||| October 31, 2009 by William Rogers

NAMP: The Pricing Institute Preconference - sales and discount analysis

Today’s the day. The National Arts Marketing Project Conference is go! If yesterday’s preconference with Tim Baker and Steven Roth of The Pricing Institute was any indication, this promises to be a truly remarkable experience.

I have so much to share from the conversation about pricing. My head still feels like it was kicked in by a calculator. Tim and Steven led our group through a few exercises to show just how simple and effective “revenue management” (you will hear that term again) can be. With a few simple changes to the price of your membership, the scale of your house, or the packages you offer, organizations can see a dramatic impact on the bottom line.

Have you ever heard of “value fences?” This is a term near and dear to The Pricing Institute.

Have you ever heard of “value fences?” This is a term near and dear to The Pricing Institute. Essentially the concept is about unlocking additional value in your product by utilizing pricing and institutional variables to drive revenue. For instance: for the next 48 hours subscribers are offered the opportunity to buy as many additional seats as they would like for $25 (subject to availability) to a performance that usually sells poorly. This is a simple example, but you get the idea. It is about building a construct by which to manage your supply and demand. It is also about managing the value of your ticket by controlling discounting in order to move customers and discounts into desired, off-peak performances or nights.

I’ll be bringing you much more from The Pricing Institute conversation, but you will quickly realize that being able to react to your organization’s situation is about starting with the facts. Good, clean data. This may be the most demanding step for many of our organizations with less than perfect patron software. I will leave you with this quick checklist of information you will want to gather to conduct an accurate sales and discounting analysis. Pull this information together and see what it tells you. Later, I will share some ideas about what can be done with this information as well as a few examples of effective value fencing and revenue management ideas.

Sales Analysis (by performance)

Physical Capacity
Ticket Sales
Complimentary tickets (% ticket sold)
Financial capacity
Gross income
- % financial capacity achieved
- Average price (financial capacity / physical capacity)
- Average yield (Gross income / tickets sold
- Discount ((price – Yield) / price) * 100

Discount Analysis