Ask Me Anything Question
"What is sales velocity, and how do I capitalize on it?"
Jennifer Sowinski’s Answer
When we talk about sales velocity, we’re looking at sales over a period of time—often referred to as speed of sales—which includes measures like tickets sold per week or income per day. For these numbers to be useful, it’s important to consider speed of sales in context—such as how the speed of sales changes over the sales cycle, and how a current performance stacks up to historical comparators.
The most common, and often easiest way to view speed of sales information is on a sale curve.
Take a look at the curve below of five complete productions, which plots total tickets sold against the weeks to/from the start of the run. Looking at how the slope of the curve changes, there is consistently a significant increase in the speed of sales beginning one week before the start of the run. I’ve indicated that point on the chart with a dotted red line.
For the productions in gray and purple, there is also an uptick around five weeks before the start of the run, indicated by the dotted gray line. Those two productions were particularly successful, which tells us that an increase in the speed of sales around five weeks before the performance may be an early indicator of a successful show.
If we add an upcoming show to this sales curve (in red below), we again see that increase in speed between four and five weeks before the start of the run.
This upcoming production is an ideal dynamic pricing opportunity. Sales are already better than most of our comparators, and we have an early indicator telling us that this show will likely be successful. By raising prices early, we can maximize the additional revenue we can bring in, and take advantage of our potential hit show!
Do you have a question for the team at JCA Arts Marketing? Submit it here. It could be featured in an upcoming Ask Me Anything post.
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.