Saturday, March 19, 2011

Is It Time to Re-Think the Way We Discount?

It seems to me that there are two reasons to provide discounts:

  1. To encourage and reward particular behaviors

  2. To provide access to targeted demographics

Too many times arts organizations provide discounts that don’t encourage desired behavior, or that benefit patrons outside of targeted demographics. While exercised with good intentions, a quick examination of some common practices reveals that there can be some detrimental unintended consequences:

Rush Tickets. Many organizations have policies that place tickets on sale, sometimes to certain demographics like students, at the last minute at a steep discount. Unless your organization is selling at a high percent capacity, or has thousands of seats, by practice, you are guaranteeing a steep discount to relatively good seats in exchange for people exercising an unwanted behavior (late ticket buying). Many organizations bemoan the deterioration of their subscriber base, but continue to promote their rush ticket policies. Why would patrons buy several shows at once months in advance when they know they can get a better deal on decent seats at the last minute? Instead, I would encourage organizations to develop policies to reward desired behaviors. In order to convert a single ticket buyer to a subscriber, an organization usually must do two things: 1) convert them into multi-buyers so that they are purchasing multiple productions in the same season, 2) incentivize them to purchase their tickets earlier and earlier. By doing both, you establish behaviors that closely mimic a subscription, and therefore your conversion from single ticket buyer to subscriber should be much easier. Recommendation: If you would like to provide discount tickets to targeted populations such as students, then do so in a manner that instills early buying habits. Instead of incentivizing a last minute purchase, incentivize purchases that are done weeks, if not months, ahead of time.

Pay-What-You Can (PWYC) Performances. The intent of a Pay-What-You-Can performance is honorable. Most organizations desire the ability to make their products available to populations that simply cannot afford standard ticket prices. However, in practice, another reality presents itself. I am always amazed by organizations that continue this practice citing accessibility concerns, when all one has to do is stand outside and count the number of patrons who arrive for PWYC performances in expensive luxury sedans and fur coats. If you can afford a Mercedes, I am pretty sure you can cover the price of a regular ticket. What those patrons are doing is taking away inventory from the people you want to serve. They are taking advantage, but only because you are allowing it. Recommendation: Several organizations are now requiring proof of limited income in order to access PWYC performances or substantially reduced price tickets. Much like how students must show IDs, proof such as an EBT card or a tax return can ensure that you are serving the exact populations you have created these programs for.

Complimentary Tickets. A complimentary ticket represents the ultimate discount, yet too many times they are used for the wrong reasons. Consider the following circumstances:

  • Potential Donors. Many development officers use complimentary tickets to get donor prospects in the door and into a performance. We all know that first impressions are critically important, so I would ask what message are we sending to someone with obvious means when we have to give them a free ticket to get them in the door? If they are seriously interested in your work, or in becoming a major donor, shouldn’t they want to pay the same ticket price that standard patrons pay in the first place?

  • Board Members and Current Major Donors. Giving at certain levels should come with exclusive benefits, such as access to purchase house seats or the ability to purchase tickets before they go on sale to the general public. However, many organizations simply give away tickets to Board Members and Major Donors. In the case of Board Members, they should always be looking for ways to help an organization increase revenue, and by taking complimentary tickets, in many cases they are using inventory that can be sold. Major Donors on the other hand are often gifted tickets at certain levels of giving, however the ideal situation would have them purchasing tickets and giving philanthropically. By providing large amounts of complimentary tickets to Major Donors, all an organization is doing is moving revenue from the earned line to the contributed line. When trying to build revenue, both earned and contributed, an organization cannot rob Peter to pay Paul.

  • Media. Many organizations don’t take the time to properly credential media, and by not doing so, they are tempted to provide complimentary tickets to every request that comes into their press department. Professional journalists deserve a complimentary ticket if they can commit to coverage via a properly credentialed media outlet. If journalists request a complimentary ticket, but cannot commit to coverage or they represent an outlet that is less than professional, it is the responsibility of your publicist to decline the request. In many cases as a courtesy, organizations will also provide a second complimentary ticket so a journalist can bring a guest, however this isn’t obligatory. Many Broadway producers and major organizations will only provide a single complimentary ticket for a journalist in circumstances where there is incredibly high demand on inventory.

  • Complimentary Standing Room (CSR) or Standby Tickets (CST). Many organizations have very liberal policies for CSRs and CSTs. However, similar to rush tickets, unless you are selling out regularly, you are training those that use CSRs that they are available for virtually any performance, thereby guaranteeing that those who use CSRs will never purchase a ticket in the future. In many cases, CSRs are a self-fulfilling prophesy. The argument being that if an organization has unused inventory immediately before a performance, why not use unfilled seats for CSRs or Rush tickets? Well in many cases, CSRs and Rush Tickets are the reason why organizations have unsold inventory at the last minute. In my opinion, CSRs should only be used for customer service issues for longtime subscribers/donors or for internal artistic staff that need to maintain a production in a long run. Other than that, CSRs should be subject to your standard complimentary ticket policies and tracked as a complimentary tickets.

A final thought on complimentary tickets:
It isn’t uncommon for an arts organization to use 5-10% of its entire inventory for complimentary tickets. Usually these tickets are provided to people that could easily afford the cost of a ticket. At the same time, many organizations are desperately looking for ways to make their work more accessible to populations of people who simply do not have the means to purchase a ticket, even at a discount in some cases. I wonder what would happen if an organization adopted a policy that complimentary tickets would be reserved exclusively for patrons who had no other means to access their work? Hundreds, if not thousands, of complimentary tickets would become available to the people who needed them the most.


Dave MacD said...

Re: Media

I think your policy toward separating "professional journalists" from others is extremely problematic. There have been a number of issues arise over the last four to five years regarding journalistic status of web-only publishers. (Jason Chen/Gizmodo's iPhone 4 debacle comes immediately to mind.) Who gets to decided which people "count" as journalists and which do not? Bloggers are at least as influential as newspaper writers because their readerships tend to be more loyal. (There are a number of reasons for this.) In fact, I think anybody who is regularly writing on the web, whether or not they get paid, should qualify for the journalist comp ticket. This would be more beneficial to the organization than the average dead-tree journalist.

Ian David Moss said...

Hi Chad,
Nice post - I very much agree with your points. I thought you might be interested to know that I riffed on the idea of income-sensitive tickets a while back and tried to think of a system by which it could be made possible: and

Chad M. Bauman said...


With all due respect, I never made the argument that only "dead-tree journalists" were professional journalists. At Arena Stage, we have many bloggers on our media list. As a blogger myself, I am very aware of their influence. However, organization's must credential press, but traditional and non-traditional. Not only to determine whether or not a journalist should receive a comp ticket, but for other more important reasons. For example, safety is an incredibly important concern. When an organization is producing a work with a high profile artist, thousands of requests will come into a media department asking for access to the artist for journalist reasons. When in fact, some of these "journalists" are presenting a false front just to get access to an artist. In some cases, this can be a serious security issue. Most press officers understand this important responsibility.

holcombrocker said...

Hi Chad,

What is your stance when it comes to Volunteer Tickets? In my organization, we typically give a volunteer a complimentary ticket to the performance they are working. We will typically seat them the day of the show in an available seat. Do you offer complimentary tickets or tickets at a discount for volunteers? I am just curious as to where you draw the line for providing incentive for community development