How A Solid Pricing Strategy and Good Incentives Lead to Advance Ticket Sales
Recently I executed an event marketing campaign for one of the country’s largest craft breweries here in Colorado. The brewery wanted to promote their annual beer festival where a massive number of breweries come together to offer unlimited sampling to the attendees followed by a concert. Beer and music, this event should sell itself! Well, maybe 10 years ago it would sell itself. The event market has amped up its intensity with every niche of a niche having an event. Getting a target audience to purchase tickets in advance is extremely challenging. This is especially true in the absence of a pricing incentive to give people a reason to purchase today rather than waiting to purchase later. This beer festival had several key event marketing challenges:
- Competition: there are beer festivals every weekend during the summer here in Colorado
- Geography: the festival is not located downtown but in a small town an hour drive from Denver that has no hotels or public transit options
- Scheduling: the beginning of June is a notoriously busy time for vacations and celebrations as it’s the start of summer break for all schools and there are a plethora of graduations
- Pricing: for the two months leading up to the event the pricing was the same. Day-of pricing was only $5 more expensive (11% up-charge for on-site tickets)
All these event marketing challenges are critical to consider, but for this post I’m going to focus on pricing, discounting, and incentives
Competition, geography, and scheduling were out of my control since I was not involved when those decisions were made. I was hired by the client to execute a digital ad campaign to promote the festival. The biggest challenge I had to deal with was the decision that the client didn’t want to offer any discounts in conjunction with the digital ad campaign. Despite my proposal of the ideal ticket pathway involving some minor discounting I was not given approval for a customer incentive to purchase today vs. tomorrow.
As a marketing consultant, this puts me in quite the bind. I was hired to get conversions, to sell tickets for the festival. However, I was only given the tools to execute a brand awareness campaign.
The Fundamental Pricing Truth
At the core of every product and service, there is a pricing strategy. There’s a fundamental pricing truth that doesn’t get discussed too often in marketing; most consumers are terrible at determining how much something should cost. When a consumer encounters your event for the first time they form a mental picture of the benefits. This picture forms based on your event marketing that tells them the benefits. With events and festivals the customer benefits are framed in terms of how much entertainment they will receive. Once your audience has a grasp of the benefits, you reveal the price to complete value equation (VALUE=Benefits/Costs). See, the consumer doesn’t know what your event should cost until you tell them. Your pricing creates an anchor for the value proposition in their mind. Now this is when you unleash the incentive. The incentive lowers the dollar cost and increases the value proposition in your favor. Event Marketing Gold.
Beer Festival Digital Marketing & Pricing Incentive
The beer festival had an onsite, day-of, price of $50. We executed a multi-channel digital event marketing campaign that included ad buys on Facebook and Google with retargeting across Facebook, Instagram, Facebook partners, and Google networks. The ad creative had a focus on showing the festival experience, promoting the features, and a call to action to learn more which sent the audience to the website. The clicks were coming in hot. Conversions, on the other hand, were strolling in.
My client wasn’t thrilled, yet wouldn’t budge on the discounting. That was until a little over a month out from the festival. At this point ticket sales were inline with the previous year, and the client wanted better numbers. I pitched the incentive concept again, created a quick and dirty way to execute the discounting in order to maximize awareness, and got approval to run a small discount for 4 days. This was just enough time to prove my incentive strategy is legit.
Incentive Results – Discount: $6 off for 4 days
This pricing incentive was pushed out via ads on Facebook for 4 days with a total ad spend of just $320. The temporary nature of the discount created urgency and sparked 103 ticket sales. Those 103 tickets netted $5012 in sales. That’s a 1566% return on ad investment! Now, it would be ignorant to look at that sales number in complete isolation. Part of the return was leveraged by the previous ad buy that caused pent up demand. Still, this huge return shows that even a small incentive can have monster impacts on the value proposition and get consumers to commit well in advance of your event.
A Natural Event Marketing Incentive – FOMO
Now more than ever, consumers have a fear of missing out (FOMO) on the “best” experience. So in the absence of a good incentive to commit ahead of time, we see people waiting as long as possible to commit. For this beer festival, we see a huge rush of ticket sales the final week of the event as well as a significant amount of onsite sales the day of the event. 46% of the total event tickets sales happened in the final 4 days of sales. While the boost in sales is good, getting interested customers to buy tickets sooner allows an increase in word-of-mouth marketing and greater leverage of email marketing to build excitement. Like the time-value-of-money, a ticket sale today is worth way more than a ticket sale tomorrow.
Generic pricing rewards waiting to purchase tickets
Many event marketing plans I create involve planning a discount incentive into the pricing strategy in order to hit the desired revenue per ticket sale. If there is no discounting, then the pricing needs to create urgency for the purchasers; some sort of value penalty for waiting. The big problem with this beer festival was that the pricing was unchanged for the two months leading up to the event. There was no penalty for waiting until the week of the event. Rather there was an unintentional reward to waiting to purchase tickets; people could wait to see if the weather was going to be nice or wait to see if something better came up. The sales spike in the final 4 days shows that people liked the festival’s benefits, but weren’t given a good reason to buy advance tickets until the week of the event.
When establishing event pricing I’ve had clients compare their event to a concert, and big concert tours don’t need to discount. Yes, this is true, most big concerts don’t discount. But concerts at big venues have a built-in supply restraint with the quality of where your seats are in the venue, and they vary pricing based on that seat location. For general admission events, like this beer festival, having one pre-purchase price and a day-of price people are rewarded for waiting to purchase tickets. Don’t reward waiting, incentivize to get commitment and ticket sales today.
Wrap Up
Event marketing is complicated. Your event only exists on a single day, at a single time and that creates unique challenges. You can’t package up the experience and sell it anytime you want. In order to get your target market to commit early there needs to be a good incentive to tilt the value proposition in your favor today rather than tomorrow. Because of FOMO and modern consumer behavior, your benefits in absence of a good pricing strategy are likely not enough to sell tickets in advance regardless of your niche. Time is your enemy. Craft a great pricing strategy that rewards advanced purchases and don’t be afraid of incentives. Then you’ll see your advance sales increase, your attendance climb, and your profitability skyrocket.
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