 1 AA 120 119 118 117 116 115 114 113 112 111 110 109 108 107 106  Does performanceE 7 5 3 1 31 29 27 25 23 21 19 17 15 13 11 9 7 5 3 1 BB 121 120 119 118 117 116 115 114 113 112 111 110 109 108 107 106 F 7 5 3 1 29 27 25 23 21 19 17 15 13 11 9 7 5 3 1 CC 120 119 118 117 116 115 114 113 112 111 110 109 108 107 106 G 7 5 3 1 H 7 5 3 1 J 9 7 5 3 1 Grand Tier Boxes K 7 5 3 1 1 2 3 4 1 2 3 1 2 1 2 3 1 2 3 1 2 3 1 2 1 2 3 4 1 2 1 L 2 1 5 6 7 8 4 5 6 3 4 4 5 6 4 5 6 4 5 6 3 4 5 6 7 8 3 4 4 P O N M L K J H G F 3 4 9 2 5 8 X 1 6 7 1 6 7 2 3 5 4 8 9 W 2 3 6 V 1 4 5 1 4 5 U 2 3 6 2 3 6 T 1 4 5 1 4 5 S 2 3 6 2 3 6 R 1 4 5 1 4 5 P 2 3 6 2 3 6 O 1 4 5 3 4 5 Dress Circle Boxes N 2 3 6 2 3 6 M 1 4 5 1 4 5 L 2 3 6 2 3 6 K success impact per capita31 29 29 27 27 27 27 25 25 25 25 23 23 23 23 23 21 21 21 21 21 19 19 19 19 19 17 17 17 17 17 15 15 15 15 15 13 13 13 13 13 11 11 11 11 11 9 9 9 9 9 7 7 7 7 7 5 5 5 5 5 3 3 3 3 3 1 1 1 1 1 A B C D E ## ## ## ## 127 129 129 129 129 125 127 127 127 127 123 125 125 125 125 121 123 123 123 123 119 121 121 121 121 117 119 119 119 119 115 117 117 117 117 113 115 115 115 115 111 113 113 113 113 109 111 111 111 111 107 109 109 109 109 105 107 107 107 107 103 105 105 105 105 101 103 103 103 103 101 101 101 101 Dress Circle A B C D E 102 102 102 102 102 104 104 104 104 104 106 106 106 106 106 108 108 108 108 108 110 110 110 110 revenues?  Where do advocates sit? 47 45 43 41 39 37 35 33 31 29 27 25 F 17 15 13 11 9 7 5 3 1 F 112 111 Grand Circle 102 101 47 45 43 41 39 37 35 33 31 29 27 25 G 17 15 13 11 9 7 5 3 1 G 112 111 102 101 51 49 47 45 43 41 39 37 35 33 31 29 27 25 H 21 19 17 15 13 11 9 7 5 3 1 H 112 111 110 103 102 101 51 49 47 45 43 41 39 37 35 33 31 29 27 25 J 21 19 17 15 13 11 9 7 5 3 1 J 112 111 110 109 108 107 106 105 104 103 102 101 51 49 47 45 43 41 39 37 35 33 31 29 27 25 K 21 19 17 15 13 11 9 7 5 3 1 K 112 111 110 109 108 107 106 105 104 103 102 101 51 49 47 45 43 41 39 37 35 33 31 29 27 25 L 21 19 17 15 13 11 9 7 5 3 1 L 112 111 110 109 108 107 106 105 104 103 102 101 51 49 47 45 43 41 39 37 35 33 31 29 27 25 M 21 19 17 15 13 11 9 7 5 3 1 M 112 111 110 109 108 107 106 105 104 103 102 10153 51 49 47 45 43 41 39 37 35 33 31 29 27 25 N 21 19 17 15 13 11 9 7 5 3 1 N 112 111 110 109 108 107 106 105 104 103 102 101 51 51 49 49 47 47 47 47 45 45 45 45 43 43 43 43 41 41 41 41 39 39 39 39 37 37 37 37 35 35 35 35 33 33 33 33 31 31 31 31 29 29 29 29 27 27 27 27 25 25 25 25 O P R 17 17 S 21 19 T 21 19 15 15 17 17 13 13 15 15 11 11 13 13 9 9 11 11 7 7 9 9 5 5 7 7 3 3 5 5 1 1 3 3 1 1 O P R S 112 112 109 109 111 111 108 108 110 110 107 107 109 109 Terrace Circle 106 106 108 108 105 105 107 107 104 104 106 106 103 103 105 105 102 102 104 104 101 101 103 103 102 102 101 101  Are areas selling out? 51 49 47 45 43 41 39 37 35 33 31 29 27 25 U 21 19 17 15 13 11 9 7 5 3 1 T 112 111 110 109 108 107 106 105 104 103 102 101
  14. 14. F E D C AB A
  15. 15. Supply and Demand Supply “Fixed” Demand (D) Price Demand (D) Price Supply (S) Supply (S) EquilibriumP1 A P1 A Quan ty Quan ty Q1 Q1
  16. 16. Supply and Demand D1 D2 D2 Demand (D) D1 Price Price Price P1 P2P1 A P21 P3 Quan ty Quan ty Q1 Q1 Q2
  17. 17. Supply and Demand Demand (D) Price P1 A P2 B P3 C Quan ty Q1 Q2 Q3
  18. 18. Tools for Managing Demand Perception of success Per capita revenues Inventory management
  19. 19. Perceived Demand Drives: Organizational Relevancy Subscriber/Member Renewals Subscriber/Member Acquisition Single Tickets Contributed Revenues Sponsorship Irrational Behavior
  20. 20. Perceived Demand Drives: Organizational Relevancy Subscriber/Member Renewals Subscriber/Member Acquisition Single Tickets Contributed Revenues Sponsorship Irrational Behavior

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