Ask Me Anything: Variable vs. Dynamic Pricing
ASK ME ANYTHING QUESTION
I often hear people talk about “variable pricing” and “dynamic pricing.” What is the difference? Can these terms be used interchangeably?
CHRIS FABISZAK’S ANSWER
Good question! These terms are often used interchangeably but actually describe two different approaches to a pricing strategy. Here are their definitions:
- Variable Pricing – altering seat prices by performance date/time. So a Saturday evening of a hit show might cost more than a Wednesday matinee of a harder to sell production.
- Dynamic Pricing – adjusting pricing up OR down in response to demand over the course of a sales cycle. If you can see a show is selling much earlier than similar shows, perhaps the price is increased by a few dollars to maximize income.
In other words, the difference is that variable pricing starts at “various different” places, but doesn’t ever change. Dynamic pricing changes in response to demand.
And to throw in a bonus term:
- Yield Management – this is maximizing revenue from buyers who aren’t price sensitive. For example, having the best seat at a premium price. Someone is always going to want the best seat!
Variable pricing and dynamic pricing are two types of yield management. Does your organization implement any others?
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.