How much should you pay for a ticket to a football match or gig? In the past, the answer would have been simple: whatever the seller sees fit to charge you. However, the act of a company, brand or team selling access to their assets has developed substantially in recent years. Slapping a one size fits all price on an asset (and hoping for the best) is no longer an appropriate concept in this social era of consumer choice, and various companies, sports teams and bands are recognising this.
But the point isn’t just that ticketing is changing to absorb changes in consumer behaviour – it is fundamentally being driven by business priorities. In recent times, there has been a steady increase in pioneering pricing strategies, honesty payments and social media-influenced purchases, as parties in the sports and entertainment industries look for ways of maximising revenue through innovation. In industries such as live sport or music, with large fixed costs driving a high minimum cost per match or event, these innovative pricing strategies can represent a win-win for consumers and companies alike.
The Digonex pricing strategy is one approach that is spreading through American sport, and is beginning to be adopted by British sports teams. Described catchily as a ‘fan driven pricing system for event ticketing that scientifically changes prices based upon econometric and behavioural principles’, the system allows for ticket prices to be changed daily depending on market conditions. Similar to booking a flight or ticket to the theatre, the system allows for the flexibility to alter prices for every game dependent on demand.
Following a drop in attendances, brought on by collective belt tightening across their fanbase, Derby County were the first British sports team to test this pricing strategy. Having received special dispensation from the FA (usually clubs can only alter prices for four games per season), it is already proving a success, with attendances noticeably on the up. Tickets for all games are made available at the beginning of the season, meaning sensible Rams fans can book their tickets for big matches in advance to save them purchasing a more expensive ticket closer to the game. In order to appease season ticket holders, Derby have also ensured that ticket prices never drop to a price that would represent better value than a season ticket.
Cardiff have followed in Derby’s footsteps by adopting Digonex and Bristol City are soon to follow. Two Premiership rugby clubs are reported to be close to adoption of the system and the spread is expected to continue to major European sports teams. And why wouldn’t it? When fans can get cheaper tickets, and clubs can benefit from larger attendances and higher revenue on seats that would otherwise have been completely empty, everybody wins.
More recent examples are ‘pay what you want’ schemes for specific matches, dreamt up as a response to tricky economic circumstances and dropping attendances. Mansfield Town saw a doubling of their attendance when adopting the scheme for a game in 2010 and Brentford FC are running a similar promotion for a match against Stevenage in February. Supporters are able to pay whatever they want to for a ticket for the match (over £1) and 50% of any excess over £5 will be passed on to the ‘Sport Relief’ charity. In all these cases, the point is that the tickets would otherwise remain unsold – with no revenue to the club and no bums on seats. With minimal costs to the club involved in hosting an extra fan, this will boost club revenue and help fans out during tricky economic times – while also possibly introducing new fans to the club and generating goodwill through the donation to charity.
These innovative pricing schemes aren’t all just about direct impact on revenue though. Over recent years, there has also been an increase in one-off sales schemes by sports teams and bands as a way of reaching new audiences and/or showing themselves in a positive light. Most famously, Radiohead made a bold move by relying on ‘honesty payments’ for their ‘In Rainbows’ albums in 2007. Denounced and praised in equal measure, opinions differ on whether that move was a financial success. It is clear that money was not the primary driving force behind the idea, and similar moves have become increasingly prevalent around sports.
The evolution of social media is also having an effect on ticketing, with AEG, Malaysia Airlines and KLM examples of brands leading the way with inventive schemes. As an attempt to take on Ticketmaster, AEG have introduced their innovative ‘AXS’ ticketing service. As well as making life difficult for touts by seeking out automated servers purchasing large numbers of tickets, they have introduced a system that allows purchasers to reserve adjacent tickets for friends through Facebook for concerts, shows and other events. Alerted by Facebook, these friends have 48 hours to purchase these tickets knowing that they will be sat next to their mates. Again, it looks like everybody wins. Fans will have a better time sitting next to their mates (and not having to shell out on their friends’ tickets with the inevitable sluggish paying back process) and companies have a happier crowd. This may not directly impact on revenue, but it is likely to have an indirect effect on consumer morale.
Malaysia Airlines and KLM have gone one step further by attempting to socialise the art of booking and taking a flight. When booking a flight, users are reminded of friends who live close to their destination and informed of any friends who may be making a similar journey. Users also have the opportunity to share their itinerary, and through the seat selection process, are able to select seats next to Facebook friends. This clearly comes with a few privacy/stalking implications but the concept feels like a landmark step forward.
Why are these ideas on the increase? In each of these cases, the innovation behind the schemes opens doors to opportunities that benefit each of the stakeholders in the exchange. With Digonex, previously unsold tickets are more likely to be taken up, satisfying fans and helping the club put bums on seats. In a similar manner, the schemes by Malaysia Airlines and KLM give the airlines unique selling points, and the flying experience is enhanced for those making the journey. With the subject of rising ticket prices forcing itself towards the top of the sporting and entertainment agendas, this sort of innovative use of assets can help to maintain and develop healthy relationships between purchaser and seller.
By Rob Guppy on January 31st, 2013
Tags: Advertising, Aviation, Barclays Premier League, Blogging, Charity, Default, Event management service, Facebook, Football, PR, Public relations, Social Media, Sport, Travel