American Shakespeare Increases Earned Revenue
American Shakespeare Center at-a-glance
Since the economic downturn of 2009, ASC has endeavored to recover and grow revenue from performances. When ASC hired JCA Arts Marketing in 2015, they had already made significant progress on their own, but enlisted JCA Arts Marketing to identify opportunities for further increasing earned revenue. This decision was the first step of a strategic plan to help ASC better meet and maintain its artistic goals.
ASC provided a copy of their ticketing database to help JCA Arts Marketing understand and analyze buyer behavior. In partnership with JCA Arts Marketing analysis partner, Baker-Richards, JCA Arts Marketing mined customer transactional data to find further revenue optimization opportunities.
ASC's actual seating chart is seen above.
What We Found
The analysis uncovered three areas in which ASC could increase income:
1. Re-zoning the House – Previously, ASC’s Blackfriar’s Playhouse had been scaled as seen here:
The seats in purple were the most expensive, while the prices decreased by red, yellow, and then green, respectively.
However, when examining the pattern of demand on a Hotseat Index™, a much different pattern emerged:
The seats in red are purchased most often, while the seats in blue are purchased least often. In collaboration with JCA Arts Marketing, ASC adopted a new scaling approach that included the seats in the front and center of the orchestra as the top/premium price.
2. Adjusting the Price Scale – this initiative involved altering two pre-existing structures:
a. Day-of-Week Pricing – previously, ASC had priced according to Weekend (Friday & Saturday nights) and Weekday (everything else), with Weekend prices being slightly higher. However, analysis of patterns of demand revealed critical insights about how patrons choose their performances. Saturday and Sunday matinee performances were more popular than Wednesday, Thursday, or Sunday evenings. Thus, those performances were split out into their own pricing category at a mid-price between the Weekday and the Weekend.
b. Range & Relationship of Prices – ASC’s pre-existing pricing structure left a big gap between the second and third price, while the bottom three prices were very close to one another, offering little opportunity to psychologically influence buying of higher-priced seats. If prices are too close to one another, they offer little delineation between which seats are the better value. If they are too far away, the potential for holes in the house could occur from only most- and least-expensive seats selling. After adding a third price category for matinees, a new pricing structure was recommended to even out the relationship of prices and offer stepping stones into higher-priced tickets. These new ranges helped put a premium ticket on a weekend over $50, which was a price ASC had never reached before.
3. Dynamic Pricing Opportunities – Beyond the analysis work done, JCA Arts Marketing talks to ASC each week through a consulting retainer, examining sales data in real time to help determine where demand might warrant a dynamic pricing increase. This relationship enhances the work done through analysis to ensure the strategies and recommendations discussed are implemented year round. Through reports that break the house into its different pricing zones, it’s easy to identify the best possible opportunities for incremental income.
These significant changes to ASC’s pricing and house took a few months to fully implement, but after setting up new prices and price categories, there has been little pushback from patrons around the new structure.
As of March 2016, these changes have increased ASC’s earned revenue by more than an additional $100,000, in only four months, delivering over 5:1 ROI for the organization.JCA Arts Marketing