Effective Event Pricing Strategy to Sell Out Your Event

Effective event pricing strategy to sell out your event

Effective Pricing Strategy for Your Event Researchers have observed that around 75% of the event organizers find it difficult to price their events. Do you also have the same problem of pricing your event?

What is too high and what is too less? Pricing your event too high will hinder the number of participants to your event and pricing your event too less will raise questions at your skills (or it is not a good quality event).

Determining a pricing model for your event can be a complex and time-consuming process. Pricing an event is nothing less than a roller-coaster ride for the most event organizers as it involves considering many essential factors. Coming up with registration depends on factors like meeting budgets, gaining some working capital and making profits.

A pricing model that worked wonders for one event might not work for another, but one thing that always works well is a good event with an effective pricing strategy.

We at Townscript have come across various pricing models that can help you work around a pricing strategy that is appropriate for your event and will help make it a huge success.

So, what should you do? How should you price your event? To help out our event organizers, we spoke to leading experts in the event industry. Presenting to you the 5 major steps that every event organizer must follow to choose an effective ticket pricing strategy: 1. Cost Analysis:

When you are deciding on the pricing strategy, have a clarity on the cost that will be involved. So that when you price, you cover the cost of your event plus gain some percentage of profit with it.

A. Plan your budget.

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Refer to the similar events if you have organized in the past and your historical event budget data.

In case you are organizing your first event, research other similar events and figure out the budget Jot down all the costs and expenses that will be involved. (Fixed and variable costs) Calculate ROI. and re-assess your investment.

B. Do a break-even analysis.

Break-even point in terms of sales is calculated as the event’s total fixed cost divided by the event’s contribution margin ratio. (contribution margin ratio is nothing but the difference between the total sales of the event and the variable cost involved in the event.)

For example, Your event has a fixed expense of 1,50,000 and there is only 30% of the sales to cover this fixed amount. The event should have net sales of 5,00,000.

With 5,00,000 of net sales, you should have a variable expense of 3,50,000 ( 70% 0f sales). Hence, at 5,00,000 of net sales, the event you organized will be at a breakeven point. This will gain you no income. This means your event was neither a loss nor a profit.

Take another example, you are organizing an event with a fixed expense of 10,00,000 and it holds a variable cost of 1,000 per unit. If you sell your ticket for 2000 bucks each. Then,

Break-even point in terms of sales would be= 10,00,000/(2000-1000)= 1000 tickets.

Therefore, break-even point will be= 2000* 1000= 20,00,000.

Based on these numbers, if you sell 1000 tickets for rupees 2000 each then you’ll reach your break-even point and anything above 1000 tickets will gain you profit.

2. Know your market and clients While deciding on the pricing it is very important to know what and where your market is? Knowing the geographical areas of your market and their demographics will help you get a clear picture of what should be the price range you should consider. For example, you can’t charge the same in tier 1 and tier 2 cities or maybe you can ignore the type of city but you definitely should consider the different income levels of your audiences. Pricing should defer based upon the markets you’re serving in.

Knowing your buyer’s persona will make this whole pricing decision a cake walk for you. After you know who your clients or attendees are and what they expect from you, decide what are you going to charge them for.

For example, some would like to pay for the duration of the event. Some would prefer to pay you for the different activities that are going to be performed in the event. And some might consider some other factor. Hence, it is very important to know who your clients are and what they want.

What is the value that you’re creating?

Pricing is actually a pretty simple and straight forward thing. Customers will not pay literally a penny more than the true value of the product – Ron Johnson Think about the value you’re going to create through your event in the lives of your attendees. Put yourself in the shoes of your attendees and then make a note of values you would expect from the event you’re going to attend.

There are people who don’t think twice before giving money for an experience which is one-of-a-kind. Sometimes it’s the belief of people or the trending and popular subject.

Find a unique factor in your event which will make your audiences want to have an experience of. It should be an experience of a lifetime and then strategize your pricing for that particular uniqueness of your event.

Based on your clientele persona, what are different ways in which you can structure your pricing?

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Different ticket prices for corporates and students for the same event Single-day and multi-day passes where a concession is offered on a multi-day pass Differential pricing targeting VIP tickets where special benefits are provided to VIP ticket purchasers

3. Different pricing strategy There are several types of pricing strategies that you may consider. Find out which type of pricing strategy is more effective for your event type. For example, to set up the registration price for a marathon, multiple pricing strategies can work.

