4 Dynamic Pricing Myths Debunked

October 27, 2021
Author
Kathryn Quinn
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We know switching up your online strategy for your ticketing business can seem daunting, but partnering with the right experts to guide you through the process to unlock untapped revenue is the key. We’ve been helping ticketing businesses maximize their online revenue for over 15 years with strategically created dynamic-priced ticketing plans and have heard all the concerns in the book regarding switching to dynamic ticketing. If you’re considering dynamic pricing and share common concerns, give us a chance to debunk popular myths about the dynamic pricing world. 

Belief #1: “Dynamic Pricing will erode my yield”

Debunked: Implementation of a dynamic pricing strategy to drive pre-sales actually enables many of our partners to increase their yield, as they get rid of “unfenced” discounts (think a Groupon that can be used any time) and maximize revenue on their best days. Many of these unfenced discounts end up getting used by customers on peak days, leading to low yield on days that should really be the most profitable. By eliminating these types of discounts, offering the right price for the right person at the right time, and driving visitation and revenue with dynamic pricing, yield can actually rise. Our partner Gulf Island Waterpark saw per cap in their first season of dynamic pricing increase by 38%.

Belief #2: “My customers won’t know to buy this way”

Debunked: Don’t knock it ‘till you try it. From airline tickets to hotel rooms and sports tickets, customers are used to paying a different price depending on when they purchase, the date they want to travel or visit and the popularity of that date. While we’ve heard this concern many times, our partners are often surprised to discover that customers are actually used to buying this way, and their experiences with purchasing in other industries make adoption seamless. More importantly, part of a successful implementation of dynamic pricing for pre-sales is clear customer communication. If customers are regularly and clearly told that the price they pay varies day to day, and to always “buy in advance and save” if they want the best value, they quickly adapt to dynamic pricing as the norm. Communication and messaging of dynamic pricing strategies through your marketing, email and site experience is something our team can help with during the implementation process.

Belief #3: “My customers might be upset if they paid a different price from someone else”

Debunked: Similar to the point above, if resorts clearly and regularly communicate with their customers about how dynamic pricing works, customers’ expectations will align with their strategy. As long as a customer understands why they paid the price for their ticket (when they bought, and the date they bought for), they are unlikely to be upset if the customer next to them in line paid a different rate. For comparison, if you pulled into the parking lot and booked your hotel the night of your stay, would you be upset that the customer who booked three weeks earlier got a better deal? Likely not. In addition, customers at a ski resort or amusement park at any given time are likely to have paid different rates from one another already between group sales, season passes, comp tickets, “bring-a-friend” deals, etc.

Belief #4: “I need one system to do everything”

Debunked: While it is tempting and rationale to desire a single technology system to handle all of the needs across your resort or attraction (e.g. ticket sales, CRM, POS, birthday party sales, accounting, etc.), the reality is that you won’t get best-in-class for each of your needs if you rely on a single system. Modern technology is built to enable companies to stitch together best-in-class components so they can get the optimal solution for their specific situation in each category. At our company, we use Google for email, Microsoft for productivity, Slack for communications and Salesforce.com for CRM. The quality of individual solutions that each of these provides far outweighs the ease of using the same tools from one vendor like Microsoft or Google. And with light integration and process change these tools work.

Overall, when a dynamic pricing strategy is implemented carefully and strategically, both businesses and their customers will see great results. 

Surprised by these debunked myths and want to learn more about how your business can benefit from dynamic pricing? Send us a note at partners@catalate.com to learn more.