Baker Richards
Center Theatre Group (CTG) runs two venues as part of the Los Angeles Music Center in downtown Los Angeles: the Ahmanson houses mainly long-run musicals, and the Mark Taper Forum runs more serious drama. It also had a studio space, the Kirk Douglas Theatre, in Culver City. The Pricing Institute, in association with Alan Brown, undertook an extensive programme of data mining, segmentation and pricing analysis, and strategy work, to explore opportunities for audience development, and for increasing ticket, donor and membership income.
CTG has taken that work forward in a number of areas, but perhaps the most innovative is its integrated approach to pricing, sales promotion and donor development in the Mark Taper Forum. Despite a capacity of only 800 seats, CTG has divided the auditorium into 38 zones, shown on the right, and then has set different ‘business rules’ for each of those zones using Tessitura functionality. The zones are aggregated for single ticket prices, into three main price breaks (increased from two previously, and configured with the aid of The Pricing Institute’s Hotseat Index™, which shows demand and income for each individual seat in an auditorium). The leap in thinking has been to define the most popular seats and apply business rules initially that allow those seats to be sold only to long-term subscribers. If any seats are released, they are made available to the development department as an incentive to high-level donors. Rules are also established for the location and release of ‘holds’ as well as identifying the less popular seats for sales promotions.
The rules allow for discounting on those seats, but also for dynamic pricing to increase the face value of the very best seats.
CTG’s new approach was first trialled on the opening production in the current season, ‘The Lieutenant of Inishmore’, yielding an additional $90,000 on that production alone.
Creating first class experiences
Opportunities for increased income also arise from bundling added value to create premium packages. This approach had an interesting knock-on discovery for Malmö Opera. The Opera was promoting premium tickets for a successful production, which included dining in the Opera’s excellent restaurant. However, they discovered that many customers were surprised to discover on arriving for the performance that they received a meal as well. This demonstrated that ticket prices were much more price inelastic than they had ever dreamed.
Baker Richards has been retained by Birmingham Hippodrome over a number of years, helping it to achieve continual growth in ticket revenues, and now examining other areas including ancillary sales. The Hippodrome has created a range of Premium packages, which in some cases are allocated to specific seats in order to maximise income from the best seats for peak performances. It has also had a membership scheme in place for some time, and the opportunity now is to look in more detail at the structure of these schemes, focusing on the margins offered by bundle components in order to ensure maximum profitability from each sale.
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