How much you charge for tickets influences how successful your events will be. If you price your tickets too high, you risk making low ticket sales, whereas pricing too low leaves money on the table.
You should aim to find a balance between pricing and event value. This will help you to identify an amount, not too high or too low, that your target audience is willing to pay. Doing this can be overwhelming if you don’t have the right guidance.
That’s why we’ve prepared this step-by-step guide to show you how to create an event pricing strategy that works well for everyone involved.
What Is an Event Pricing Strategy?
An event pricing strategy is a method used to determine the best prices for your event. It helps you identify and set up the right ticket price for an event. And that is a price that considers consumer and market demand while maximizing profits and shareholder value.
Pricing strategies for events depend on several business factors, including revenue goals, cost of organizing and marketing the event, brand positioning, and target audience. External factors, such as competitor pricing and general market or economic trends, can also affect your event prices.
The Importance of Setting the Right Price
Setting ticket prices right is essential for several reasons:
- Increasing profitability – the perfect event ticket pricing helps you attract more attendees. You'll generate revenue from more ticket sales and increase profit margins this way.
- Improving cash flow – the more revenue you generate from selling event tickets, the more your cash flow improves. A positive cash flow offers financial stability. You’ll have enough cash reserves to handle any unexpected financial challenges that may come your way.
- Attracting the right attendees – potential attendees often assess the value they’ll receive from an event against ticket prices. If you strike a good balance between value and price, you’ll attract your best-fit customers. They’re also likely to support you in different ways. They might attend other events in the future, or rave about your event on social media platforms, which will effortlessly boost your marketing efforts.
- Expanding market share – pricing your event tickets better than competitors expands your market reach. You’ll become the preferred company and eat into your competitor’s market share.
Creating an Event Pricing Strategy That Works for Everyone (Step-By-Step)
An effective pricing strategy that works well for everyone should consider the needs of all relevant stakeholders. These include the business leadership, event sponsors, speakers, artists or entertainers, and attendees. It should also take your overall business goals into account.
Here is a step-by-step approach to creating an event ticket pricing strategy that benefits all parties.
1. Know Your Target Audience
Knowing your target market is the first step to creating an inclusive event pricing strategy. You want to understand your audience’s purchasing power and preferences so you can customize your event ticketing strategy to their needs.
To gather relevant information and get the insight you need, send surveys to attendees of your previous events or run polls on popular platforms amongst your target audience. Give them options of different price points and ask what they expect to gain for each tier. You may also want to research similar events and read reviews about them.
You’ll be able to gauge your audience’s purchasing power and know what will motivate them to buy tickets. You can then customize your pricing strategy accordingly.
2. Determine Your Event’s Value
What value will your event bring to relevant stakeholders? Determining the value of your event can guide you to put the correct price tag on it and select an event ticket pricing strategy to match. This requires you to closely examine relevant parties and assess what they’d like to gain from the event.
Different stakeholders have different needs:
For potential attendees – pinpoint their perceived value so you can estimate price points they’ll willingly pay. Your target audience’s perceived value is the benefit they believe they’ll gain by attending your event. It includes the entire experience they expect to have – from the knowledge they’ll gain, networking opportunities they’ll access, entertainment value, and any other perks offered.
Understanding your audience’s perceived value can also help you justify higher ticket prices if necessary so potential attendees purchase tickets without reservations.
For the rest of your stakeholders – you’ll have to map out what’s at stake, i.e., the stakeholder’s contribution, to analyze if the event will help them get what they’re looking for. To do this, find answers to the following questions:
- Who is involved?
- What is their contribution, or rather, what’s at stake?
- What are their expectations?
Answering these questions accurately will validate your event pricing. You can estimate the value your event will offer various stakeholders and justify the pricing strategy chosen.
3. Know Your Revenue Goals
Evaluating your current and future business revenue goals is essential to creating the perfect event ticketing pricing strategy. It helps you set event revenue targets, which guide you to develop a financially viable pricing strategy.
You’ll establish how much revenue you need to generate from your event ticket sales to make it profitable.
4. Estimate Ticket Price
Once you know your target audience, your event’s value, plus your revenue goals, it’s time to calculate your numbers. Knowing your numbers gives you an optimal ticket price estimate you can work around. This will ensure the pricing strategy you come up with is in line with your financial goals.
You must first establish your break-even point to estimate your event’s ticket price. This requires you to work out the total cost of your event so that you can identify the minimum number of event ticket sales or attendees you need to cover all expenses and break even.
When calculating your event costs, consider all fixed and variable costs, including venue rent, marketing, staffing, catering, refreshments, etc.
Calculating Break-Even Cost
With a comprehensive understanding of your event costs, you can calculate your break-even cost using the following formulas:
Number of event tickets you need to sell to reach your break-even point = Fixed costs (Sales per unit – the variable cost per unit)
Say your event’s total fixed cost is $10k, and the variable cost is $4 per unit (per ticket). If you price tickets at $15 each, you’ll require around 909 tickets to break even.
= $10,000 ($15 -$4) = 909 event tickets
Amount of ticket sales you need to reach your break-even point = estimated ticket price per unit x number of tickets required to break even.
In our case, this would be:
$15 x 909 = $ 13,635.
You’ll have to sell around 909 event tickets or reach a minimum of $13,635 (total production cost) in ticket sales to get to your break-even point before you start making any profit. Once you have such estimates, you can adjust them to create an event pricing strategy that drives maximum profit.
Generally, lower ticket prices are more attractive and require you to sell more tickets to break even. Higher ticket prices are more exclusive but require you to sell fewer tickets.
Estimating the ticket price for your event in this step will help you choose the most fitting ticket pricing strategy in the next step.
