Setting the prices too high may cause a lack of attendees, and setting them too low won’t let you reach the break-even point of the event. Every event organizer should learn the gentle art of balancing the price of the ticket between the budget and VIP solution. Keep reading for tips on how to master event ticket pricing and how to master this trick.
The math is rather easy. First, you must consider how much this all will cost you. Budgeting is one of the most important steps in event planning.
Calculating the cost of an event includes some obvious elements like:
However, there may be some hidden costs associated with calculating the total cost of an event. For example, the time of all engaged employees. Organizing an event is different from your employees’ everyday job duties. It takes a lot of resources and cross-department cooperation in order to successfully organize an event; time and skills are valuable. In this case, you have to include the time in which your employees work on an event into the total event cost.
Summing it all up will show you the absolute minimum that you must cover in sponsor and partner fees and tickets. This is considered the break-even point. It’s also good to divide the costs into two categories – the ones that are fixed, and those that can be adjusted. It will be important later if your ticket price won’t meet the point where you break even, and you’ll have to get more creative on budget cuts.
The next component of event ticket pricing is the profit margin that you add to the overall cost. Simply put, this is how much do you want to earn by organizing a particular event. Add this value to the event cost calculated in the previous step.
The last key factor in pricing tickets is the estimated audience volume. Consider:
Use a true analysis to calculate your audience with these steps:
(event cost + profit margin)/ticket sales quantity = basic ticket price
And there you have it – the zero point to calculate the right price for the ticket that will both cover the event cost and leave some extra dollars in your pocket.
While the above are the basic components in ticketing, there are some ticket pricing strategies to consider.
Once you know your specific event numbers, you should implement other ticket pricing strategies and adjust the price when considering other factors. First, do some competitor research by checking out similar events and their ticket prices. Search for the events like yours, with similar:
Make sure that the event was either sold out, or had great success regarding registrations to live-day attendees. If the attendance rate was low, this event is not one of the competitor ticket prices that you want to benchmark with.
Don’t forget to compare the value proposition, the date, and the brand audience profile to settle your event ticket prices on the affordable, yet appealing level. It’s important to do so because some factors may vary. If your company aims at the VIP sector, don’t give them budget prices. There’s a fine line in balancing the event ticket prices to the level of “just right.”
Finding the sweet spot between “too cheap” and “too expensive” is crucial when it comes to event ticket prices. An event ticket pricing strategy that's “just right” should represent its value to all potential attendees. It should also at least cover the event cost if you are aiming to meet other goals other than your financial goals. In the perfect world, selling event tickets should leave you with some extra money after you cover the overall event cost.
The price-value correlation is a very important ticket pricing strategy. Depending on your audience, the event value may vary. People will evaluate your event according to their personal taste. If you give them overpriced tickets, then the math is simple: people will not want to buy the tickets, and no one will show up to the event. Surprisingly, the same happens when you underprice the tickets; people will perceive it as something that is not worth their time, or even a scam. The price may also even indicate the acclaim of the event and become a clincher to some attendees.
The answer to the question of how much should my event ticket cost is: it depends on how valuable it is to your audience. People are looking for the events that are worth their price.
There are some other factors that may affect the popularity of your event, such as its time and date. Your event may be happening simultaneously with another event that may be attracting part of your audience. To avoid this from happening, take a look at the events that will be hosted in your area two weeks before and after your event. If there aren’t any events quite like yours in the same time frame, then you’re good to go. However, if any other event occurs that may attract part of your audience, you may want to check your value proposition and rewrite it a bit. Good news is, you won’t have to top the offer of the competitive event; you’ll just have to make it as appealing to your target audience as possible (that’s why it is crucial to know who they are).
Another important ticket pricing strategy related to your audience is if there are any groups especially interested in your event. If so, you may consider making a special discount for these groups. You can easily do it while still keeping the event ticket prices profitable. It’s good to remember that these people may become your promoters. For example, after buying tickets, they may tell their friends and colleagues about the event, and even convince them to join the crowd. As a result, more tickets are sold!
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