Last minute discounts
Literally the first thing I remember reading about arts management, in the first book I ever picked up when I wanted to open a theatre, was in a section entitled “Fifteen fabulous ways to infuriate your community.” It reads:
“Sell single tickets for $20-$40, then offer free tickets to your friends and others in the community at the last minute.”
For whatever reason, that really resonated with me as something I’d never considered before. (Granted, at that point in time, there was a lot I’d never considered before). Expounding upon it, I realized that it’s also unfair to discount late in the process because it punishes your most loyal customers who bought their tickets early.
To my recollection, Music Theatre of Madison has never offered last-minute discounts for our shows (though I was certainly tempted). The reason is that it sends a distinct message: “We’re not selling well.” And while that’s certainly been true for us at times, the last thing I want to do is let our patrons, donors, and current audience members to know that. If they want to come to the show and notice that it’s not well-attended, then fine. At least they bought a ticket.
Before I continue…
Let me just say that I fully understand the urge to discount. When a show isn’t selling well, it sucks. It’s personally painful, financially scary, and incredibly frustrating. It doesn’t matter what size theatre you work for or where you fall in the staff or volunteer heirarchy; tickets not moving is just the worst. I get it. I want to share insights on why last-minute discounting is not the answer, and what you can do to prevent that path.
When the money isn’t rolling in
Why you’re not selling well can be due to a variety of factors, some of which may not be your fault. Maybe the weather has been terrible. Maybe the weather has been too beautiful to be indoors. Maybe you’re going up against a zillion other things (as is usually the case where I am in Madison, WI). Maybe something terrible happened in the world and people don’t feel like going out. Maybe a bad review came out that wasn’t deserved.
Or maybe it is your fault. Maybe you didn’t do your due diligence with your marketing efforts. Maybe your price point is in fact too high. Maybe it’s a tough show to sell and you didn’t apply effective strategies. Maybe it’s not very good. (All of these things have been the case with shows I’ve worked on, and I readily admit it.)
Whatever the reason, offering a last-minute discount seems to be the overarching solution. Lately I’ve seen a lot more of it, coming to my Facebook feed and inbox from all breeds of theatres, ranging from local community groups to the New York Metropolitan Opera. I’ve seen a large organization send out a discount and money-back guarantee in response to one lukewarm review from a major paper (in a sea of other great reviews). While that may fill the seats, how can you be certain that people aren’t just taking advantage of the discount when they haven’t even seen the review, and might have planned to attend anyway? Only through qualitative feedback which, in this instance, is not enough to justify giving the community the impression that you’re panicking.
Peeking behind the curtain when these discounts are offered, we can ascertain one or more of the following:
- Price points are set too high
- There is a problem with demand.
- People are panicking in response to criticism.
I don’t want to delve too deeply into those things at this moment, because they really are so specific to the theatre that’s facing them. What I want to address is the message it sends to your customers when you offer these discounts so late in the process. Essentially, you’re applying a short-term solution but hurting your company’s long-term image. Particularly if you repeatedly offer discounts late in the game.
We are not retail stores
JC Penney attempted a re-branding in 2012 that eliminated discounts altogether, but that backfired. The store discovered that consumers had a mentality of wanting to wait for a discount, and enjoyed the feeling that they’d found a good deal. Many have applied that mentality to arts organizations, assuming that people will automatically be more inclined to buy something if they can find a good deal.
The thing is, we’re not retail stores. We don’t offer discounts for the same reasons, and we can’t let people think that we can operate in the same way. We’re not open every day. We’re not doing the same volume of business. We don’t offer the same array of options. And we’re not serving the same needs. Plus, if I want to buy something at a retail store, I can go to the store, look at it, try it on or hold it in my hands, and evaluate it before I purchase it. That is not the case with arts experiences, no matter how well you market them (though I do believe a good preview can make a big difference for precisely this reason).
Conditioning people to wait for discounts makes them think of their arts experiences the same way they think about buying a sweater. But going to an arts event is not buying a sweater. Retail more often than not provides us with things we feel we need. Arts experiences offer a different kind of value; a value that a vast portion of our country doesn’t appreciate. Therefore a discount doesn’t seem like an opportunity. It seems like you’re begging.
When you offer a discount to your event at the last minute, targeting people who haven’t had a chance to evaluate the product, you send the message that your experience is less valuable than you originally thought. It also perpetuates the notion that arts organizations are irresponsible with their money, don’t understand the market, and don’t have a wide or important reach. So when you discount, you’re hurting all of us.
Unfortunately, many marketers seem to think that applying this retail mentality to tickets will motivate patrons to buy. In fact, it sends a clear message that either the price is too high or the demand is too low…and those things aren’t mutually exclusive.
What to do instead
All of this requires advance planning, careful analysis of the data you have on hand, and an understanding of what motivates your patrons. You can’t guess at this part. And that’s what too many people do. That said, there are some better options that at least send a more positive message to your audience:
- Price lower to avoid having to offer discounts. This requires really assessing whether you have a demand problem or a price problem, which can be difficult to ascertain. Assume you have both, and price accordingly. Put some thought into your pricing. Survey your audiences. Look at your past data and what the average ticket went for. Don’t assume you can bump your ticket prices higher and that your audience will just follow. This may sound basic, but when I see so many companies overshooting with their prices and offering discounts later, I have to wonder. The point is, price your tickets at what you honestly think people will pay for them, and adjust your budget accordingly.
- Discount in advance: Discounts aren’t uniformly bad and can in fact make people feel they’re getting a good deal. If you’re worried your prices might alienate some people, do a temporary discount at the time tickets go on sale. Create a sense of urgency. Reward your loyal customers by giving them an incentive to buy early. (Caveat: You do run the risk of patrons who would have paid more coming in for a lower price).
- Tier your pricing according to seating location: Provide more options. If you have a big theatre, offer lower prices to sit in the back. If you don’t have a big theatre, offer different prices for Thursdays, or matinees, to give people more options to fit their budget.
- Tier your pricing according to category: Offer student or senior prices. Same incentives apply here as in number 3.
- Don’t panic if you get a bad review: Got a bad review? That’s too bad. Did you get some good reviews too? Milk them for all they’re worth! If you think your product is great, don’t devalue it because you assume people take one bad review as gospel truth. Reviews matter, but if we cave every time we get a bad one, we’re the ones who lose.
- Price and market for the specific work you’re doing. A standard marketing and pricing template spells Doom. While you can carry over similar strategies and tactics, look at each show using your past data and really evaluate what’s going to work for this particular title or exhibit.
The Bottom Line: Do not communicate desperation.
If your event isn’t selling well, you may just have to suck it up and figure out how you’re going to make up the deficit. That blows. But what will be even worse in the long term is telegraphing to your audiences that you are freaking out and don’t understand what they want or what they’re willing to pay.
