Price and Audience Perceptions
The value of the arts is frequently underestimated, and this sometimes results in the thinking that if we offer lower prices then we will sell more tickets. But that isn’t necessarily the case...
For many potential customers price is strongly related to quality – but the use of price as an indicator of quality depends on a few factors:
- Availability of other indicators of quality.
- Price variation within a group of similar products.
- Product quality variation within a category of products.
- Level of price awareness of consumers, and
- Consumers ability to detect quality in a group of products.
‘The tickets cost me a fortune but it was worth it’
Both first-time and regular attenders are attracted by the overall experience and not just price alone.
A big influence on how a customer perceives the value of an event is their experience and knowledge of previous visits. Here lies the difference between a regular and first time attender.
A regular attendee can make comparisons of relative value – between the different artists/productions, the values of different parts of the house, and so on. In-frequent attenders are more likely to use price as a proxy for value (i.e. a high price equals a guarantee of quality).
Lower prices can help overcome the perception of risk involved for someone trying a new artform for the first time, but a low price may also suggest lower quality. ARC Stockton helped minimise perceived risk with their ‘Pay what you decide scheme’. Schemes like this allow customers to choose their own price after they have attended - based on the quality and value to them individually.
Here are some tips to make sure that your pricing reflects the quality of what you offer, but doesn't put potential new customers off:
Understand your value
What is the value you offer, and where could customers go to find the same value elsewhere? Think about what your customers various motivations are for coming to you. Are they coming to see a big name artist, have a fun night out, be emotionally moved by music, challenged by risky theatre, or experience a beautiful venue?
Create extra value
Cost and the core product are not the only factors that decide value – other factors include the nature and quality of the core product, perceived scarcity, its status in reviews, the venue itself, atmosphere, catering and other add-ons. The Stella Cinema in Dublin charges above average for their tickets but offers comfy armchairs and couches, hot food served before the film and a ballroom upstairs which has been converted into a cocktail club.
Your marketing messages should be audience-focused rather than product-focused. In the arts it is often assumed that potential audiences or visitors will understand how the features of the product meet their needs and thus have value. Tell your audience about the emotions they’ll experience at a night at the theatre, or that they can spend a stress-free afternoon at your family-friendly museum and café.
To capture value you need to have an appropriate pricing strategy. Differentiating your prices allows you to offer a wide variety of price points to reflect that variability in perceptions of price. Implementing a sophisticated pricing strategy gives you the opportunity to maximise both access and income – those who are willing to pay more for what they value highly.
It is a common assumption that to get more people to attend the arts, tickets should be made cheaper or even free, but this isn’t necessarily the case. As this article from Colleen Dilenschneider demonstrates, free admission has little impact on increasing the numbers of new attendees.
Cultural consultants Baker Richards also make a valid point: when it comes to pricing low or giving away free tickets is that really the message we want to send out to people? That there is no value? – Price can become a much less significant factor in understanding what motivates people to attend or visit and then create and communicate the relevant value to meet those needs.