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Discounting ticket prices: During the economic downturn, many performing arts organizations have been drastically discounting their ticket prices. Is this a good strategy for getting more people in the house when ticket sales are weak?

It is true that deeply discounted tickets can often drive ticket sales. (For some people, price is not a factor at all and they would not attend even if admission were free). It may well be that people will purchase tickets at a meaningfully reduced rate that they would not purchase at full price. And some people may be willing to take the risk of trying something new and different if the price is right, possibly creating new long term audience members. Most discounted tickets, however, are sold to people who, in “normal” economic times, would have paid full price to see the show.

There are serious concerns to be considered before undertaking or continuing a discount strategy. First of all, arts organizations cannot afford to keep ticket prices low indefinitely. Typically, eared income only accounts for less than half of revenue and in a depressed economy, contributed income sources are also challenged. If people expect that prices will be slashed 10 days, a week, or less before a performance, they will be “trained” to wait for bargains before they purchase tickets, or possibly, not purchase them at all. Arts marketers need to carefully segment their target markets and use price discrimination strategies – in other words: just make special offers available to people who would not be likely to buy without these special offers.