Joanne Bernstein discusses how to set ticket prices, ways to upsell tickets, the best ways to offer discounts, and how to add value to tickets. She also explains the best ways to increase your audience attendance with the birds of a feather principle.
Joanne is an educator, author, consultant, speaker and manager for non-profit organizations, primarily in the field of arts and culture management and marketing. Joanne is the author of Standing Room Only: Insights for Engaging Performing Arts Audiences which is a comprehensive sourcebook with up-to-date marketing strategies and techniques for theater, music, dance, and opera organizations.
WILLIAM: I’m excited to introduce you to Joanne Bernstein, who is an educator, author, consultant, speaker, and manager for non-profit organizations, primarily in the field of Arts and Culture Management and Marketing.
Joanne is the author of Standing Room Only: Insights for Engaging Performing Arts Audiences, which is a comprehensive source book with up-to-date marketing strategies and techniques for theatre, music, dance, and opera organizations.
In this episode, Joanne discusses how to set ticket prices, ways to upsell tickets, the best ways to offer discounts, and how to add value to tickets. She also explains the best ways to increase your audience attendance with the “birds of a feather” principle.
Let’s get into it.
Hello Joanne. Thanks for being on the show.
JOANNE: Thanks so much for having me, William.
WILLIAM: To start off, can you tell us a little bit about yourself?
JOANNE: Sure. I’m the author of three comprehensive books on marketing the Arts, specifically the performing arts. The most recent one was titled Standing Room Only: Marketing Insights for Engaging Performing Arts Audiences, which was published in 2014. My books have been translated into many other languages and are used worldwide.
I also taught Arts Management at the Northwestern University Business School, both the graduate and the undergraduate schools, for 20 years, and I speak internationally on Arts Marketing. I encourage anyone who’s interested in knowing about my speaking and all of my consulting work to check out my website which is ArtsMarketingInsights.com.
I also was executive director of a small symphony orchestra and of a dance company during their transitional times. I increased both subscriptions and single-ticket sales at the symphony 40% in one season.
Now, I’m mostly consulting with individual arts organizations on topics as broad as strategic planning, and board and organizational issues, to specific topics like communication strategies, ticket pricing, market research, and so on. I’m happy to work on projects large and small.
WILLIAM: Now, let’s chat a bit about marketing. A lot of people in theatres struggle with finding the right ticket prices for their shows. Can you discuss with us how ticket prices should be set?
JOANNE: Sure. I’d like to start out by sharing with you some of the basic principles of ticket pricing to set the stage for this, so to speak.
First, there’s competition-oriented pricing. Most often, an organization will try to keep its prices at the average as charged by its own industry group, such as community theatres, or professional regional theatres, and so on.
Second is image pricing. Organizations can capitalize on image differences in pricing their products because patrons will pay a higher price for a particular play at an established, well-respected theatre than for the same play at a new start-up company. So, you want to make sure that your prices and your image are in line with one another.
And if a theatre extends a run of a popular play, it may raise its prices because the production has gained the imprimatur of quality and broad acceptance. The most obvious recent example that most of us wish we could emulate is “Hamilton,” where demand greatly exceeds available supply.
As a personal example, last September, I was fortunate enough to see Hamilton in New York City and I bought tickets in July of 2015 at Ticketmaster online, main floor center, for $140 each for a performance two months later. And then, shortly after the performance, the prices started soaring and everybody wanted to see the show, so I got extremely lucky. I can’t think of any theatre anywhere else that has such “problems.”
Another principle for pricing tickets, which is very important, is higher highs and lower lows. This strategy helps achieve both revenue maximization and audience size maximization.
The idea is to set prices as high as the market will bear for people eager to have a premium experience and offer low priced tickets for those who cannot attend otherwise, especially in non-profits, where this is often part of their mission. And, offer a range of prices in-between, depending on the size and configuration of the house and on audience demand. This is called scaling the house.
How this is done really depends on the organization, the size of the hall, and whether the hall is even large enough for it to have different ticket prices. Sometimes prices can only be varied according to the day of the week or other specific factors about a performance that there are so many complex factors. It’s probably too much for me to go into right now.
WILLIAM: Could you just give us a small example? If you have a hundred seat theatre, how you might go about scaling that?
JOANNE: Well, one thing that some organizations do in small halls like that, it also works for upselling tickets. I worked with a theatre that had general admission in a small hall and they offered people an opportunity to reserve a seat in the front rows, where the seats brought in were more comfortable, and they were reserved with the patrons’ names on them, so that the people didn’t have to arrive at half an hour before the show. When the door is opened, they could stay and linger over a cup of coffee nearby and be guaranteed really good seats. And people were willing to pay extra for that, whether it was for a single ticket or for season subscription to do that.
