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Capacity utilization and pricing: How can we guarantee that we earn the highest possible revenue on the seats we sell?
Arts marketers often analyze how many seats in each price category in their house have sold for various performances. But for the seating areas that typically sell out – usually the prime seats – do marketers know how many more tickets they could have sold, had more been available? Such information is an important key to pricing strategy and to re-scaling the pricing structure of the house, when possible.
In preparation for their move to a new venue in 2004, managers at Chicago Opera Theater (COT) analyzed ticket sales in various sections of the hall they had performed in for nearly 30 years. They found that the highest price (A level) tickets typically sold out, the middle price (B level seats) either sold poorly or were the last to sell for popular operas, and the lowest price (C level seats) were moderately popular.
For the new, larger venue, COT allotted as many A level seats as were justified by their location relative to the stage, and raised A level prices about 15 percent. To appeal to enthusiastic, non-price sensitive patrons, COT created a new level of A+ seating, nestled within the A section and priced about 20 percent higher than the A seats.
Patrons were informed that a limited number of these seats were available, that these special seats were being offered to subscribers and donors before the general public, and that patrons could “keep” these seats for as many years as they wished to renew.
The response was phenomenal! Some people faxed in their orders the day they received the information. Many former A subscribers upgraded to A+ tickets. Within a month, approximately 80 percent of former subscribers had renewed for the new season, which was 10 months away.
Pricing strategy developed by Joanne Scheff Bernstein in her role as marketing consultant to COT.