The Spektrix Presents event series brings together the latest insights from across our Partner Network. In March, Robin Cantrill-Fenwick from Baker Richards, Lindsay Anderson from TRG Arts and Sean Kelly from Vatic discussed strategy, data and measuring impact for digital events.
How to approach pricing for digital events has been a top question for many in the arts. Shows have shifted from buildings to desktops, or been specifically made for online presentation. Most organizations have had to evaluate every aspect of digital programming for the first time and without a handbook, instructions or benchmarks.
While there is no one-size-fits-all answer to questions like “Is digital programming right for our audience”, “What is the optimal price point for my digital event” or “How can I measure success”, our arts industry professionals were able to give some helpful pointers based on their learnings from the last year.
Your pricing strategy should reflect your strategic objectives
“Our sector has found itself responding to the demands of Covid-19 and offering digital events in place of live performance. It’s time to take a step back and reflect on our strategic objectives and our approach to pricing. Using data to measure our success has always been important, and it’s even more so now. Is your organization tracking metrics that are informing your actions in this critical time, and are you using new, aggregate data resources available to you?” Lindsay Anderson, TRG Arts
Digital events serve different purposes than those in-venue, and defining the strategic objectives behind online content is the first step to an appropriate pricing structure. Digital events can, for example, help your patrons stay connected with you, drive charitable giving and reach new and more diverse audiences. These objectives materialise in metrics, which your pricing strategy needs to align with.
Your pricing can promote loyalty and encourage early booking, so have a look at previous spending patterns by loyal patrons. Consider your existing cost structures and the artistic quality of your output, too - while the scale of presentation might have changed, these items likely won’t have. You’re already holding a lot of data that will inform your objectives and pricing strategy in your own CRM, and aggregate data tools, such as TRG Arts and Purple Seven’s Covid-19 Sector Benchmark, can help put things into perspective.
Balance the relationship between revenue and volume with variable pricing
Research by Baker Richards has shown that there is high interest in digital events, especially participatory or interactive content, workshops and content developed exclusively for the web. Your traditionally highly engaged audiences are likely very willing to engage with your online content, too, but it pays to think beyond your core groups when it comes to your pricing strategy.
Fixed ticket pricing - one price for all - is easy to set up, but may eventually reduce both your revenue, as there will inevitably be loyal customers who would be willing to pay more; and volume of bookings, if the lack of lower ticket prices prevents people with lower income from booking.
“As a sector, we know much more about the market for digital culture in March 2021 than we did in March 2020. The evidence is that variable, adaptive pricing strategies are needed to help maximize the three R’s – reach, revenue, and relationship.” Robin Cantrill-Fenwick, Baker Richards
A variable pricing approach, making tickets available at a number of prices, can help you balance revenue and volume. The key to success lies in the packaging: Do you hand control to your customers, letting them decide whether they’re savvily saving or generously giving? Are you communicating value fences, adding transparency and suggesting added value to your price stages? Are premium experiences of exclusivity or interactivity reflected in the pricing? Giving your patrons the choice of ticket prices may pay off for you.
Use dynamic pricing to get to the right price, not the high price
What you consider the right price for a digital event is not necessarily what your customers think it’s worth. Sean Kelly warns of pricing online offers too low in an attempt to compete with streaming giants like Netflix. Your content is not produced for mass consumption, its value proposition as a local, carefully produced object is vastly different, and your patrons are aware of that.
“Just because the content is digital, doesn’t mean that it is automatically worth less. In our case study, when pricing was dynamically adjusted to line up with the patrons’ perception of value, average ticket pricing increased 4x, nearly matching the average ticket for pre-pandemic, in-person events.” Sean Kelly, Vatic
Ensuring that you always capture customer data through your CRM is the first step to success. Dynamic pricing, incrementally adjusting the ticket price according to demand, is a useful way of hitting the right price point based on those data. Test different markups and choose metrics that actually mean success - while vanity metrics such as online traffic, YouTube views and likes reflect well on your brand presence, they’re not tied to revenue and should not influence your pricing. Analyze your data carefully, and don’t shy away from raising the prices for your events where appropriate.
Developing a pricing strategy for a new way of working isn’t easy. From using your own data and aggregate data sets from the industry around you, to taking variable and dynamic approaches to your strategy, our experts at Baker Richards, TRG Arts and Vatic have offered various key steps for you to take. We hope you have found this inspiring, and we would love to hear from you what has helped you to define your pricing strategy for digital events.
If you want to find out more about Spektrix Presents and other events, keep an eye on our communications and social media for event announcements.