Products need to have the right price to appeal to buyers. It’s equally important that the pricing options, or the ticket options, you offer to your audience are attractive to your audience.
While setting your ticket prices may seem like a simple matter of dividing the cost of your event by the number of tickets and charging a small overhead to make a profit, there are additional factors that you need to consider.
So, how do you come up with ticket options and the prices that prospective attendees can’t refuse?
In this article, we’ll show you how you can land on the perfect ticket price for your next event. We’ll talk about different pricing strategies and explain how to set the initial price of your ticket and then adjust the price of the ticket later on to maximize profits.
Choose Your Pricing Strategy
As an event organizer, you probably already know that developing and implementing an effective pricing strategy is the key to driving ticket sales and maximizing profits. In fact, you might already be setting your event’s ticket price based on a cost-plus or comparative pricing strategy:
Cost Plus Pricing
The cost of your event dictates the base price of your ticket to which you add a markup to generate profit.
The benefit of this pricing strategy is that it’s easy to land on a ticket price that guarantees you’ll make a profit. For instance, if you’ve calculated that your event costs you $125 per head and you’re aiming for a 20% profit margin, you’d set the ticket price at $150.
The problem with this strategy is that it doesn’t take the attendees’ perceived value of your event into account.
Comparative pricing is when you price your event’s ticket at the same price point as other, similar events.
While it may save you some research and time, you can’t be sure that you’ve set a ticket price that’s optimized for your event. There’s always the possibility that you’ll end up charging too little or too much. This could be because of a number of reasons, such as:
- The venue you’ve booked for your event is more expensive than that of your competitors. (Your ticket price is too low.)
- You’ve set up a food station whereas your competitors have hired a private caterer. (Your ticket price is too high.)
- You have promotional sponsors for your event, whereas your competitors don’t (your ticket price might be too high.)
Perceived Value Pricing
Your event’s perceived value is the value prospective attendees associate with your event. It depends on a number of factors including how you’ve positioned the event, your speaker lineup, the attendees’ demographics, or your event venue.
Simply put, your goal is to set your ticket price below the attendees’ perceived value of your event. To do this, you’ll need to determine the cost per head of hosting your event.
In the next section, we’ll take a look at how you can set your ticket’s initial price following the perceived value pricing strategy.
Setting Your Initial Price
To develop and implement an effective pricing strategy for your next event based on perceived value pricing, you’ll need to determine:
- Your event’s cost per head. This is the base price you’ll need to charge each attendee to be able to host your event. The base ticket price doesn’t have a profit margin.
- Average ticket price for similar events. The prices of similar events can act as a marker of perceived value by your attendees. Take a look at other events and calculate the average price point for a similar ticket.
- Elements that increase (or decrease) perceived value. What makes your event unique? Will industry experts be speaking at your events? And what are some of the ways your competitors are increasing their event’s perceived value?
By doing some research, you’ll be able to set an initial ticket price that is higher than the base price of the ticket but lower than the average perceived value. This makes for a compelling, value-based price in the eyes of your prospective attendees.
Adjusting Your Ticket Prices
You could miss out on huge profits if you stick with the same initial ticket price until the day of the event.
One of the best ways to maximize profitability is by adjusting ticket prices as the event draws near or as you complete certain sales milestones. It’s common for event tickets to sell many times their initial price if there are a limited number of seats left and the demand is larger than the supply.
In the next section, we’ll step through seven different pricing strategies that you can use to adjust the ticket price of your next event after you’ve set an initial ticket price.
8 Pricing Strategies to Maximize Ticket Sales
Once you’ve determined the perfect initial ticket price for your event, you can make use of different pricing strategies to adjust your ticket prices as you get closer to the event date.
