Ideas from the team

Category

How The New Fee Regulations Could Work In Your Favour

The UK government recently passed legislation banning excessive payment surcharges whilst still allowing traders to recover the costs of processing payments (read guidance notes from the government here). This is clearly a great thing for customers often left disgruntled by unexpected increases in ticket prices, putting a negative slant on the customer experience before it has even begun. But the legislation is also a clear signal to arts venues that customer expectations have changed, and they must accordingly change their fees to meet these expectations and of course, to meet the new legal requirements.

In many ways, it’s a great opportunity for venues and organisations to completely rethink their stance on surcharges - which have limited the relationship potential between customers and venues for a long time - by removing fees altogether. Instead, focusing on online bookings and donations can improve customer satisfaction and increase revenue. This might sound risky or counterintuitive, but keep reading and we’ll explain why we think it makes sense, and how you can do it.

Rethink ticket prices

Extra fees of all kinds are unpopular, even postage fees can cause some annoyance. By removing the additional fees completely and instead, adjusting ticket prices slightly to cover the cost of payment processing, postage etc., customers don't have to be aware of the ins and outs of the costs of selling tickets.

As well as keeping customers happy, it also works well for your venue. For example, extra postage costs can drive people away online, and encourage them to choose CoBo at the checkout (which although a free service, actually requires the cost of a box office dealing with customers). It saves box office staff more time, and lets your audience avoid queuing to pick up tickets, giving them a chance to get drinks at the bar and actually enjoy themselves!

If booking fees helped your receiving theatre or venue to receive additional income, could you work out adjusted ticketing prices with the promoter instead? If this is a possibility, the benefits are that you avoid involving the customer in shouldering the costs through fees, and the venue and promoter still each get an appropriate share of the money taken.

Encourage online booking – don’t charge for it!

Venues have traditionally been charged extra by box office software providers to make online sales but not to make phone or counter sales. As a result, customer booking fees are usually applied only to online transactions. This has an obvious effect on customer behaviour by driving them away from online booking.

This is big mistake, because when customers book online through a well-integrated booking system like Spektrix, venue staff save time from serving customers over the phone, answering their queries or serving them in person, which are oft-forgotten hidden costs. Also, because Spektrix provides all the seating information, offers, and membership discounts customers expect, many Spektrix clients report an increase in online sales, resulting in a marked improvement in customer satisfaction. That’s why we encourage online booking by not charging extra for web sales and also strongly recommend removing deterrents to online booking such as fees.

Ask for donations instead

By completely removing booking fees and postal charges, you’re free to encourage donations as much as possible! Not only does this avoid the possibility of violating the new booking fee rules, but it opens the way to good relationships with your customers. On the checkout page when booking online, they’ll notice that you didn’t apply any booking fees (no matter how small) and that feeling of goodwill could easily lead to a spontaneous decision to make a donation.

Choosing donations over booking fees makes even more sense when you consider that booking fees are subject to VAT. So if you charge a £1 booking fee, you’re actually only getting 83p. By contrast, the value of a customer making a donation increases, thanks to Gift Aid. So for every £1 donation, your venue actually gets £1.25 (assuming the customer is Gift Aid eligible). As a result, the organisation keeps far more money when it’s given as a donation, than as a fee, but customers are unlikely to make a donation if you’ve made them pay a booking fee first.

Spektrix can automatically suggest a donation amount to online customers based on some ranges of values set up on our system calculated on the basket total, and customers are always free to increase or decrease this amount.

So, while charging a booking fee might seem like the only option for increasing your revenue in the short term, looking beyond this could lead to higher revenue, sustained well into the future.

 

Image credit CC.