“Dynamic pricing is only for profit driven organizations. It won’t help us reach new audiences or build lasting relationships with our communities.”

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Arts organizations need income in order to operate and bring their unique value to audiences and communities. Historically in the UK this has been generated through a combination of national or local government funding, philanthropic giving and earned income (i.e ticket sales). With a 16% real terms cut in arts funding since 2017, the shortfall needs to be picked up for the cultural sector to continue doing their vital work. Philanthropy in the UK is not as strong as in North America and although it has trended upwards since 2018 evidence shows that we can’t rely on this. The area where organizations have most control is their earned income.

Maximizing this is fundamental to survival. 

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Increasing ticket revenue supports all organizational goals whether that is better-paid artists and staff, higher production values or more community and outreach work. Without financial stability, organizations and the value they bring for their communities is at risk.

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“Dynamic pricing isn’t good for audiences, they won’t respond well…”

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• When implemented transparently and fairly, dynamic pricing is accepted by audiences as it reflects market realities and provides opportunities for better deals. DynamO has helped organizations to introduce dynamic pricing successfully across millions of tickets across Europe, UK and US without receiving negative feedback.
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• Well-set dynamic pricing can include cheaper ticket options. Buyers can benefit from lower prices during periods of lower demand, making events more accessible to a broader audience. 
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• Dynamic pricing can, and should, be combined with membership programs, early-bird pricing, and discounts/coupons, to allow you to reward loyalty, and ensure that no barriers are put in place for harder to reach communities.

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Anna Hetényi, Head of Ticketing at Müpa (Palace of Arts), shared her experience with combining dynamic pricing and their established loyalty program:

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"DynamO implemented their dynamic pricing solution with maximum flexibility, fully accommodating our specific needs at Müpa. They seamlessly integrated their system with our well-established loyalty program, allowing us to preserve its benefits for our loyal customers. For instance, during our pre-sale periods, we offer tickets at fixed prices, and once these periods end, we switch to dynamic pricing. This approach has enabled us to maintain customer satisfaction while optimizing our revenue through a tailored and adaptable pricing strategy."

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“Dynamic pricing is just about increasing prices, it’s not fair on the audience”

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• Smart dynamic pricing adjusts prices based on demand and other factors, it’s not simply designed to increase ticket prices as far as they can go. It's used to optimize both sales and attendance, often resulting in better deals and cheaper tickets for the audience which can support your organization to grow your audience base. Well-differentiated dynamic pricing allows organizers to offer cheaper tickets than ever before. For example, the Palace of Arts in Budapest offers lower-priced tickets as they can offset them with higher prices for more popular seats.
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• Ticket buyers willing to buy early or during off-peak times can secure better prices and you can engage your members or other loyal attendees to help them understand this. Event organizers should use transparent communication, controlled maximum prices, and avoid unethical tactics like pressuring hesitant customers. DynamO encourages clients to be transparent about their dynamic pricing strategies and never uses pushy tactics. Prices are primarily determined by demand and its pace.
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• Transparency in pricing strategies is crucial, and reputable sellers make it clear that prices may fluctuate based on various factors. Additionally, tickets placed in the basket do not change prices, and any additional fees (e.g., handling or convenience fees) are separate from dynamic pricing.
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• The decision to keep low-price tickets is up to the ticket inventory owner, but DynamO always recommends including affordable options. More expensive tickets can offset the revenue lost from cheaper ones. Initial ticket batches may also be sold at reduced rates, and prices can decrease for events that are not selling as expected.
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• Dynamic pricing can make tickets available at lower prices during initial sales or off-peak times, benefiting budget-conscious buyers. Increases that are applied should be small and incremental, rather than huge differences that will shock and annoy. A small difference is acceptable to an individual buyer, and cumulatively over time these can make a big difference to the financial stability of the organization.

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In contrast to the belief that dynamic pricing simply increases ticket prices and locks out some audiences, it can be the key to understanding the true market value of your ticket inventory, and being able to price strategically. As part of a well-rounded pricing strategy, you can maximize ticket revenue and make tickets available to the widest possible audience at the same time.

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Recently, the highly anticipated reunion tour of the iconic UK band Oasis has captured the attention of music fans worldwide. With the buzz surrounding their return, the demand for tickets has been through the roof. Unfortunately, the ticketing experience has left many fans more than disheartened, thanks to an avoidable problematic implementation of dynamic pricing.

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What Went Wrong?

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The crux of the issue lies in the use of dynamic pricing, a strategy where ticket prices fluctuate based on demand. While this approach is often beneficial in optimizing revenue, it can also lead to significant consumer frustration if not executed properly.

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Here’s a breakdown of the key problems:

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Lack of Communication: The promoter and ticketing company failed to adequately inform customers about the use of dynamic pricing. Fans were caught off guard when they encountered unexpectedly high prices—up to £350 for a ticket that started at £150. This lack of transparency eroded trust and led to widespread dissatisfaction.

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Long Queue Times: The combination of massive demand and dynamic pricing created extraordinarily long waits in online ticket queues. Fans were frustrated by the extended periods spent waiting, only to be shocked by inflated prices once they reached the front of the line.

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This shock quickly tuned into heightened stress caused by a checkout timer presenting people with just a handful of minutes to decide if they wanted to pay significantly higher prices for their tickets - and with it significantly higher fees charged by the ticketing company.

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Failure to Manage Expectations: Without clear communication and proper management of expectations, the dynamic pricing model became a source of discontent rather than an effective tool for managing demand and increasing revenue.

