The VooDoo Science of PricingNovember 12, 2011

Chad Bauman, Director of Communications

Scale of Hall and Price Maps

How would you scale this house?

Subscribers

All Patrons

Let the data do the driving…

New Scale of House PlanKreeger Theater

Fichandler Stage Heat Maps

All Patrons

Subscribers

New Scale of House PlanFichandler Stage

Simplified Selling• Reduced pricing scenarios by weekend and weekday

• Offered discount for preview subscriptions, but not preview single tickets

Created a new entry-level, more accessible price point.• The number of discounted single tickets indicated the need for a

lower-priced option.

• An entry-level price point attracted new single ticket buyers.

• Collapsed price points A & B into price point A. Difference was only $5 apart. Created a new B price that is materially different and based on previous year’s average ticket price

Introduced Premium Price Section (A+)• can be turned on and off based on demand

• offered premium subscription prices only for new subscribers, grandfathered in current subscribers and raised their prices over the course of 2 years

Pricing Strategies

New Pricing Structure

Dynamic Pricing and Single Tickets

Single Ticket Strategies• When shows go on sale, hold back the “holds” section so the

theater dresses itself.

• Never publish prices or scale of hall plans

• To address the visible holes in the halls for many performances we built the B priced section. For high demand shows, single tickets will go on sale without B prices and then we will adjust if needed.

Dynamic Pricing• Evaluate the houses as late into the subscription campaign as

possible before single tickets go on sale

• Develop plan on initial offering price and seating categories

• Increase price based upon percent paid capacity – 60%, 70%, 80%, 90%

• Accessibility – average ticket price and avenues for access

• Impact on staff and artists

• Customer service and educating audiences

• Affect on subscriptions

• The most expensive seats in the house will be in surprising locations

Dynamic Pricing and Single Tickets

Discounting Strategies• Two reasons to provide discounts: 1)To encourage and reward

particular behaviors, and 2) To provide access to targeted demographics

• Rush tickets and the introduction of the Pay-Your-Age program

• Pay-What-You-Can performances

• Ninja discounting and the use of mass discounting, third party vendors

• Marketers are masters of perception, not reality (perception of success even in difficult times)

• Complimentary tickets (and why I hate them)

• Devalue the product

• No show rate

• Blood in the water

• Box office nightmares

• Suggested uses for complimentary tickets

Subscription Tactics•For renewals, only the A+ and A price level offered initially. B price subscribers offered A seats for a minimal increase in price. (goal: eliminate B price subscriptions)

•B level subscriptions only used during new acquisition to provide subscription options other than buying less product.

•Switched from discounting subscription by dollars off to percentages off, which provided a much easier marketing message

•Discounted subscriptions so we could use the word “free” to promote packages

•Cradle was kept off subscription and used to drive sales for larger packages (every tongue confess)

Subscription Tactics•Focused on Retention and Customer Service

•Eliminated Advertising, but Increased Direct Mail and Telemarketing

•Ceased Printing a Season Brochure

•Delayed the Introduction of Smaller Packages and Concentrated on Upgrade Strategies

•Relentlessly Dedicated to Monitoring ROI

•Box Office rebranded to a Sales Office

Chad M. BaumanDirector of Communications

Arena Stage at the Mead Center for American Theatercbauman@arenastage.org

202-600-4050

Arts Marketing Blog: www.arts-marketing.blogspot.com

What the heck was he talking about?