TSE provides a ticketing service for clubs, theaters, and festivals which mean we see firsthand how show promotion and ticketing strategy efforts work for their entertainment events. Successful ticketed entertainment events require the development of both a ticketing strategy and a marketing plan. Unfortunately, smaller venues don’t have access to that knowledge base. Often instead, their promotion efforts are focused on the venue itself. They may be focused on a marketing strategy on awareness of the venue as a quality brand. No denying the importance of such a strategy.
Entertainment events require their own marketing plan to be financially successful. It also means the use of a variety of ticketing strategies to maximize the revenue potential of each show.
What we find is that smaller venues use a small number of promotional channels and even fewer ticketing strategies for their entertainment events. Most don’t have the time to become marketing and ticketing experts, and many do not want to invest in outside marketing help for their events.
They see marketing as an expense rather than an investment. If they are making money already with their entertainment events, why should they take on more expenses that could reduce their current profits? If they are scraping by financially, the risk is even greater. Many set ticket prices and keep the same prices throughout the whole sales cycle, even at the door. Others may only increase the ticket price at the door. They see variable ticket pricing like offering discounts for early birds and adjusting ticket prices during the sales cycle as reducing the dollars they can make.
The Three Musts for Successful Entertainment Events
Of course, such concerns are understandable, even if they are mistaken. The best approach to financially successful entertainment events is threefold:
- Setting the initial ticketing prices based on real research of the artist’s box office history and what similar successful events in your market area have charged for tickets.
- Using multiple ticketing strategies that includes variable pricing and different ticketing tiers with options to enhance the fan experience at the event such as VIP tickets with bundled benefits.
- Having a marketing plan that is based on research of the target market and how based to reach them with a value proposition that will cause them to take action and gives them a reason to buy.
Your Goal: Sell Out the Venue with the Highest Ticket Prices That Will Achieve That End
Remember that ticket revenue is not the only source of revenue for most venues. The way to maximize those other revenues is to fill the venues with customers. That’s why your plan is to sell out the performance with the highest ticket prices you can. Understanding that simple concept will require you to think differently about your approach to marketing and ticket tactics for your concerts or other types of entertainment.
Remember that some revenue is better than no revenue. The more people at whatever ticket price they paid that attends an event means the more food and beverage sales you will have.
Airlines have been using variable pricing for years to fill the seats on their planes. We’ve all seen the commercials for sites that provide different prices for the same hotel room, car rental, etc. Recently even major league sport teams have shifted to variable pricing based on which team is playing, day of the week, etc. as they adapt to new ways to maximize revenue.
The entertainment industry has been using variable pricing for years without controversy. That changed when the industry switched to dynamic pricing in recent years where algorithms adjust the price in real time based on demand. Ticket prices for major stars can skyrocket as demand increases for their events. Witness the Bruce Springsteen and Taylor Swift fan backlash to ticket prices.
Often, the performer will take as much as 85 percent of ticket sales with a guaranteed minimum performance fee. That’s called a “backend or door” deal. That means if you don’t sell tickets to at least meet the minimum performance fee, the performer is going to take money you received from food, beverage, and other sales. At the end of the day, you don’t want to lose money, so you want to maximize both revenue from tickets and purchases at the venue during the show.
Setting Entertainment Event Ticket Prices:
Setting realistic ticket prices initially is important. This is your baseline and if done correctly will result in selling out your venue without the need to discount tickets. Here’s a basic approach to setting initial ticket prices.
- Break Even Point: You need to calculate all the expenses involved in holding the event. Of course that means the performance fee and any additional production costs such as a sound technician, sound or lighting enhancements and the added costs imposed by the artist’s technical and hospitality riders. Then there are the indirect costs such as additional staffing, utilities, etc. that the event requires.
Don’t forget to include the marketing budget as you add up all the costs involved. It’s very important to have adequate marketing expenditures in your budget.
- Setting Realistic Ticket Sales Quantity: Just because your venue has a maximum capacity of X number of people, doesn’t mean you should plan to sell that number of tickets. It’s great if you do but be realistic in the size of the audience that will want to attend your event withing the drawing area of the entertainment presented.
This is where many venues stop the process of setting ticket prices. They often add a profit to the numbers and divide the total by the number of ticket sales expected. Often venues set the ticket prices to cover the entertainment costs, especially with backend deals and make their profit through selling food, beverages, etc. It often goes like this. The entertainment costs for performance fees, riders, etc. are $20,000. My capacity is 500, but 400 is a more realistic number. My average ticket price should be $50. That’s it.
Let’s continue with the way the process should work.
Research the Artist’s previous box office draws, average ticket prices, etc. for similar events. Research what similar, well-attended events charged for their tickets. Look for similar venues with similar performers. Look for events in your geographic area or ones like yours in population, demographic makeup, household income, etc. This can be eye-opening. You may find out that the ticket prices based on the first two steps are unrealistic.
- Research Competing Events around your event date. What else is happening the weekend or week of your event? Remember it’s not only about other competing venues. It’s also about the options people have when choosing what they will spend their money on that week or weekend.
One of the events TSE ticketed was a major concert in a relatively rural setting that required the event to draw from a large area and sell thousands of tickets to break even. The problem was that it was set for a Friday night in the Fall in the state of Texas. High school football is big in Texas. Just so happens that all of the area’s high schools had home games the night of the concert. On top of that, it was homecoming for them as well. If this would have been a major metropolitan area, the event might have sold out. But in this mostly rural area the competitive events were a big factor in the concert losing a lot of money.
- Use what you learned in the process to assess your event. Are the ticket prices reasonable. How will your event be perceived in value relative to other things going on. Will you need to adjust your marketing plan? Make the changes you need while you still can.
Remember your goal for any ticketed event.
Sell out the event at the highest ticket prices that will achieve that sell out.
In parts 2 and 3 of this article I will discuss ticketing and marketing strategies and the approach you should use to put on financially successful events.