Everyone wants to price their products to maximize revenue, and Broadway is no exception. Airline companies have led the charge on dynamic pricing for decades. Disney theme parks increase prices on busy days to visit. Uber makes a killing with their “surge” pricing. Dynamic pricing is so mainstream these days, even the flower shop in a local neighborhood street is doing it—the photo below was taken on Valentine’s Day. Those tulips were only $5 on February 15th.
Dynamic pricing for Broadway is the art of changing prices for individual performances and parts of house based on demand. Audiences may hate “surge” fares, but they are starting to appreciate that, just like an airline, they might pay a different price than their neighbor based on when the tickets were purchased.
Here are five things you should have for a successful dynamic pricing strategy on your Broadway show:
- Demand for Your Show – You can have a dynamic pricing strategy from the outset, but be prepared to adapt your strategy based on demand. Demand on every show can be different regardless of what we may assume from previous shows.
- Scarcity – If you have consistently empty seats in certain areas of the house, consider a more robust pricing reform strategy rather than just focusing on raising Premiums or top price tickets to make a few extra bucks. The resulting scarcity in inventory will make it easier to sell the remaining seats at higher prices.
- Middle Price Points – They make your full-priced tickets look like a better deal. Check out this article for more on this.
- Thresholds – Based on historical demand, you will learn when to increase ticket prices for individual performances and parts of house in response to higher-than-average sales.
- Evaluation – Crucial for improving future price changes. Evaluate how effectively sold out your house is by performance, seating section, and price point.