This past December I helped plan a New Years event that was a massive success. We completely sold out and everyone had a great time. However, while we were selling our last remaining tickets I realized that we made a mistake. Not a giant mistake by any means, but one that prevented us from maximizing our ticket revenue.
Predicting demand for an event is hard. Especially if the event is the first of its kind. This was the situation we were in for our NYE event. While we were confident in reaching our max capacity of 110, we weren't 100% sure. Are the ticket prices too high? Are we pricing the tickets too low? Are people going to show up for a boat party in sub-40 degree weather? These were the questions being asked. As you can tell, there were a lot of assumptions made leading up to the launch of ticket sales.
Where We Went Wrong
The mistake we made didn't have anything to do with our initial price point. We set early bird pricing at $70 and it was well received. Where we could of done better was pricing the last batch of remaining tickets. Let me explain.
Before launching ticket sales, we announced via our Facebook page that ticket prices would rise to $80 a week out from the event. We did this to jumpstart early bird sales and have a nice cushion to cover our budget. About a couple weeks from the event date, it became obvious that we were going to sell out. People scrambling to figure out their NYE plans equated to tickets selling like hotcakes. Demand was so high that the $10 price increase didn't even matter. People just wanted to secure a ticket at all costs.
The graph above shows the number of tickets we sold over a 3 month period. For you Economics majors out there, you can see how inelastic the ticket prices were. With the $10 price increase, demand actually increased as well! We could go deeper into the relationship between an event's price elasticity and time, but that's for another blog post.
After selling out, we had about 20 people on our wait list clamoring for a ticket. We wondered how much these 20 wait listers would be willing to pay. We couldn't straight up ask them, that be disingenuous. The wait list did evoke an even bigger question: Could we of set our initial ticket price even higher?
The Batch Ticket Strategy
Here's the one strategy we'll use next year to maximize our ticket revenue. Instead of announcing a single price increase a week out, we'll release a set # of tickets every couple weeks. Each subsequent batch of tickets will increase in price. The first batch of tickets will be the least expensive with the last batch being the highest priced.
This strategy should allow us to measure demand in an efficient manner. No longer are we locked into a single $10 price increase. We can be creative with our pricing and adjust accordingly. If you're using event registration software like Ticketbud, you can adjust pricing and quantity on the dime. Better yet, you'll also be able to schedule the start & end times for each batch of tickets. Automating your online ticket sales is a no-brainer.
When you are planning a first-time event, learning from your mistakes is hugely important. It's a given that there's going to be a lot of trial and error. Pinpointing where you can do better and actually implementing those improvements for next time is a must.]]]]> ]]>