TRG Webinar: Dynamic Pricing is NOT the Story

1,054 views

Published on

Dynamic pricing, the tactic of raising prices after tickets go on sale, has often been in industry headlines these days. However, when it comes to growing revenue and increasing patron loyalty, it’s not the whole story. While it’s true that Vancouver's Arts Club Theatre Company (ACTC) generated six-figure revenue from dynamic pricing, the real news is how ACTC increased the number of its most loyal subscribers. Presented in August 2011, TRG consultants and ACTC staff retell ACTC’s $3 million client success story, including how:

- Loyalty strategies -- not pricing tactics -- led to sustaining revenue.
- Unified, company-wide change in focus brought about increased revenue and subscribers.
- Dynamic pricing made subscribing more valuable.

Published in: Education
  • Be the first to comment

  • Be the first to like this

TRG Webinar: Dynamic Pricing is NOT the Story

  1. 1. WebinarDynamic Pricing is NOT The Story
  2. 2. Welcome Rick LesterChief Executive Officer
  3. 3. Please:• Keep your phone on mute. To ensure everyone hears the webinar audio, you were placed on mute when you signed in.• Use Q&A feature to ask questions. – Lower right corner of your screen. – Type your question in the text box. – Send. – Moderator will field and ask questions following the presentation.
  4. 4. The tactic of dynamic pricing is the practice ofraising ticket prices after they go on sale forprograms that have high patron demand.It’s demand strategies – not tactics -- that leadto sustainable patronage and revenue.DYNAMIC PRICING
  5. 5. Presenters Howard Jang Executive DirectorArts Club Theatre Company Laura Willumsen TRG Senior Consultant
  6. 6. ARTS CLUB THEATRE COMPANY
  7. 7. ALVIN AILEY: One-Season Success $1 Million Increase in Revenues 64,000 $4,500 Sales Revenues (thousands) 62,000 $4,000 60,000Admissions $3,500 58,000 $3,000 56,000 $2,500 54,000 52,000 $2,000 2000 2001 2002 2003 2004 2005 2006 Seats Sold 58,245 62,221 55,603 56,512 59,193 56,873 60,634 Revenue $2,511 $2,669 $2,622 $2,742 $3,028 $2,960 $3,958
  8. 8. BOX OFFI CE REVENUE 2003- 2008$6,000,000$5,000,000$4,000,000$3,000,000 Total Revenue Budgeted goal$2,000,000$1,000,000 $-
  9. 9. “If Ailey made $1 million, wouldn’t it be greatif we could make $200K?”
  10. 10. REVOLT!
  11. 11. Enter the Americans
  12. 12. Timing is everything!
  13. 13. Step 1: Prices not right TOO MANY DISCOUNTS • Groups, Seniors, Students 1-PRICE HALL • Different price each night STUCK IN THE MIDDLE • Top price too low • Bottom price too high That approach led to…
  14. 14. Medium sold show at the Stanley 2007-08 Stanley Theater 08-09 10172008 RIGHT BALCONY CENTRE BALCONY LEFT BALCONY 149 148 147 146 145 144 143 142 141 140 8 8 110 109 108 107 106 105 104 103 102150 149 148 147 146 145 144 143 142 141 140 7 135 134 133 132 131 130 129 128 127 126 125 124 123 122 121 120 7 111 110 109 108 107 106 105 104 103 102 101150 149 148 147 146 145 144 143 142 141 140 6 135 134 133 132 131 130 129 128 127 126 125 124 123 122 121 120 6 111 110 109 108 107 106 105 104 103 102 101150 149 148 147 146 145 144 143 142 141 140 5 135 134 133 132 131 130 129 128 127 126 125 124 123 122 121 120 5 111 110 109 108 107 106 105 104 103 102 101150 149 148 147 146 145 144 143 142 141 140 4 135 134 133 132 131 130 129 128 127 126 125 124 123 122 121 120 4 111 110 109 108 107 106 105 104 103 102 101150 149 148 147 146 145 144 143 142 141 140 3 135 134 133 132 131 130 129 128 127 126 125 124 123 122 121 120 3 111 110 109 108 107 106 105 104 103 102 101150 149 148 147 146 145 144 143 142 141 140 2 135 134 133 132 131 130 