Ask Me Anything: Comps
Ask Me Anything Question
“Some people on our staff and board believe that comping people in (particularly key community members) will incentivize them to come, love what they experience, and become regular patrons. Is this a good strategy?”
Timmy Metzner's Answer
How much is a cup of coffee at Starbucks? Could you get a cheaper one elsewhere? Probably, but the executives at Starbucks have decreed that is the value of the coffee there, and people willingly accept that. How much are concessions at the movie theater? Wildly expensive, yes, but also a known market price.
This is what we call “anchor pricing,” or setting an established value as your starting point. Because of differentiated pricing, new patrons, or discounts, it’s probably unlikely that there is a commonly held anchor price for your organization. However, a patron’s first purchase will inform their anchor price moving forward. Because that is the case, comps are a dangerous anchor price.
Consider apps in the app store. You think twice about paying for one, right? That’s because you’ve gotten free ones plenty of times, and that’s your anchor price.
We’ve done some analysis with a prominent regional theatre and uncovered some shocking facts about comps. Only about 25% of patrons who receive a comp for their first performance ever returned. Papering didn’t create loyal or longtime buyers. Furthermore, of patrons who received a comp for their first visit, only 6% paid for the next performance. The rest continued to attend only through comps. However, around 70% of patrons who paid first, then received a comp, ended up returning. And not only returning—nearly 40% of these patrons paid for their return visit. So, comps can serve an important and critical purpose, but perhaps they shouldn’t be the first introduction to your performances.
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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.
Timmy Metzner, Senior Consultant
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