WILLIAM: So, that would be basically making your first row, your second row more expensive and guarantee those spots and then, maybe, the rest of the hall could be general admission.
JOANNE: Exactly. And what happened at this company was they offered it in the first two rows the first season and then, as it became more popular, they added more rows to it because they were able to upsell more seats that way.
WILLIAM: So possibly the third or fourth row or maybe the fifth or sixth, even, just depending on how big that would be and then, the price would maybe be adjusted accordingly.
JOANNE: Exactly. And it also depends on where the best seats are deemed to be in the hall. For some things, like for a magic show, I would think that the best seats are right up close. But, at concert halls, the box seats are usually pretty far back into the middle of the hall because that’s where the acoustics are best.
WILLIAM: We have a client, Joe Coover, who does a magic show, and he put the last row in his house a bit cheaper than the rest of the seats and called it the “don’t pick me” section and I thought that was quite clever.
JOANNE: That’s very much in tune with what he does and what his audience would respond to, which is an important key here. You always want to do what’s best for your organization and your current or potential patrons. So, that’s right on.
WILLIAM: And then, you said that you should make it possibly affordable for different types of people. So, do you recommend having senior tickets, student tickets and having those every single night or limiting what nights those tickets are available or how would you go about setting prices for different demographics?
JOANNE: Again, it depends on the organization. If you have general admission, if you can’t really scale out the house into different pricing sections, then I suggest offering senior tickets just for the least popular events and typically, for matinees, because that’s when many seniors like to attend. But, most seniors actually have the most discretionary time and income of any arts attenders. That’s been found over and over again in audience research. So it’s a mistake to, across the board, give seniors a discount.
And for the larger organizations that have the ability to scale their house, offer discounted seating for seniors in the less desirable sections for any performance, if that works. And for students, I suggest offering the discounts for any performance that they can attend, but according to availability and only in the back of the hall.
Again, if it’s just general admission, maybe you’d want to reserve a separate section for students or hold back just a certain number of tickets for student tickets.
Again, it really depends on how ticket sales are going. If the show isn’t popular, then promote this as much as possible. If you’re able to sell a lot of tickets for the show at the regular price, then limit the number of student or senior tickets that are available. But of course, if it’s a non-profit and your mission is to bring in as many students, for example, as possible, then you may want to be sure to guarantee that you’re providing tickets for them.
WILLIAM: And I guess the main goal with scaling a theatre, would be being able to make as much money possible off the seats that you have available.
JOANNE: Correct. And sometimes, that means lowering prices on seats. So, that involves capacity utilization pricing, which is a fancy way of saying that you price your tickets according to anticipated demand based on past ticket sales. And to do this, you do a deep analysis of ticket sales over several shows and historically, for two to three years to get good data.
There’s an extended example of this in my second book, that’s marketing insights at the Chicago Opera Theater. You want to see what seats have sold, how often, and at what price, for various shows, various days of the week, according to the popularity of the shows and the seat locations.
So, you can pretty much determine which seats are well priced and which seats you have the opportunity to raise the prices. In other words, those seats are already selling extremely well at the prices that you’re selling them for. So, there’s probably an opportunity to raise the prices. And for the seats that are not selling as well as you’d like, lower the prices to make them more desirable.
WILLIAM: Now, as far as raising or lowering prices, can you discuss the importance of selling tickets that reflect the quality of the production?
JOANNE: The most important aspect of pricing is the Price-Value Equation. You set prices according to what they’re worth and something is worth what people are willing to pay. So, it’s the purchaser who determines the value based on many inputs–reviews, word-of-mouth, fame of show, fame of performers, the theatre itself, or how much they just want to see a particular show. So, this goes back to image pricing.
And generally, prices are set according to the quality of the organization and its product offerings as a whole, not according to individual productions, except for extremely rare, wonderful cases such as the case of Hamilton.
But what people care more about than price is value. If you price a ticket too cheaply, then people wander about the nature of the experience they will have. Price is a strong indicator of what people should expect from a product or service.
I consulted some years ago with a symphony orchestra in a small city in central Illinois. They had 60 to 70 musicians on the stage for each concert and they were charging only $15 a ticket, and they were afraid to raise their prices. So I asked, “What are people supposed to think about the value of having 70 musicians on stage for a live symphony concert and you’re charging the same price as a movie ticket?”