#1: Early-Bird Pricing
Lowering your ticket prices for a limited time well before your event date will help you get the ball rolling. You can make your first batch of tickets more attractive to prospective attendees by offering them at a discounted price. And the best part is, you’ll be able to set word-of-mouth marketing in motion from the outset. You can also generate some excitement or a sense of urgency for your early-bird tickets by limiting the quantity available for the discounted, early-bird tickets. When the quantity is sold out, or the pre-defined date passes, the early-bird tickets will no longer be available. Attendees will feel the early-bird tickets are scarce and will buy sooner than later. Managing the early-bird tickets is an automated process in Event Espresso.
#2: Timed Batch Ticket Pricing
Hiking the price up a bit at set time intervals prior to the event can actually help drive ticket sales. It makes the tickets seem more desirable to potential attendees as it reflects a rising demand for them. You can apply the same method by using the number of tickets sold as a milestone. The price hike will encourage the attendees to jump onboard sooner. With messages such as: “Hurry Before Prices Go Up!” or “Only 20 Tickets Left – Get Yours Today for $149!” will communicate that prices are rising.
#3: Odd-Even Pricing
Here’s some odd advice: did you know that products with odd number pricing generally perform better than even number pricing? Specifically, prices that end in the number 9 perform better than most. On the other hand, prices that end in even numbers are generally perceived to be of higher quality. Your event’s perceived value can help you determine which approach is right for you.
#4: Bundled Pricing
Adding perks to your event tickets increases their perceived value. For example, you could offer complimentary snacks and drinks, free parking, or goody bags with some of your tickets. Or you could offer two free tickets to attendees that purchase X amount of tickets for your event. This makes your event tickets more attractive due to the increased value for the money.
#5: Tiered Pricing
Tiered pricing is all about making the ticket type that will help you generate desired profits look more attractive to attendees as compared to other ticket types you’re offering. For instance, if you had three ticket types…
- Ticket Type A – $130 – (Ticket + Free Drinks)
- Ticket Type B – $150 – (Ticket + Free Drinks, Parking, and Goody Bag)
- Ticket Type C – $175 – (Ticket + Free Drinks, VIP Parking, VIP Reception, and Goody Bag)
… and you wanted to maximize ticket sales on Ticket Type B, you’d place it between Ticket Type A and Ticket Type C. Keep in mind that each pricing tier should offer the right perceived value (in this case, the perks) to match the ticket price.
#6: The Rule of 100
The Rule of 100 simply states that discounts on tickets under $100 look better when shown as percentages and discounts on tickets over $100 look better when stated as absolute values. Let’s look at an example:
$2 off doesn’t sound as appealing as 20% off on a $10 product. Similarly, Save $200 sounds more appealing than save 20% on a $1000 product. You can use this to make your discounts look more appealing to attendees.
No one likes hidden charges but people do love add-ons.
You can offer perks to attendees who have already purchased a ticket for your event as premium add-ons. This may include anything that would improve the attendees’ event experience such as car parking or better seats, or meetings with celebrities in your industry
Anchoring is a negotiation strategy in which you present the higher priced options first to make the lower priced options seem more reasonable or affordable. Anchoring customers to a higher initial price, with a few lower priced options, is one of the most effective methods in raising the final selling price.
For example, if you want people to think that a price of $25 is a good price, then set your VIP ticket price of $75. Also place the higher priced ticket first among the ticket options, not last. That way attendees see the higher priced ticket first.
With Event Espresso, you can drag-and-drop your ticket prices into any custom order.
Setting your event’s ticket price doesn’t have to be difficult. We shared some tips on how to land on the perfect ticket price and, hopefully, you’re in a good position now to develop and implement a perceived value pricing strategy for your next event.
Once you’ve derived a value-based price for your event ticket, keep adjusting it till the day of your event based on time, value, or sales milestones to maximize profits. And if you’re selling tickets online, be sure to check out Event Espresso’s Printable Tickets add-on that lets you send tickets to your attendees after they’ve registered.
Have you implemented any of the pricing strategies we listed above? Share your experiences in the comments section below!
Want more articles like this? Be sure to check out the rest of our guides and strategies.