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Posts Tagged ‘gross potential’

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Greetings! It’s been a hectic few months in my world between getting temporarily displaced by Hurricane Sandy, along with a writing project heating up, while at the same time earning a promotion! So, I’m a bit behind on my posting.

But I’m back!

And so are dynamic pricing and heat maps. Actually, dynamic pricing and heat maps never left, and, in fact, are likely here to stay, as more and more presenters and producers begin to rely on these capabilities to sell as much of their inventory as possible, and maximize their GP.

I’ve discussed dynamic pricing and heat maps in previous posts. You can check those posts out here, and here. What’s caused me to think about dynamic pricing and heat maps once again is that I’ve become much more immersed in ticket pricing in my new position, and it is becoming clear how dynamic pricing and heat-mapping can be useful tools to help presenters re-think manifests, figure out the smartest way to scale houses, decide when to put certain groupings of tickets on sale, etc.

I recently enjoyed an informative webinar on dynamic pricing, heat maps and patron loyalty that was sponsored by TRG Arts. TRG Arts is a company that provides heat mapping and marketing support culminating in data that helps their clients make more informed decisions about ways to increase revenues and understand who attends their theaters, how to keep them, and how to attract new subscribers.

No need to be a client of TRG to benefit from some of their wisdom. I recommend that you check out the webinar I link to above, as well as subscribe to their blog, Analysis from TRG to keep up on the latest in these areas, and perhaps pick up a few ideas!

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Little by little, Presenters are beginning to adopt “dynamic pricing.” Dynamic pricing allows ticket prices to be fluid based on supply and demand. These days, most theaters still have set ticket prices. If you hypothetically buy an orchestra ticket today for MILLION DOLLAR QUARTET in Pittsburgh, and your friend goes up to the box office during the engagement and buys the seat next to yours the day after the show receives some great press that causes increased demand, the price she pays for her ticket will still be the same as what you paid. In the dynamic pricing scenario, if the great press causes an increase in good word of mouth and a hot demand for tickets, your friend would have to pay more for that same ticket.

And you would have gotten a bargain.

The main challenge with regard to dynamic pricing, though, as I understand it, is getting a handle on the Gross Potential. With fixed ticket prices, you can easily calculate a GP, but with dynamic pricing, since prices could go up or down, and you don’t know if sales will be slack or robust, it seems impossible to accurately determine the maximum gross that can be achieved on an engagement.

Here is a Los Angeles Times article from a few months ago that talks about dynamic pricing and how presenters are considering it more and more to encourage people to buy tickets early, and as a potential tool to build their subscription bases.

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