I encouraged them to increase their prices, but to do so over time. They can’t make big jumps all at once because, then, you’ll get some push back. But if people realize that they’re only paying the same price as they pay for a movie ticket, then they’re not valuing the concert in the way that it rightfully should be valued.
WILLIAM: So, you said raise ticket prices over time. You’re saying if you’re selling tickets for, say, $10 now, don’t jump at up to $25 because you’re going to get some push back. What would be a good time period to slowly raise those up? And what kind of incremental would you suggest raising them to, like $12, $15, $20, over six months, a year, two years? How does something like that look?
JOANNE: Well, it’s complicated, which is not the answer you’re looking for, and the amount of years, again, depends on the organization and its patrons and what the current pricing situation is.
WILLIAM: So what did the symphony do?
JOANNE: Okay. I’ve had occasions where I would write a letter on behalf of the director of the organization and over that person’s signature, saying to patrons that we haven’t had a price increase in a very long time and our costs are extremely high, and look at all the great benefits that we’re offering you giving a live program with 70 musicians on stage, and we’re going to increase our ticket prices and we hope and expect that you will value the experience at the price that we’re now charging, which is the price of a movie ticket and two boxes of popcorn instead of just the movie ticket.
And if you frame it in the right way, you can do a pretty sizable jump at once, which might be better than increasing a few dollars a year every year so the people don’t say, “Oh, they keep increasing prices so much all the time.”
WILLIAM: So, what happened when you raised the prices with the symphony?
JOANNE: They did with just a few dollars and it worked just fine. They got no push back whatsoever and then, they kind of backed off and didn’t get the tickets nearly as high as I thought that they probably could.
People in our industry often think that patrons or potential patrons aren’t coming because ticket prices are too high. And, it’s usually other reasons. Most importantly, the real value of the program is in the experience itself and I think marketers need to do a much better job of bringing alive the experience people have with their live event.
As I said before, what really matters to people is value, not price. And people won’t realize the value to expect if they don’t know about it. We need to do a better job of communicating the true value of this art, of the experience, of the uniqueness of the live event. And we need to stop talking in jargon that means nothing to most patrons and stop focusing the conversation on price.
WILLIAM: So, how could you show that value to your patrons or how do you add that value, so if you’re charging more for tickets that they feel like they’re getting that worth from that price?
JOANNE: That’s probably the nitty-gritty of the whole thing. It’s the hardest thing, which is why organizations tend to focus on price because that’s easier than bringing alive the experience for people. What this experience going to be like for me? And what it would be like for me is different than what it’s going to be like from pretty much any other person. For example, if I heard Beethoven’s 5th Symphony performed 20 times, hearing it again live is going to be very different for me than the person who’s coming the first time. So, the messages need to be different for different people.
That’s just one example of why it’s very complicated, but the keyword here is “relevance.” You need to be able to create messages that are relevant to the people you’re targeting. Sometimes, that allows you to do general marketing. Sometimes it means needing to segment out your audiences and position different messages to different audience groups.
WILLIAM: So, could you give us maybe an example of a way to add value to a ticket price, maybe that you can say in your promotional material or maybe on emails that you send out that might show the patron what they’re getting for that ticket?
JOANNE: Okay. So the most important thing is the experience itself, as I just said, and to explain this in a way that’s really going to have meaning and value for people. And nowadays, it’s somewhat easier to do it than it used to be when I first started in this business because we can put videos or short clips and audios on our websites, on our Facebook pages to give people a little bit of the experience. We can have interviews with performers and designers and things that really do help to bring alive the experience and create excitement for people.
There are also tangible benefits that we can offer that add value to the ticket price such as, as I said before, better seats, reserved seats, something like more convenient parking, free valet parking, a free drink in a special room during the intermission, a little gift like special candy and patron seats with a note to make them feel special.
This has to be whatever makes sense for the specific organization and for its patrons. So, for some organizations, parking isn’t an issue at all. People can usually find parking on the street or in a lot nearby and there’s no reason for the organization to even focus on that.
At the other extreme is the venue like the Ravinia Festival near me, in Highland Park, Illinois, where I’m fortunate enough to be able to go to their concerts frequently.
And parking is such an issue around the festival for thousands of people who are attracted to their concerts, that for a major donation, people are given access to a parking lot right adjacent to the– not even the main entrance, an entrance that’s closer to their pavilion where the performances are. It’s called the Opus lot and they get a parking permit to park in that lot, but it requires a major donation to be able to park there. And that’s something that people really value and they make a donation so they can get to the parking lot very often.