129 128 127 126 125 124 123 122 121 120 2 111 110 109 108 107 106 105 104 103 102 101150 149 148 147 146 145 144 143 142 141 140 1 135 134 133 132 131 130 129 128 127 126 125 124 123 122 121 120 1 111 110 109 108 107 106 105 104 103 102 101 RIGHT ORCHESTRA CENTRE ORCHESTRA LEFT ORCHESTRA50 49 12 35 34 33 32 23 22 21 20 12 2 1 11 29 28 27 26 25 11 10 30 29 28 27 26 25 10 9 35 34 33 32 31 30 29 28 27 26 25 24 23 22 21 20 950 49 48 47 46 45 44 43 42 41 40 8 35 34 33 32 31 30 29 28 27 26 25 24 23 22 21 20 8 11 10 9 8 7 6 5 4 3 2 150 49 48 47 46 45 44 43 42 41 40 7 35 34 33 32 31 30 29 28 27 26 25 24 23 22 21 20 7 11 10 9 8 7 6 5 4 3 2 150 49 48 47 46 45 44 43 42 41 40 6 35 34 33 32 31 30 29 28 27 26 25 24 23 22 21 20 6 11 10 9 8 7 6 5 4 3 2 150 49 48 47 46 45 44 43 42 41 40 5 35 34 33 32 31 30 29 28 27 26 25 24 23 22 21 20 5 11 10 9 8 7 6 5 4 3 2 150 49 48 47 46 45 44 43 42 41 40 4 35 34 33 32 31 30 29 28 27 26 25 24 23 22 21 20 4 11 10 9 8 7 6 5 4 3 2 150 49 48 47 46 45 44 43 42 41 40 3 35 34 33 32 31 30 29 28 27 26 25 24 23 22 21 20 3 11 10 9 8 7 6 5 4 3 2 150 49 48 47 46 45 44 43 42 41 40 2 35 34 33 32 31 30 29 28 27 26 25 24 23 22 21 20 2 11 10 9 8 7 6 5 4 3 2 1 48 47 46 45 44 43 42 41 40 1 35 34 33 32 31 30 29 28 27 26 25 24 23 22 21 20 1 11 10 9 8 7 6 5 4 3 46 45 44 43 42 41 40 A 35 34 33 32 31 30 29 28 27 26 25 24 23 22 21 20 A 11 10 9 8 7 6 5 STAGE Highly visible holes up front and on sides
  15. 15. Solution 1: Rescale, Price Right NO AUTOMATIC DISCOUNTS 3-PRICE HALL: all available every night • Helped fill visible holes $25 LOW-ENTRY PRICE • Advertised everywhere Results from the new approach…
  16. 16. Medium sold show at the Stanley 2008-098 149 148 147 146 145 144 143 142 141 140 8 8 110 109 108 107 106 105 104 103 1027 150 149 148 147 146 145 144 143 142 141 140 7 135 134 133 132 131 130 129 128 127 126 125 124 123 122 121 120 7 111 110 109 108 107 106 105 104 103 102 1016 150 149 148 147 146 145 144 143 142 141 140 6 135 134 133 132 131 130 129 128 127 126 125 124 123 122 121 120 6 111 110 109 108 107 106 105 104 103 102 1015 150 149 148 147 146 145 144 143 142 141 140 5 135 134 133 132 131 130 129 128 127 126 125 124 123 122 121 120 5 111 110 109 108 107 106 105 104 103 102 1014 150 149 148 147 146 145 144 143 142 141 140 4 135 134 133 132 131 130 129 128 127 126 125 124 123 122 121 120 4 111 110 109 108 107 106 105 104 103 102 1013 150 149 148 147 146 145 144 143 142 141 140 3 135 134 133 132 131 130 129 128 127 126 125 124 123 122 121 120 3 111 110 109 108 107 106 105 104 103 102 1012 150 149 148 147 146 145 144 143 142 141 140 2 135 134 133 132 131 130 129 128 127 126 125 124 123 122 121 120 2 111 110 109 108 107 106 105 104 103 102 1011 150 149 148 147 146 145 144 143 142 141 140 1 135 134 133 132 131 130 129 128 127 126 125 124 123 122 121 120 1 111 110 109 108 107 106 105 104 103 102 101 RIGHT BALCONY CENTRE BALCONY LEFT BALCONY12 50 49 12 35 34 33 32 23 22 21 20 12 2 111 11 29 28 27 26 25 1110 10 30 29 28 27 26 25 10 9 9 35 34 33 32 31 30 29 28 27 26 25 24 23 22 21 20 9 8 50 49 48 47 46 45 44 43 42 41 40 8 35 34 33 32 31 30 29 28 27 26 25 24 23 22 21 20 8 11 10 9 8 7 6 5 4 3 2 1 7 50 49 48 47 46 45 44 43 42 41 40 7 35 34 33 32 31 30 29 28 27 26 25 24 23 22 21 20 7 11 10 9 8 7 6 5 4 3 2 1 6 50 49 48 47 46 45 44 43 42 41 40 6 35 34 33 32 31 30 29 28 27 26 25 24 23 22 21 20 6 11 10 9 8 7 6 5 4 3 2 1 5 50 49 48 47 46 45 44 43 42 41 40 5 35 34 33 32 31 30 29 28 27 26 25 24 23 22 21 20 5 11 10 9 8 7 6 5 4 3 2 1 4 50 49 48 47 46 45 44 43 42 41 40 4 35 34 33 32 31 30 29 28 27 26 25 24 23 22 21 20 4 11 10 9 8 7 6 5 4 3 2 1 3 50 49 48 47 46 45 44 43 42 41 40 3 35 34 33 32 31 30 29 28 27 26 25 24 23 22 21 20 3 11 10 9 8 7 6 5 4 3 2 1 2 50 49 48 47 46 45 44 43 42 41 40 2 35 34 33 32 31 30 29 28 27 26 25 24 23 22 21 20 2 11 10 9 8 7 6 5 4 3 2 1 1 48 47 46 45 44 43 42 41 40 1 35 34 33 32 31 30 29 28 27 26 25 24 23 22 21 20 1 11 10 9 8 7 6 5 4 3A 46 45 44 43 42 41 40 A 35 34 33 32 31 30 29 28 27 26 25 24 23 22 21 20 A 11 10 9 8 7 6 5 RIGHT ORCHESTRA CENTRE ORCHESTRA LEFT ORCHESTRA  Moved patrons from back to front Filled visible holes on sides
