When done right and well, pricing strategies earn revenue and also create and retain lifelong, loyal patrons. This 3-hour intensive at the Spring 2012 ArtsReach Conference in New York City was led by TRG Arts CEO Rick Lester and his consulting firm colleagues who have helped hundreds of organizations earn millions from demand and pricing strategies TRG pioneered. The intensive is designed for marketing, development and ticketing colleagues to attend together and with other teams. Learn how your role in the process of pricing and demand management can make a positive difference in the way loyal patrons are found, cultivated, and developed over time. Identify the set of facts that tell your organization what’s in demand, and what’s not. Challenge your assumptions about price increases, discount policy, comp distribution, and dynamic pricing. Take home ideas that will build revenues and grow loyal patrons. Session Topics: How a Hot Ticket Launches Lifelong Patronage -What is demand and why manage it? -How do I know my pricing strategy is working? -What’s price got to do with patron relationships? Pricing Fundamentals No Performing Art or Museum Can Live Without -What are the demand factors in my organization? -Who gets the best access at the best price and why? -What’s my job in pricing strategy? Discounts, Comps, Dynamic Pricing: Challenge Your Assumptions -Why are certain discounts always available? Should they be? -How much is too much? -Is dynamic pricing The Answer?

1. Pricing for Lifelong Loyalty
March 18, 2012
Copyright © 2012 TRG Arts
All Rights Reserved

2. National Census of Arts and Culture
Community Databases
D
D
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3. 1,200

4. 25,000,000

5. 60,000,000

6. Patron Behaviors
Assumption Free Management

7. Conventional
Wisdom

8. Pricing and Loyalty
Assumptions
• Higher price makes patrons less sticky
• Higher price create barriers to entry
Facts
• Advocates want the company to financially thrive
• Highest value patrons generally buy “best” seats
• Subscription packages are key to loyalty
• Inventory management guides relevancy
• No one can succeed from sales-only

9. TRG’s Central Strategic Focus
Patron Loyalty
as measured by enhanced
Lifetime Value

10. Measuring Loyalty
Patron Loyalty Index
4%
67%

12. Demand is not static
 Relationship between the number of
performances and total sales
 Demand varies by PLI score
 “New-to-file” households
 Perceived demand causes irrational behavior

13. StubHub: $12,245 StubHub: $22,000
Retail: $175
December 30, 2012
Seat Geek: $500-700
StubHub: $7,995
$6,000

14. Top Published Price: $92
StubHub: Not Available
Vivid Seats.com: “Will meet buyer the night of
the show and escort into venue”

17. “It’s only
worth what you
can get!”

18. Price Models
Prestige Pricing Model
– Quality is highly subjective
– Higher price implies better
product
– Price has a psychological
impact that drives demand
higher than expected.

20. Dynamic Pricing Basics
 Changes to collateral and advertising
 Predetermine trigger points and prices
 Plan for the ticketing system
 Staff training and internal messaging

21. Definitions
Dynamic Pricing Demand Based Pricing
A pricing tactic in which trigger A process that combines data
points guide the manipulation of analysis, scale-of-house, ticket
prices after an event has gone inventory management, pricing
on-sale. Price is the only and other marketing tools to
variable. predict and then manipulate
patron demand. The goal is
maximized per capita sales
revenues.
Perceived
Scarcity
20% 80%