A. Cost-plus pricing In this type of pricing strategy, you first calculate the total cost/expenses involved and then sell your tickets at a slightly higher price in order to gain profit. This is a very simple pricing strategy but this ignores the value that your event would be creating in the minds of customers.

B. Competitive/comparative pricing In this type of pricing strategy, you price your event based upon similar events in the past. You might find this strategy easy but due to this you might neglect the uniqueness of your event.

For example, if you’re organizing a marathon similar to the one that your competitor or you organized in the past, then you may consider the same pricing strategy that worked well for your competitor or your past marathon event. This will save you time but as mentioned earlier, this strategy will ignore the uniqueness of your event.

C. Perceived value pricing In this type of pricing, you give importance to what customer thinks or feels about your event. The transaction here is driven by perception as much as reality.

For example, If you’re organizing an event involving popular artists, then your pricing strategy should be based on the value that you’re creating in terms of the experience that you’re providing your attendees.

D. Bundle pricing

In this type of pricing, you offer discounts to your customers on purchasing a combo package to your event in comparison to purchasing single tickets.

For example, You’re charging 5000 bucks per ticket. But offer a ten percent discount on buying multiple tickets. or you offer a discount on booking a combo package which includes additional facilities like stay, meals or t-shirt.

4. Test Your Pricing: The single most important decision in evaluating a business is pricing power… If you’ve got the power to raise prices without losing business to a competitor, you’ve got a very good business.

And if you have to have a prayer session before raising the price by 10 percent, then you’ve got a terrible business – Warren Buffett You may start by charging low for your event (completely depends on the type of event) and then gradually increase it when you get enough attendees. But keep in mind to increase the price incrementally. This will make it easier for your audience to accept the price change.

Reduce the hike in price with some discounts, most importantly when the increase in price is new. Give them something in return to the increase in price.

5. Categorize your registration process based on pricing Adding value to your registration options always puts you in a win-win situation.

Event Managers get the numbers they are looking for and attendees get value for the money they spend. The best way to add value to your registrations is by offering discounts. Another way to add value to your registrations is by differential pricing and concessions.

5.1 Discounting Listed below are some discount categories that can help draw registrations and profits for your event just the way you would like them to.

A. Super Early Bird & Early Bird Category Super Early Bird & Early Bird Category is meant for hardcore fans. It is usually open for a very short time window and the registration prices are at the lowest best and most competitive during this time window. There are only a handful of registrations available in this category. Repeat and loyal customers who value your event are notified about the Super Early Bird Registration well in advance and thus genuine registrations are confirmed. Customers are happier as they get tickets at a lower price. The price difference between Early Bird and Regular registration must be substantial and luring enough.

P.S. Do not extend the early-bird cut-off date.

B. Regular Category No marks for guessing what this means! This category is open for registrations at a higher price and for a longer time span than the Super Early Bird and Early Bird category. This is when the regular registrations would come in. Those who have not been able to secure registrations in the Super Early Bird and Early Bird categories will book their tickets now.

C. Late Bird & Very Late Bird Late Bird and Very Late Bird Categories are your chances to make profits when your event is all set to take place. It’s safe to assume that by now you have marketed your event well, word of mouth has also played its trick well and regular registrations are over and your waitlist has some built to a good number, then it is time to open this category of registrations. These tickets are often priced at a premium and registrations remain open until there are no more tickets left out.

D. Other Discounts • •

You can offer loyalty discounts to boost participation from the existing user base You can offer bulk discounts to attract large groups or corporate registrations

5.2 Differential pricing and Concessions You can have general and premium categories. Set different prices for the two categories respectively. This will create a win-win situation for you as the general level pricing will make it affordable for a set of people and premium level pricing will create a sense of exclusivity among a set of people.

You could also provide a special student or senior citizen concessions. VIP ticketing with value addition is also a good way to bring in attendees. Assign different prices to different seating sections like in a play or concert. It is also wise to fine-tune prices as per the demand of tickets and popularity of the event.

Use these pricing categories to drive registrations and profits efficiently.

CONCLUSION: Coming up with an effective pricing strategy is one of the most vital things when you plan an event. Pricing your event right will bring you the profit you desire. There are many ways to strategize your event. But to have an effective pricing strategy, you have to work on finding which best suits your event and the attendees. You need to find that sweet spot where that fee feels right to your audiences and attendees for the experience they are going to get and also bring you the profit that you expected.

The strategies that we have discussed above are a few tried and tested strategies by the successful event organizers. Do some research work and then decide which pricing strategy suits your event the best. All the best!

This blog was originally published on: https://blog.townscript.com/event-pricing-strategy/