  17. 17. The Payoff Arts Club Theatre 16% increase Per Capita Growth = $5 per$80 ticket!$70$60$50$40$30$20$10 $- 2007-08 2008-09 2009-10 Subscriptions Singles
  18. 18. Step #2:Comp Tickets Out of Control 22,000 comps in 0708 • At average ticket price of $35, worth $ 770,000 • Required a culture shift The steps we took
  19. 19. Solution #2: Get Control of Comp Tickets Arts ClubStrict new policies Total Ticket Revenue vs. Comp Tickets •Especially for high- $8,000,000 25,000 $7,000,000 revenue shows 20,000 $6,000,000 $5,000,000 15,000Reduced comps by $4,000,000 10,0007,000 in two years $3,000,000 • $266K value $2,000,000 5,000 $1,000,000 $- - 2007-08 2008-09 2009-10 Total Revenue Comps
  20. 20. Step #3: Stop selling late!“Everyone here waits to the last minute to buy!”
  21. 21. Solution #3: Reward early buying! WHITE CHRISTMAS: THE MUSICAL OPENING NIGHT SOLD OUT!$1,200,000$1,100,000$1,000,000 $900,000 $800,000 $700,000 $600,000 $500,000 $400,000 $300,000 $200,000 $100,000 $0 YTD Actuals Sales Goal Previous pattern = 25%-40% revenue made during the production
  22. 22. Step #4: Confront Flexibility EVERYONE ACTC Stanley Subscriptions FY05 - FY09wants 8,000 7,000flexibility, right ? 6,000 5,000ACTC offered 4,000 3,000multiple flex pass 2,000 1,000options throughout 0their campaign 2004-05 2005-06 2006-07 2007-08 2008-09 Stanley 6,870 6,779 6,891 7,075 7,014
  23. 23. Arts Club TODAY Focused on High-Loyalty Subscriptions STANLEY SERIESUP • High renewal rates ACTC Stanley Subscriptions FY05 - FY11 up 33% (average 77%) 10,000 • Units up 33% 9,000 • Revenue up 62% 8,000 7,000 6,000 TRGFLEX SERIES 5,000 TRG 4,000DOWN 3,000 • Low renewal rates 2,000 (13%-48%) 1,000 0 • Units down from 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 40% of subs in 0708 Stanley 6,870 6,779 6,891 7,075 7,014 8,609 9,328 to 22% in 1011
  24. 24. Oh yes….we did dynamic pricing! $430K $4.4 million We had the programs!
  25. 25. Dynamic pricing REVENUE: 10% of all single & group revenue (0809) NEW WAY TO WORK: Revenue Pacing Meetings • New sales pacing reports • Heat maps • Sold capacity by performance & price point • Comps & holds
  26. 26. But wait…there’s more! Dynamic pricing helped sell subscriptions!
  27. 27. So what did it take? Willingness to change Leadership ensuring that everyone is on board Intense focus on high-loyalty packages • Greater investment = greater benefits Relentless focus on demand • Pricing based on demand • Inventory management to improve perception • Programming that generated demand RESULTS?
  28. 28. Arts Club RESULTS 66% increase in All ticket revenue through 0910 revenue from 0708 almost $3 million ACTC Ticket Revenue FY04 - FY10$8,000,000$7,000,000$6,000,000$5,000,000$4,000,000$3,000,000 TRG$2,000,000$1,000,000 $0 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10Single Tickets $2,857,899 $3,030,655 $3,428,298 $2,965,951 $2,684,263 $4,463,706 $5,115,463Subscription $1,183,290 $1,414,451 $1,559,292 $1,644,498 $1,772,694 $1,912,326 $2,291,351
  29. 29. AND THE SURPLUS BUILT… Improved Facilities for Patrons!
  30. 30. Webinar Questions?Dynamic Pricing is NOT the Story
  31. 31. WebinarWhat’s new? What’s next? www.trgarts.com

×