22. Goals of Demand Management
 The perception of success
 Per capita revenues
 Inventory management

23. Scale-of-House
5 3 1 A 116 115 114 113 112 111 110 109 108 107 106 105 104 103
Is your scale optimal?
17 15 13 11 9 7 5 3 1 B 116 115 114 113 112 111 110 109 108 107 106 105 104 103
21 19 17 15 13 11 9 7 5 3 1 C 116 115 114 113 112 111 110 109 108 107 106 105 104 103
23 21 19 17 15 13 11 9 7 5 3 1 D 117 116 115 114 113 112 111 110 109 108 107 106 105 104
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• Does the house
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33 31 29 27 25 23 21 19 17 15 13 11 9 7 5 3 1 R 119 118 117 116 115 114 113 112 111 110 109 108 107 106 105
35 33 31 29 27 25 23 21 19 17 15 13 11 9 7 5 3 1 S 118 117 116 115 114 113 112 111 110 109 108 107 106 105
37 35 33 31 29 27 25 23 21 19 17 15 13 11 9 7 5 3 1 T 119 118 117 116 115 114 113 112 111 110 109 108 107 106 105
37 35 33 31 29 27 25 23 21 19 17 15 13 11 9 7 5 3 1 U 118 117 116 115 114 113 112 111 110 109 108 107 106 105
naturally dress?
37 35 33 31 29 27 25 23 21 19 17 15 13 11 9 7 5 3 1 V 119 118 117 116 115 114 113 112 111 110 109 108 107 106 105
35 33 31 29 27 25 23 21 19 17 15 13 11 9 7 5 3 1 W 120 119 118 117 116 115 114 113 112 111 110 109 108 107 106
A 3 1 35 33 31 29 27 25 23 21 19 17 15 13 11 9 7 5 3 1 X 121 120 119 118 117 116 115 114 113 112 111 110 109 108 107 106
B 3 1 35 33 31 29 27 25 23 21 19 17 15 13 11 9 7 5 3 1 Y 120 119 118 117 116 115 114 113 112 111 110 109 108 107 106
C 5 3 1 33 31 29 27 25 23 21 19 17 15 13 11 9 7 5 3 1 Z 121 120 119 118 117 116 115 114 113 112 111 110 109 108 107 106
D 5 3 1 33 31 29 27 25 23 21 19 17 15 13 11 9 7 5 3 1 AA 120 119 118 117 116 115 114 113 112 111 110 109 108 107 106
E 7 5 3 1 31 29 27 25 23 21 19 17 15 13 11 9 7 5 3 1 BB 121 120 119 118 117 116 115 114 113 112 111 110 109 108 107 106
F 7 5 3 1 29 27 25 23 21 19 17 15 13 11 9 7 5 3 1 CC 120 119 118 117 116 115 114 113 112 111 110 109 108 107 106
• Does performance
G 7 5 3 1
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J 9 7 5 3 1 Grand Tier Boxes
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L 2 1 5 6 7 8 4 5 6 3 4 4 5 6 4 5 6 4 5 6 3 4 5 6 7 8 3 4 4
P O N M L K J H G F
success impact per
Dress Circle Boxes
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X W V U T S R P O N M L K
Dress Circle
capita revenues?
23 21 19 17 15 13 11 9 7 5 3 1 A 127 125 123 121 119 117 115 113 111 109 107 105 103 101 A 102 104 106 108
27 25 23 21 19 17 15 13 11 9 7 5 3 1 B ## 129 127 125 123 121 119 117 115 113 111 109 107 105 103 101 B 102 104 106 108 110
27 25 23 21 19 17 15 13 11 9 7 5 3 1 C ## 129 127 125 123 121 119 117 115 113 111 109 107 105 103 101 C 102 104 106 108 110
29 27 25 23 21 19 17 15 13 11 9 7 5 3 1 D ## 129 127 125 123 121 119 117 115 113 111 109 107 105 103 101 D 102 104 106 108 110
31 29 27 25 23 21 19 17 15 13 11 9 7 5 3 1 E ## 129 127 125 123 121 119 117 115 113 111 109 107 105 103 101 E 102 104 106 108 110
47 45 43 41 39 37 35 33 31 29 27 25 F 17 15 13 11 9 7 5 3 1 F 112 111 Grand Circle 102 101
• Are areas selling out?
47 45 43 41 39 37 35 33 31 29 27 25 G 17 15 13 11 9 7 5 3 1 G 112 111 102 101
51 49 47 45 43 41 39 37 35 33 31 29 27 25 H 21 19 17 15 13 11 9 7 5 3 1 H 112 111 110 103 102 101
51 49 47 45 43 41 39 37 35 33 31 29 27 25 J 21 19 17 15 13 11 9 7 5 3 1 J 112 111 110 109 108 107 106 105 104 103 102 101
51 49 47 45 43 41 39 37 35 33 31 29 27 25 K 21 19 17 15 13 11 9 7 5 3 1 K 112 111 110 109 108 107 106 105 104 103 102 101
51 49 47 45 43 41 39 37 35 33 31 29 27 25 L 21 19 17 15 13 11 9 7 5 3 1 L 112 111 110 109 108 107 106 105 104 103 102 101
51 49 47 45 43 41 39 37 35 33 31 29 27 25 M 21 19 17 15 13 11 9 7 5 3 1 M 112 111 110 109 108 107 106 105 104 103 102 101
53 51 49 47 45 43 41 39 37 35 33 31 29 27 25 N 21 19 17 15 13 11 9 7 5 3 1 N 112 111 110 109 108 107 106 105 104 103 102 101
O Terrace Circle
47 45 43 41 39 37 35 33 31 29 27 25 P 17 15 13 11 9 7 5 3 1 O 109 108 107 106 105 104 103 102 101
47 45 43 41 39 37 35 33 31 29 27 25 R 17 15 13 11 9 7 5 3 1 P 109 108 107 106 105 104 103 102 101
51 49 47 45 43 41 39 37 35 33 31 29 27 25 S 21 19 17 15 13 11 9 7 5 3 1 R 112 111 110 109 108 107 106 105 104 103 102 101
51 49 47 45 43 41 39 37 35 33 31 29 27 25 T 21 19 17 15 13 11 9 7 5 3 1 S 112 111 110 109 108 107 106 105 104 103 102 101
51 49 47 45 43 41 39 37 35 33 31 29 27 25 U 21 19 17 15 13 11 9 7 5 3 1 T 112 111 110 109 108 107 106 105 104 103 102 101

24. So what drives ticket prices up?
 Specific performances
 “BEST” seat locations
 Cheapest ticket locations

25. “The hottest ticket in town is the
ticket no one believes they can get”

26. Hot Tickets Drive:
Renewals
New Subscriber Acquisition
Single Tickets
Donations
Sponsorship
Irrational Behavior
Everything!

27. Hot Tickets Drive:
Renewals
New Subscriber Acquisition
Single Tickets
Donations
Sponsorship
Irrational Behavior
Everything!

32. Scale-of-House
• Basic tool for building a plan Box A Left
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Box E Left S 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45
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• Extremely powerful
Box A Left
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– Managing per capita revenues
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– Directing audiences
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– Blueprint for loyalty programs