February 4, 2020Jennifer Sowinski
In 2017, the team at Children’s Theatre of Charlotte recognized a growing need to better understand the company’s pricing and sales data. They engaged JCA Arts Marketing in a pricing study to answer three main questions.
JCA Arts Marketing completed a pricing study for Children’s Theatre of Charlotte in the fall of 2017, presenting analysis on sales and pricing trends for both subscriptions and single tickets, an overview of trends in customer behavior, and an examination of the seating choices made by patrons in each venue. Included in the study were recommendations for pricing, scaling, and dynamic pricing.
What did they learn?
Children’s Theatre of Charlotte’s staff identified five key takeaways from the pricing study.
What came next?
Armed with these findings, the Children’s Theatre of Charlotte team focused on areas with maximum potential to increase revenue. The team increased prices for all performances beginning in the 2018-19 season, and increased prices even further for popular, high-demand shows. To help balance the price increase for cost-conscious customers, they adjusted the scaling of the venues to a pattern that more closely followed demand, and which increased the number of seats in the lower priced sections by over 40%.
In addition, the Children’s Theatre of Charlotte team modified their dynamic pricing strategy. Previously, they implemented a single, small incremental increase when a performance hit a capacity threshold. Under the new strategy, they would increase prices for a performance up to three times in slightly larger increments than before, based on both the capacity sold and the velocity of a performance.
What were the results?
One of the biggest concerns for staff while implementing these changes was the potential for negative reactions from their audience members due to the increased prices. But, Cindy Taylor, Director of Marketing and Communications, reports that the process went smoothly:
“The rollout of the new pricing structure was not met with any resistance. We did not hear of any complaints from customers and overall it was a seamless process. The revised inventory of seats may be attributed to making that new pricing rollout a success. We were still able to provide patrons with affordable options when purchasing.”
Cindy also noted that the high-demand pricing structure significantly impacted the financial success of the shows for which it was implemented.
The dynamic pricing changes also had a positive impact on revenue. In 2018-19, dynamic pricing changes impacted 80% of performances, and the incremental revenue made from dynamic pricing was an increase of 200% from the year before.
Since 2018-19, the Children’s Theatre of Charlotte team has continued to fine-tune their pricing strategy. They are in the midst of planning small adjustments to their dynamic pricing for the 2020-21 season, which will provide another boost to their incremental revenue for future seasons.
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