So, there are all kinds of extremes of this, but the key is each organization has to gear the benefits to what makes sense for their audience and for their organization’s needs.
WILLIAM: We touched on this briefly, can you talk about ways that theatres can upsell their tickets?
JOANNE: Sure. As I said before, the principle of higher highs and lower lows is probably the best way to raise ticket prices. You raise the prices on the best seats for people who are not price sensitive and want the best possible seats. And either don’t raise them or raise them less than the seats that are further back or might have an obstructed view.
So if you go from $10 to $12 for your top ticket or $20 to $25, most people aren’t even going to notice. And if they do notice, it won’t keep them from attending. And the opposite is also true if there are seats that are not selling or not selling well. If you significantly lower the prices, you’ll attract more people to buy tickets in those seats and you’ll increase your revenue by selling seats that wouldn’t have sold otherwise.
So, the way to do this is, as I said before, to start by doing a capacity utilization analysis for the ticket sales for individual seats, performance days and times in separate shows over the past year or two, and determine where the most likely opportunities for increasing or decreasing prices.
In halls that are scaled with different price sections, there’s often an opportunity to rescale the hall. So let’s say, for example, you have three sections with prices A, B and C, with A being the most expensive. You can increase the number of seats in the sections that sell the best and typically, it’s the best seats that sell first, contrary to the opinion of many concerned marketers.
Many managers say, “If I increase my prices, people won’t pay and I have to keep low prices.” But, in all of my research, the seats that sell the best are the most expensive seats.
The ones that sell second best are the cheapest seats, which are bought by students and people who really want to be there but can’t afford the higher prices. And the middle priced seats are typically the hardest to sell.
So another option to consider is to increase or decrease the number of seats in pricing sections according to demand as the tickets were selling. For example, let’s say you’re running out of A-priced seats. Instead of offering people B-priced seats, you can add another row or two from the B section to the more sought after A section.
So in other words, when you’re selling the tickets, don’t sell the first couple of B rows as a B-priced section. Wait and see if you’re selling out the A seats, then you can add rows from the B section to the A section. And on the other hand, if the B’s are selling well and the A’s aren’t, then you can increase the size of the B section.
WILLIAM: Now would this be over the course of a single show run, like over the course of three weeks that you’re going to be doing this? Is this something that every single show you’re going to be doing this for or is this over maybe a few years that you’re going to see what’s happening with your seating and with your ticket prices and then you’re going to change that accordingly? What kind of time frame would you be doing this in?
JOANNE: I suggest doing it both ways. If you find that across the board, with all of your different productions, you end up needing more A seats and fewer B seats or vice versa, then do it as a general policy, but if you can also do it on a per show basis, if you have the flexibility to do that, that would be great. So in other words, sell the first few rows of the A section first and the back few rows of the B section first. So then, you have flexibility in between the two sections to alter the prices as it comes up.
And it might be just one particular show that has that kind of demand. I worked with a large theatre in Tokyo where their problem was that people only wanted the top priced seats and weren’t willing to pay to sit in the B section. And they weren’t going to come unless they could have A-priced seats. So, I told them, I suggested that they use this strategy and they did. And people were happy to buy what had been the B seats but were now called A seats and were priced higher as long as they pay the top price.
WILLIAM: That’s really counterintuitive.
JOANNE: Yeah, but it tells you a lot about human behavior, doesn’t it?
WILLIAM: Yeah. If you were to ask me, “What do you think happened?” I wouldn’t think that just by raising the ticket prices in that section, that they would sell out of that section.
JOANNE: It depends on your own clientele. It works in some places and not in another. Some people might be appalled by it, but for the most part, people don’t pay attention. “Oh, the B section used to start with row K and now it’s starting with row Q, so I’m overpaying for these tickets now that you made them an A section.” It just doesn’t happen. People don’t pay attention to that.
And I’ve also seen it, aside from Tokyo, I’ve seen it happen right in the suburbs of Chicago, too, in a theatre where they used this policy all the time and it works just fine.
WILLIAM: I guess the real lesson to be learned here is to always keep experimenting with your ticket prices and the message that you’re sending to your patrons as far as what your production is worth and the value that you’re giving them.
JOANNE: Yes, right. Another aspect of this is dynamic pricing, which has become more and more popular in the last 10 years or so, which basically emulates what the airlines do. You might go to a theatre’s website every day and get a different price for the same seats according to demand. And that ticket price may be going up or down according to demand. It’s usually up, just like with the airlines.
