The Best Event Pricing Strategy To Help You Sell More Tickets
Pricing can be one of the more stressful parts of organising an event. A smart ticket pricing strategy is essential to driving a profit — but it’s not always easy to determine which approach is right. Many organisers simply price their event somewhere above their costs (“cost-plus” pricing). Others look at similar events and default to that price (“competitive” pricing).
Ultimately, there’s only one way to get customers to put down their credit cards: price your event at the level they’re willing to pay. This is called value-based pricing, and it’s this framework that allows you to maximise your revenues, and — if you manage your costs appropriately — your profits.
Event Pricing Method: How Can I Apply Value-Based Pricing?
There are three key components to value-based pricing: perceived value, the actual price, and the cost per ticket for the event.
- Perceived value is what the customer thinks they will get out of your event. Here it is perception, as much as reality, that drives the transaction.
- The actual price — which can be greater or less than the perceived value — is what the customer actually pays. Ideally, the actual price is as close as possible to the perceived value (without going over).
- The per ticket cost to you for putting on the event.
In the value-based pricing model, your customer is comparing perceived value and price — and you’re using your cost per ticket to determine the baseline price for breaking even.
Put simply, if the customer’s perceived value is higher than your ticket price, then your customer will decide to purchase. And if your cost per ticket is lower than that price, you will make money.
While more complex than cost-based pricing or competition-based pricing, value-based pricing allows you to design the best long-run economic model for your event. When you focus on value-based pricing, your goal shifts. You are now aiming to deliver an event at a price that allows you to earn a return, but still delivers customers a meaningful “surplus” value above the ticket price. When you achieve this, you have both a profitable business and happy customers.
Our ebook will cover in depth the following areas related to value-based pricing:
- How Value-Based Pricing Can Illuminate Large Gaps Between Perceived Value and Cost
- How Value-Based Pricing Can Reveal New Ways to Increase Perceived Value
- How Perceived Value Drives Purchases and How Cost Drives Profitability
How To Price Tickets For an Event
A good place to start is determining how many different types of tickets you’re going to offer your customers. It’s very unlikely that a single price is the right price for everyone. Rather, if you offer a variety of tickets types, you’ll attract customers who perceive more value in a higher priced ticket, while still being able to serve those who perceive less value.
Multiple ticket types can also increase perceived value: they make cheaper tickets look like a better deal, and more expensive tickets look VIP, all in a way that reinforces the benefits of value-based pricing. Further, the ticket types you offer are completely up to your imagination — they can be whatever you want them to be.
What does your customer base find most appealing about your event? It may seem obvious, but avoid assumptions — reach out and speak with your potential customers directly to inform your strategy.
As you talk to customers directly, keep in mind that if you ask them about pricing, you’ll likely hear only one answer: “I want to pay a lower price.” Customer feedback is great for questions about what a customer might want from a VIP experience or why they would attend a beer festival. But steer clear of asking about specific prices. Instead, consider testing pricing out in the wild. If you’re using a ticketing technology partner with full reporting capabilities, you’ll be able to see how different ticket types perform — so you can quickly test your hypothesis. It may take a few iterations of your event to fully understand what customers are willing to pay for, but that experimentation will significantly boost your bottom line.
While it’s not yet commonplace, the use of multiple ticket types is actually very standard among savvy organisers. When Eventbrite looked at the most successful organisers in terms of total sales, the overwhelming majority of them use several ticket types for each event (the average number of ticket types per event was 2.7).
Ticket Pricing Strategy: 4 Common Types of Tickets
Though there was a lot of variety, most of the ticket types could generally be bucketed into 4 groups:
- Regular Tickets – a standard ticket, for example
- General Admission Special Access – gives attendees something extra for a higher price, for example
- VIP, Early Access, or a Backstage Pass Targeted Discounts – gives discounts to all groups that can easy to “prove” membership, for example to students, children, or members of the military
- Group Discounts – offers discounts for bulk purchases, for example, a pack of 6 tickets for one price
As you develop your ticket types, keep value-based pricing in mind. If you understand the value your customer receives from each particular ticket type, you’ll only add ticket types that create higher perceived value (or allow you to serve attendees who perceive less value, without degrading your overall average price). Your ticket prices will match perceived value, which is critical to extracting the full value from an event.
How To Make More Money with Your Event Pricing Strategy
If you have an eye towards profitability, the best ticket types are:
- Those that create a lot of value for your customer, but don’t add that much additional cost to you
- Those that allow you to tap into those with lower perceived value, but in a way that reduces your cost
Now that you’ve spent some time on ticket types, it’s time to think about the price. You’ll learn how to price ticket types, and how you can adjust your pricing over time, in the next section.
Our ebook will cover how to set the initial price for your event and how to adjust that price to reach profitability.