Ask Me Anything: Fixing Holes in the House
ASK ME ANYTHING QUESTION
How do you get rid of problem holes in your house?
STEVEN ROTH’S ANSWER
Let’s start by addressing how those holes got there in the first place, which is most likely through your pricing and the messaging your prices may send. Here’s an example:
|Section/Zone||Price||$ Differential||% Differential|
The above is a house ranging in price from $20 to $100, with around $15 to $20 differences among the prices. It costs $20 to move from section 2 to section 1, and from section 5 to section 4. It’s the same amount of money, but when we look at the percentage differences it’s a very different story.
The messaging delivered in the pricing plan above will generate the following patron behavior:
- Patrons will upgrade from section 2 to section 1, as the price differential is not that great, and $80 is seen as perceived to be close enough to $100 to purchase the higher ticket.
- Patrons considering section 5 will have a harder time deciding where to sit. There’s a 67% differential between sections 5 and 4. In this case that $20 seems like a steep increase. Yet if they are thinking about an upgrade, they might even consider section 3, as it’s not that much more expensive than section 4, and it’s closer to section 2—the second best price. These patrons will most likely do one of two things: 1) Choose section 3, as it’s only $15 more than section 4 or 2) choose section 6, as it’s very close in price to section 5.
The result, in this example, will be that very few patrons will select section 5 and this will cause a hole in the house. Note that there will most always be small holes in your house at the price breaks. If the seats in row J are at your first price and the seats in row K are at your second price, row J will most likely be the last row to sell at price 1.
Another cause of a hole in the house are seats that are difficult to sell based on location, such as far side orchestra seats towards the front of the house or seats in the very first row(s) of the orchestra— (depending on house configuration or the production). Let’s take one at a time:
- Far side orchestra: These are often seats that are not obstructed, but have poor sight lines. Yet they are in the front orchestra, and therefore might be priced too high. If that’s the case, there will be holes where those seats are. Solution: Put them on sale at a very reasonable price when the production goes on pre-sale, sell them out, and eliminate those holes.
- First row(s): Similar issue as the side orch. Price low, clear early, and focus your attention on filling the rest of the house. Except when you are presenting a holiday show like The Nutcracker or A Christmas Carol. In these two cases, families want their children to have a “front row experience,” and you can charge premium prices for those seats.
Finally, you can cover up holes in your house by being flexible with your inventory. Let’s say you have twelve rows in your house, and two prices. Divide your house into four sections and use the middle two sections to fill in holes. We call this micro-zoning. Here’s how you might adjust pricing of micro-zones according to sales:
|Initial On-Sale||Strong Sales||Underselling|
|Section 1 – Rows 1-4||Price 1||Price 1||Price 1|
|Section 2 – Rows 5-6||Price 1||Price 1||Price 2|
|Section 3 – Rows 7-8||Price 2||Price 1||Price 2|
|Section 4 – Rows 9-12||Price 2||Price 2||Price 2|
A hole in the house can easily be solved by observing trends and adjusting your pricing. If you need help, contact us!
JCA Arts Marketing collaborates with cultural organizations to increase revenue, boost attendance and membership, and grow patron loyalty. We provide consulting and software services to hundreds of cultural institutions across multiple genres, including dance, museums, opera, performing arts centers, symphony, and theatre. We can help you achieve your marketing goals.