And a lot of theatres are realizing a lot of additional revenue using dynamic pricing strategies. And the bigger ones can afford some very fancy software that automatically evaluates the ticket sales and there’s an algorithm built into the software so that if tickets sales increase by 5% or 5% more tickets are sold then the prices will go up $3, or $5, or $15, whatever it may be, and that keeps happening over the run of the show.
So I know at one major regional theatre in downtown Chicago, the ticket price might start at $70 and for a very popular show, by the time the show is opened, the reviews are out, most of the tickets have sold because they have a large subscription base, the ticket prices may be double or more, and people are willing to pay it.
WILLIAM: Wow! That’s an excellent idea. And even if you don’t have fancy software or a large budget, you could do that manually just by watching the ticket prices.
JOANNE: Most companies do it manually. They have somebody who checks every day, sometimes more than every day and if it’s a small company that doesn’t sell a lot, less frequently. But somebody should be looking it over regularly and making determinations as to whether ticket prices should be raised or lowered and for which performances.
WILLIAM: Now, how do you advertise? I know a lot of production companies, they’ll put on their posters or their marketing material–tickets $10, tickets $20, tickets $30–do you now put a ranged tickets between $10 and $30, so that people will know kind of the range of the price point or how do you market that when your price is always changing?
JOANNE: That’s a good question. Especially now when tickets are available on websites and ticket prices can be changed all the time, unlike the days where we publish the brochure and the ticket prices were locked in pretty much for a whole season.
What a lot of organizations will do is say, “Tickets as low as $15.” So, that’s a starting point and they don’t give an upper limit. And then, if you come in with the cheaper ticket, nobody is going to complain.
WILLIAM: Okay. That makes sense. So, don’t put necessarily your entire range, just say what the lowest ticket price is going to be.
JOANNE: Correct. Unless you make a commitment, as some organizations do, that they’re not going to sell their tickets for more than a certain amount, then you can say, “Ticket prices $15 to $60.” But, I’m not sure that even then, they should lock it in because there might be some special occasion, some openings, some events that have other benefits attached to them where the ticket prices might go higher, so it doesn’t make sense to lock it in.
WILLIAM: To wrap this up, can you tell us one marketing technique that event producers can do today to start increasing their ticket sales?
JOANNE: Market research has shown repeatedly that the best source for stimulating interest in a show is word of mouth, word of mouth from friends, family, opinion leaders, and so on. So, the principle for marketers to apply is the “birds of a feather” principle. People who enjoy theatre tend to know other people who will enjoy attending also.
I’ve had great success helping theatres, chamber music groups, and dance companies build their audiences by encouraging current attenders to bring others. There are several ways to do this. One way that I use regularly is to offer a free guest ticket to each subscriber who purchases a group of tickets to three, four, or five shows. This could also be done with single ticket buyers who buy tickets repeatedly, like a punch card at Starbucks or something, like 10 cups of coffee, get a free cup.
It depends on what works best for the organization. And then, the organization must make sure to obtain the contact information for each guest who attends. This provides a wonderful social opportunity for the subscriber or the repeated attender. And it’s mutually beneficial for both the attender and for the organization.
Also, it’s good to encourage patrons to buy tickets or subscriptions for others–for holiday gifts, graduations, weddings, and other occasions. It’s the gift that keeps on giving all year long. You give these purchasers one complimentary ticket for each four or five tickets they buy. You can promote this offer in the program book or an insert in the program, in email messages and the organization’s website and so on. I helped a small chamber music group double the size of its audience with this approach.
WILLIAM: So, I guess the goal here is to get as many people into your theatre as possible and that’s not going to cost anything for you as a theatre.
JOANNE: Exactly. As long as you have excess capacity, which means empty seats, the best thing to do is to give them away to get people to come in and try it. But, you don’t want to randomly give away tickets. It has to be very purposeful. So, you can give away tickets as a benefit to your frequent attenders to bring in other people and then you collect the information on these guests who come in so that you can contact them directly.
WILLIAM: That’s an excellent idea. Thanks for sharing that.
JOANNE: My pleasure.
WILLIAM: And we really appreciate you coming on the show. Can you talk about how we can find out about you and where we can pick up your books?
JOANNE: The best place to find out about me is on my website artsmarketinginsights.com and my books are available on Amazon.com or through links on my website to Amazon. And you can also sign up to receive notices of my blog on my website. It’s all right there.
WILLIAM: Okay, great. We will add that to the show notes.
JOANNE: Thanks very much, William. I appreciate it.
WILLIAM: And thanks for coming on the show, Joanne.
JOANNE: My pleasure.
WILLIAM: Alright. We’ll talk to you soon.
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