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May 7, 2011

Arts discount-ticketing strategies: what to avoid and why — part 2

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In my last post, I spent some time talking about advance sales and discount ticketing strategies, as well as how it’s too easy to train the patron to wait for a better deal if you offer large discounts late in the game. I mentioned that “the right thing to do here is create a marketing strategy that offers the most discount to people who give up the most convenience.” It’s enticing and effective to trade one thing for another (in this case, giving up convenience to get a discount back). I think we’ll see this idea of “trading something for something else” pop up again later on.

I also began to talk about discount ticketing, below, we’ll cover group-based buying programs (the half-price ticket program being an old favorite, and new group-purchase sites such as Groupon.com and LivingSocial that have recently come on the scene).

Half-price theatre tickets: deep discount or exposure to new opportunities?

Half-price tickets are hot. From the TKTS booth in New York City, to your local arts service organization with a half-price ticket list, the idea of “half-price tickets” activates the brain in an exciting way. First, there is the idea of the huge discount — similar to what you might feel when you say a $200 awesome leather jacket marked down to $100. A steal, right? Then there is the idea that they are limited (and we recommend limiting them) — get them while they’re hot, as they won’t be around long. Two powerful incentives to buy those tickets right now!

Let’s pause for a moment and ask ourselves “what’s the purpose of selling a half-price ticket?” If opening night is tomorrow night, and you have no tickets sold, half-price ticketing the house is not a good solution, for all the reasons I mentioned in the last post. So what else can we do with it? With a thought-out strategy, I believe that:

  • Half-price tickets are good to move unsold inventory — as long as you limit the number of tickets to a small amount and/or control it in some way.
  • Half-price tickets are a good way to sell obstructed seats — look at Cirque du Soliel… they will often sell a discount ticket for seats that have the tent pole in the view of the patron. If you’re ok with that, they’ll hook you up. Great use of a discounted seat.
  • Half-price tickets theoretically allow people to see experiences they wouldn’t normally go to — for example, a 50%-discounted theatre ticket might push you over the edge to seeing a show that is outside your normal genre of arts events, and you might discover you like it.
  • Half-price tickets theoretically allow people to experience twice as many arts events than they could on the same budget — if people are devoting twice the amount of time to the arts than they were before, that’s a good thing.

The first two are pretty clear. On the last two, I say “theoretically” because although I’ve heard patrons say they use half-price tickets for these things, I’ve never seen any hard data that proves that they behave in this way. If you’ve got a half-price ticket program running on a strong CRM, let me know and perhaps we can look at the data together and find out.

Additionally, when selling a half-price ticket, you MUST put some mechanism in place to capture the patron’s contact information. This might come with selling the ticket (they buy an e-ticket for which you have an email address, for example) or you may need to get it in other ways. Remember that idea of “trading something for something else”? Here, you’re trading profit on the ticket for the ability to market to the patron later on for another show.

Super-deep discounts: Groupon and LivingSocial for the arts

There is a lot of buzz about Groupon and Living Social. If you’ve been out of the loop (hey, welcome back!) you may not know that these services use a powerful combination of time limit, offer limit, and a need to have a certain number of people agree to buy the deal before the deal switches “on” and folks can redeem the highly discounted offers for restaurants, spas, vacation packages, and often, arts events. So you have a natural wish to share these offers with your friends, so you can get the deal yourself. These services move a LOT of offers. Here’s a short video explaining how these services work:

If you do some searches on the web, you can find both positive and negative experiences of those who have placed ads with these services. Just do your homework. Ask others in the arts community who have used these channels to tell you about their experience. These services offer a huge amount of exposure at no direct cost, but can often have a high indirect cost (what you’re losing on the sale when the customer redeems the coupon). The exact terms of the deal with these services is up to the two parties, but the rule seems to be you’ll offer something at 50% discount, and the service will take 50% of the sale, leaving you with 25% of original revenue. So, $20 ticket, sold for $10, the service gets $5, and you get $5. $5 instead of $20 is a pretty large drop, so what are you “trading” for here? In this case, it’s profit for exposure (and hopefully the patron’s contact information). Nothing wrong with playing in this space, but just remember that if the patron is going to get a benefit (lower cost), they should give up some value for it (restricted days to attend? Obstructed seats? Back of the house only? Use your imagination). But doing these with no restrictions can cause real problems as you might imagine. If the service doesn’t allow you to cap the number of offers sold, then you’ll need to design your offering  so there is some way for you to control the fulfillment.

How can your arts event ticketing system help?

Your ticketing system can play a big part in discounting as well. I’m surprised that I don’t see more promotion-code use in online ticketing, where several unique promotion codes are used through different marketing channels so the arts org can track which campaigns are bringing in the most ROI. That’s pretty easy to do… mention the use of one promotion code on Facebook, and use another promotional code on Twitter, or on radio, or on TV. It’s a great way to look at actual ROI on advertising and marketing spend, because it means you’ve actually sold a ticket.

I also really like that some ticketing systems are now allowing you to “get social” in the middle of the transaction. As part of the checkout process, some systems allow you to share on Facebook and Twitter that you’re buying a ticket to a specific performance, and when the message goes in the newsfeed, it asks your friends if they’d like to purchase a ticket to go with you to the same specific performance. I don’t have any data yet on how often this feature is used, but I am seeing it included in more ticketing systems, and I sure like the idea. I think it will be commonplace in ticketing systems within the year, so if you’re looking at a new ticketing system, make sure it’s on their radar.

Bottom line, there is nothing wrong with changing the price of the ticket to gain other things (trade paying less for buying in advance, trade paying less for giving over your contact information, trade paying more for convenience of last-minute decision making, trade paying more for a premium experience, etc.). Just make sure you’re considering the tradeoff, and including that in your calculations. And above all, experiment, share your results, and learn from any failures, so that you can improve your results over time. For further case studies and discussion on these issues, I recommend you check out the cool site http://www.thinkaboutpricing.com. They are collecting quite a fine library of articles and know-how on the subject.

If you’re looking for a new ticketing system, I’m happy to talk to you and point you in the right direction. You should also check out http://theticketinginstitute.com run by my friend Roger Tomlinson, and read the 2011 Ticketing Software Satisfaction Survey Report from the smart folks at Technology in the Arts.

Happy ticketing!

-Ron

Like this post? Please share it with others who you think might benefit from it, via the links below, and subscribe via email or RSS to receive future updates. Ron Evans is an arts marketing and consumer psychology researcher, and principal consultant at Groupofminds.com Arts Marketing Consultants in Sunnyvale, CA, USA. He helps arts audiences increase their understanding, appreciation, and frequency of attendance through innovative uses of technology.

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About Ron Evans

I am an arts marketing and consumer psychology researcher, and principal consultant at Group of Minds. I advise leaders on behavioral psychology, marketing & technology to nudge audience behavior. Get in touch via email, on Twitter, or Google+: +Ron Evans