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Why These Problems Occurred

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These issues stemmed from a failure to follow essential procedures and protocols when implementing dynamic pricing:

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Defining Objectives: Understanding the objective behind dynamic pricing is crucial. Is it to maximize revenue, manage demand, or both? In the case of the Oasis tour, it seems this objective was not clearly communicated or managed effectively.

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Assessing Suitability: Dynamic pricing should be chosen only if it aligns with the goals of the event and the expectations of the audience. For high-demand events like the Oasis tour, it’s vital to work out if dynamic pricing is the right tool for the job.

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Setting Base Prices and Parameters: Establishing a fair starting price and appropriate parameters for price fluctuations is essential. If the base price is set too high or the range of price changes is too extreme, it can lead to consumer shock and dissatisfaction.

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Effective Communication: Transparency is key. Clear communication about how dynamic pricing works, including potential price changes and queue expectations, can prevent misunderstandings and build trust. ‍

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Terms and Conditions: Comprehensive and clear terms and conditions help set expectations and provide consumers with necessary information about pricing changes and ticket availability.

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Ethical Considerations: Ensuring that pricing practices adhere to ethical standards and consumer protection rules is vital. This includes avoiding exploitative pricing strategies and ensuring that the process is fair for all customers.

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The Right Way to Implement Dynamic Pricing

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When done correctly, dynamic pricing can be a powerful tool. Imagine it like a skilled chef adjusting the seasoning of a dish based on the taste of the diners. If the chef understands their ingredients and the preferences of their guests, they can create a balanced, enjoyable meal. Similarly, dynamic pricing, when implemented with precision and care, can meet both business objectives and consumer expectations effectively.

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Conclusion

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The Oasis ticketing debacle highlights the importance of following proper procedures when using dynamic pricing. By defining clear objectives, communicating transparently, setting appropriate prices, and adhering to ethical standards, dynamic pricing can be a valuable asset rather than a source of frustration.

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You would think and hope that the promoter and the ticketing company for the Oasis tour would have these procedures and protocols in place. Oasis themselves are distancing themselves from  who was to blame and the promoter and the ticketing company are pointing fingers at each other.  Perhaps it was all a mistake. Perhaps they all knew what was going on. I'll let you decide.

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No Oasis lyrics were used in the creation of this article.

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We are pleased to announce our new partnership with Soho Theatre, marking a milestone in our efforts to help the performing arts sector engage fill more seats and drive-up ticket revenue. This collaboration with one of London's key cultural venues is a significant development in our mission to revolutionize pricing strategies in the performing arts.

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Dynamic Growth - Soho Theatre's Strategic Expansion into Walthamstow

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Located in the heart of London’s West End, Soho Theatre stands out as a premier venue showcasing a diverse range of theatre, comedy, and cabaret. Since its establishment in the early 1970s from a former synagogue, the theatre has grown into a cultural powerhouse with three performance spaces, attracting over 180,000 audience members each year. Originating from the ground-breaking Soho Poly Theatre, it remains at the forefront of promoting varied and provocative works. This year, they are set to expand their reach with the opening of a new 1000-seat venue in Walthamstow, broadening their capacity to host larger audiences and more ambitious projects.

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Advanced Pricing Strategies at Soho Theatre

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We’ve integrated DynamO’s dynamic pricing engine with the Spektrix CRM and ticketing system, which will now allow all Spektrix clients to activate our dynamic pricing solutions effortlessly.

In this initial phase, we've launched our service across more than 100 performances at Soho Theatre. We’ve worked closely with the team at Soho Theatre to review their current processes and refine their pricing strategy. Having fully understood their needs and ambitions, our pricing expert, Dr. Pal Danyi, we’ve supported them to make adjustments tailored to meet their unique needs and optimize outcomes.

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Risk-Free Innovation: How Soho Theatre Implemented DynamO’s Pricing Solution

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Mariko Primarolo, Head of Sales and Ticketing at Soho Theatre, commented on the partnership:

“It has been good working with DynamO Pricing and we have found the team responsive and supportive throughout the onboarding and development process. Dynamo have consistently gone the extra mile to problem solve quickly and efficiently. We are currently piloting the programme, having been interested in the dynamic approach to differing dynamic pricing strategies. The business model, with no upfront fee, was also a draw allowing us to pilot the programme to see if it works with Soho Theatre’s unique programming style.”

"Soho Theatre has been manually adjusting their ticket prices for years. Automating this process significantly enhances their operations, given their deep understanding of show attendance and revenue expectations. Their audience is already accustomed to variable pricing, so this transition will feel seamless and natural"

remarks Dr. Pal Danyi, CINO of DynamO Pricing.

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Bridging Tradition and Innovation: How DynamO Pricing Supports Culture

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Bence Marosi CEO of DynamO Pricing highlights the company's deep connection to the performing arts, embracing bothits for-profit and non-profit dimensions.

"Originating in Hungary, DynamO understands the importance of maintaining excellent audience experiences in the arts sector while smoothly transitioning venues and organizers to evolved pricing strategies"

he states.

We look forward to expanding our dynamic pricing services throughout Soho Theatre’s programming. We believe this partnership will positively impact audience engagement and revenue, as it has with our clients in other countries. This collaboration underscores DynamO's dedication to equipping arts organizations with the necessary resources to thrive in a challenging environment.

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Want to learn more? Get in touch with us today to explore how we can specifically assist your business. You can reach us through our website's contact forms or simply send us an email at info@dynamopricing.com. We look forward to hearing from you!

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