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Published on June 2nd, 2010 | by Pat Germann

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Dynamic Pricing: Making It Work?

The debate over dynamic pricing continues. Back in March, Gene Carr from Patron Technology wrote a great overview of dynamic pricing and voiced his support for the practice. Last week, Trisha Mead at 2am Theatre challenged the naysayers with a post about her own successful dynamic pricing experiment. And The Mission Paradox responded by cautioning readers about dynamic pricing’s potential to tarnish a non-profit’s image. While there has been plenty of discussion about audience impact, what I haven’t heard much about is the technology behind dynamic pricing.

Many ticketing systems are not designed to handle fluctuating ticket prices. Work-arounds can be frustrating and confusing for the ticket seller. Particularly in outlet situations, where ticket sellers handle the sales for many different groups and venues, the seller’s level of comfort with your ticketing setup and policies can make a huge difference in the customer’s experience.

In addition, as Carr notes, there is no “magic computer program” determining the best prices for your tickets at any given time. Organizations and consultants may have their own formulas or schedules, yet for the most part such changes are not programmed to occur automatically. A dynamic pricing strategy may have an effect on an organization’s bottom line, but it will likely have some impact on your staff’s time as well. How to implement dynamic pricing may be as important a discussion as whether to implement it at all.

What is your experience with setting up dynamic pricing? Do you know of a ticketing system that makes dynamic pricing simple?

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  • David Zoltan

    Hey Pat,

    In the study we did as part of our 2001 MAM Systems Synthesis thesis on dynamic pricing, we started to look at forecasting systems and built a primary decision tree for exactly this purpose. I’m surprised that no one has stepped up to implement it yet.

    I still have every faith that arts administrators will realize what a huge tool this will be for revenue streams and for achieving outreach missions as well. In a talk in Madison, Michael Kaiser relayed the success of this model at the Kennedy Center. It’s my belief that with large successes like this out there, that smaller organizations can benefit from that success in the form of some reasonable assumptions that can then be tested and reacted to in implementation.

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