5. Choose a Pricing Strategy
Choosing an event ticket pricing strategy can guide you to create the most fitting pricing approach for your specific event business. Here are the top event ticket pricing strategies that almost all event organizers, event planners, and event managers rely on to hold successful events:
Value-Based Event Ticket Pricing Strategy
A value-based pricing strategy requires you to set the actual price for your event based on what your target customers are willing to pay. With this approach, your pricing depends on the interests and preferences of your potential attendees.
You cannot set higher ticket prices, even if your event warrants it unless your target attendees’ data guides you to do so.
The best part about this pricing strategy is:
- You’re sure your target audience will purchase tickets, and you’ll have a successful event.
- It boosts customer loyalty, so you know your current customers will likely attend future events.
- It helps you refine your customer profiles. You can then create an event pricing approach that serves all customer profiles better. For instance, you could introduce a VIP section and sell VIP tickets to cater to those willing to purchase higher-priced tickets. Or have tiered ticket pricing for those buying regular tickets (more on ticketing options below).
Cost-Based Ticket Pricing Strategy
Cost-based pricing is one of the most conventional event pricing strategies. To use this strategy, you’ll have to consider your event’s total costs and break-even point to find the minimum amount you can charge for each ticket. Then, markup your minimum ticket price based on how much you’d like to profit from the event to get your actual price.
Competition-Based Event Pricing Strategy
Also known as competitive or competitor-based event pricing, this ticketing strategy focuses on the existing ticket rates of similar events. You use your competitors’ prices as the yardstick for setting your own prices. Depending on the value of your event, as identified under step two, you can establish a lower or higher ticket price than your competitors.
You can also choose to offer the same prices as your competition.
Dynamic Ticketing Strategy
Dynamic event pricing, commonly referred to as demand or time-based pricing, is a flexible strategy for pricing tickets. Your event ticket prices fluctuate based on your customer and overall market demand.
Most event managers who use this strategy rely on algorithms to monitor demand, competitor pricing, and other market-changing factors to shift their prices. They then match what their potential attendees are willing to pay when they’re ready to purchase tickets.
6. Offer Various Ticketing Options
Setting up multiple ticket types is crucial to creating a pricing strategy fit for everyone. Here are a few ticket types to to help you make the most from your events, whether you're holding an in-person, virtual, or hybrid event:
Early-Bird Tickets
Early bird pricing gives participants discounts when they buy your event’s tickets early. Often, potential customers rush to take advantage of early bird discounts before prices hike.
VIP Tickets
VIP tickets are higher-priced tickets. They cost more but provide access to additional, exclusive experiences, like VIP lounges or a meet-and-greet with the keynote speaker or artist. Some of your target customers may prefer such experiences to meet their networking goals.
Bundled Tickets
These offer a percentage discount when groups of attendees make a bulk ticket purchase. These are great if you’re looking to appeal to families or group of friends who’d like to attend an event together.
Tiered Tickets
These tickets enable attendees to curate their experience. Potential customers can select how much access they want for the event. An all-access ticket would allow them access to the event and any exclusive perks. Other ticket tiers would limit their access.
Add-On Tickets
With add-on tickets, regular attendees can pay additional charges for additional access. They allow you to let customers get a feel of the event before upgrading to a better, vip-like experience.
Free Tickets
Excluding premium event features: Free tickets for a virtual event are perfect if you’re aiming for high attendance so you can increase brand awareness. You may charge premium amounts if a participant wants access to premium event components, like key-note speaker sessions.
Pay-What-You-Can Tickets
Like free tickets, this option works well for companies looking to reach attendees from all walks of life in the masses. You can also modify this option into a sliding-scale ticket purchase system.
Swag Bag Ticket
Attendees pay a fee in exchange for a goodie bag containing company swag or digital rewards like online gift cards.
Access by Donation Tickets:
For this option, you offer a suggested donation amount so attendees can see the event’s value but allow them to choose how much they’d like to pay.
7. Develop Strategies for Selling Tickets
Your event ticket pricing strategy won’t be complete if you don’t include a plan on how you’ll market and sell the tickets. You can use various online or offline marketing channels to promote and sell your event tickets.
Selling Your Event Tickets Online
Selling event tickets online makes it easy for potential customers to purchase tickets while freeing up administration time on your end. A few online marketing channels that are perfect for advertising and selling event tickets include:
- Your Website – you can advertise your event on your site’s home page (or a dedicated page) using relevant, attractive images and including links potential attendees can follow to purchase tickets. You may have to partner with third-party event registration platforms for this.
- Email marketing – promote your event to your previous attendees by emailing your customer database. Ensure you include links they can click on to purchase tickets directly from the emails you send.
- Social Media Marketing – almost 89% of event planners maximize the power of social platforms to promote their events. As an event manager, you can follow suit. Social media marketing is an affordable way to reach your target audience in large groups. Create promo codes to push your ticket sales on various social media platforms.
Selling Your Event Tickets Offline
Offline, market your event through billboards, the local press, radio, and other traditional print media, like flyers. Remember to offer directions on how clients can get their tickets for the event on all advertising materials. If you’ll sell the tickets at the door, make it clear. Also, leverage word-of-mouth marketing by asking your event sponsors and partners to get the word out to their networks.
Conclusion
Creating an event ticket pricing strategy is essential to effective event planning. Our guide will help you develop and implement the best pricing strategy that makes sense financially and benefits all parties involved.
When implementing your strategy, remember to track the number of tickets sold and adjust your pricing model to ensure you achieve your revenue targets. You may require an event registration software to help you with this. You’ll be able to tell how many tickets you have left so you can introduce last-minute ticket offers to increase ticket sales.
As an event manager, you may also need event management software to simplify tasks, especially if you host events in different venues. If this is the case for you, an efficient venue management platform, like Perfect Venue, may be your best bet. Watch a free demo to see how it works.
