Ask Me Anything: Price Gaps
ASK ME ANYTHING QUESTION
We want to offer both accessible and premium prices for our performances, but are concerned about having a big gap between prices. Any suggestions for determining price range?
When thinking about what prices you should offer for a performance, the range and relationship between those prices is very important. It’s pretty easy to tell when a gap in prices is wrong.
Example A: Let’s say your price points are $20, $30, $45, $80, and $95. Obviously, that jump from $45 to $80 is ridiculous. You’ll sell out the three lowest prices, have hardcore fans paying $95, and be left with a huge hole in your house at $80.
The answer, unfortunately, is not as simple as keeping the price difference the same. The psychological difference must be considered as well.
Example B: A $5 gap between a $75 and $80 ticket is the same $5 gap between a $20 and $25 ticket, right? Not quite. The relationship of those prices is very different. Going from $75 to $80 is only a 6% change in price, almost nothing psychologically. However, going from $20 to $25 is a 20% change. That’s a very large psychological jump, even though both are only $5 gaps.
Considering not only the numerical difference in price, but the psychological difference as well, sets you up for a better range of prices to meet different patrons’ budgets while also filling your house.
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.