Sunday, May 08, 2011

It's Time to Pay Your Age

The predominant method of pricing to attract young audiences involves the last minute discounting of available inventory, usually resulting in what is commonly referred to as a "student rush." At Arena Stage, we had a similar system called our "30 and Under Program," which allowed patrons 30 years old and younger to access $15 tickets beginning at 10:00am on Monday for that week's performances. The $15 ticket price represented a 75% off discount from our typical average ticket price, so these tickets were in high demand. With such a popular program, you might be asking why are we trying to fix something that is "working" by launching a "Pay Your Age" program specifically designed to replace the previously popular "30 and Under" program?

Well, if you dig a little deeper, you'd find that it wasn't working because...

We were losing them at 31. Imagine if you had spent ten years paying $15 for a good seat to the theater, and on the day you turned 31, you received a birthday card saying "congratulations, in order to attend your favorite theater from now on, you must now pay 75% more than you have been." As an organization, in some cases, we had spent more than a decade teaching young adults that a ticket to the theater was only worth $15, when in fact we should have been reminding them that they were receiving a $60 ticket on a substantial discount because we recognized they were in school or were just starting their careers. The jump from $15 to $60 overnight was just too steep, and after paying such a substantial discount for so long, the value proposition was completely distorted.

We were encouraging late buying behavior. I have been to countless conferences where experts have blamed decreases in subscriber bases on younger patrons who are not willing to commit in advance. Well why should they? For years, we have been giving them great seats at the best prices at the absolute last minute. If you eventually would like younger patrons to become subscribers, you must develop pricing systems which encourage earlier buying behaviors. They need to be taught early on that in order to get the best deal on the best seats, they need to commit early. I always found it funny that the same theaters that forced younger patrons to purchase via last minute rush systems where the ones that complained they couldn't attract younger subscribers to offset the attrition of their older subscriber base.

We could not fulfill demand. In many ways, our inaugural season at the Mead Center for American Theater has been a banner year for Arena Stage. Performances sold out weeks and months in advance, and when that happened, requests for access to any held inventory and house seats for sold out performances flooded into our Artistic Director's office. By requiring 30 and under patrons to wait until Monday to purchase tickets for that week's performances, we found that in many cases, we had very limited, if any, inventory available for such an important program. That being said, I know how hard it is to tell a major donor or VIP that we can't sell them a seat because the seat in question was being held for our 30 and Under Program. Imagine--"I'm sorry Mr. Ambassador, the performance you would like to attend has been sold out for weeks, except for the tickets we have held for the 30 and Under Program. You aren't by any chance under 30 are you?"

The Fix
So we developed a new system called "Pay Your Age (PYA)." The premise: for our patrons who are 30 years old and younger, they can purchase PYA tickets starting two months in advance of the first public performance by calling the box office and simply paying their age for their ticket. Tickets will be held at will call for pickup, and box office associates will verify age upon check-in. We have guaranteed that 3% of the inventory for each performance will be held specifically for this program. In the case of our upcoming summer revival of Oklahoma!, this means that on Monday, May 9, 1,800 PYA tickets will go on sale in a first come, first served format.

I anticipate that demand for these tickets will be very high, and they will sell out quickly. This in turn will underscore the importance of buying in advance if a 30 and under patron wants to get the available discount. Wait too long, and we'll be sold out. In addition, by paying just $1 more per ticket per year, we hope to gradually adjust each patron year by year, so that when the time comes, there isn't tremendous sticker shock.

12 comments:

Jamie OBrien said...

Chad--Can you clarify something please? Am I reading this correctly that the PYA program is only available for under 30s? If I've got that right, do you have anything in place to help ease the transition to the 31st birthday card that asks a still fairly young patron to pay 50% more than they would have had to a month earlier? Thank you.

Chad M. Bauman said...

Jamie,
Once a patron turns 31, and we have already gotten them into a pattern of buying early for a discount, we would then offer them a 3-play preview subscription acquisition promo probably in the range of $99 for three plays (or $33 per ticket). After they "age-out," my next major priority is getting them to subscribe. Then once they subsribe, I will work to get them to upgrade their subscription packages. This is a long term strategy that really looks at the customer over a span of 10-15 years. From first time PYA buyer to full season subscriber and donor will probably take 15 years.
Chad

amy said...

Thanks for this great post. One question - what about children? Can someone bring a 5 year old for only $5?

Chad M. Bauman said...

Yes, Amy. You could purchase a $5 ticket for a 5 year old child.

Carolyne said...

This is a great idea - much better than the push pricing strategy. I think this makes purchasing tickets much more accessible for the younger demographic, both students AND young professionals.

My only concern is individuals lying about their age. I understand that once you have a patron's age on file, you can track and add a dollar to their ticket price each year. However, does Arena Stage have any sort of verification system in place, such as requiring patrons participating in the PYA program to pick up tickets at Will Call and show their driver's license, or are you operating on an honor system?

Lastly, is PYA based on the year an individual was born, simplifying the calendar to January - January? For example, all individuals born in 1990 would pay $21 for a ticket during 2011. Or will the PYA year start on the birth-date of each individual patron, meaning someone who's birthday is July 1, 1990 would pay $20/ticket in 2011 until July 1st when he actually turns 21.

Chad M. Bauman said...

Carolyne,

We require patrons to show their ID when they pick up their tickets at will call. Ticket prices are based on their age at time of purchase.

Chad

RGL said...

Interesting pricing strategy. I have always viewed last-minute-tickets very critically. If you are typically at 70-80% capacity chances are that you'll get a cheap ticket.

One other thought on children and admission: I always find it strange that I as an accompanying adult at a childrens program have to pay full price whereas the children get the reduced rate. Should it not be the other way around?

Matthew and Suzanne said...

Different question: Do you recommend a vendor who can accurately assess an audience database for demographics, specifically ethnic/racial makeup? Thanks, your friend from AFTA days

Chad M. Bauman said...

Hey Suzanne--
Nice hearing from you. I use Target Resource Group for all of my data needs. Highly recommend them.

Matthew and Suzanne said...

THank you Chad!

Jamil said...

Hey Chad,

I'm a little confused. It seems like these two comments seem to conflict with one another:

"That being said, I know how hard it is to tell a major donor or VIP that we can't sell them a seat because the seat in question was being held for our 30 and Under Program. Imagine--'I'm sorry Mr. Ambassador, the performance you would like to attend has been sold out for weeks, except for the tickets we have held for the 30 and Under Program. You aren't by any chance under 30 are you?'"

"We have guaranteed that 3% of the inventory for each performance will be held specifically for this program."

So if the 3% of the tickets held for the PYA program are not sold by the week of the performance, will they still be available or will we sell them to the highest bidder (i.e. The Ambassador in your post)?

Overall, the program seems to be headed in the right direction. Although, the butts in seats vs. target audience questions finds a way to rear it's ugly, money driven head...

Chad M. Bauman said...

Jamil,

It was the intention that the program would be popular enough that the PYA tickets will sell out weeks before performances take place. Fortunately, we have seen a very strong response so I anticipate that will be the case. However, once we get closer to performances, if inventory remains in the PYA program and the rest of the performance is sold out, we will convert left over PYA inventory back over to become available to the general public.