Price is NOT the Problem with Sean Kelly, Vatic
How do you know how to price your next show? How do you measure the value of the show to your various patrons and turn that into a ticket price? Should you be considering the cost of living crisis? Other factors lurking in the shadows?
Pricing is a tough one – regardless of industry. It is doubly hard for arts and cultural organisations as inextricably linked to their patron as they are – plus attendance hesitancy and economic pressures still rife amongst live event audiences.
In this episode, Sean Kelly, founder of dynamic pricing tool Vatic, dispels the myths and lays out the case for dynamic pricing. He explains how, while knee jerk reactions are understandable, there is a better way to think about pricing that benefits your organisation, but also makes sense to your audiences.
As Sean says, like it or not, every pound and euro counts in the arts and culture industry. We need to value our offerings correctly and allow the data to help open a pricing conversation with customers. To know what the right price is for each customer – we need to start listening to the hidden conversations our customers are having with us each time they buy a ticket.
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A big thank you to Sean Kelly founder of Vatic for taking the time to speak with us.
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About Our Guest
Sean Kelly, founder of Vatic, a software company specialising in dynamic pricing for performing arts and ticketed venues. Kelly started Vatic in 2018 after more than a decade as the head of marketing for arts organizations throughout the United States. His firm’s clients range from the New York Philharmonic and the Charlotte Symphony to the Berkeley Repertory Theatre in California and The Second City improvisational comedy theatre in Chicago.
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Lucy Costelloe: Hello and welcome to an episode of The Arts and Everything in between podcast. My name is Lucy Costello and I am head of marketing for tickets solve. Today, I’m so excited because I’m joined by my good friend Sean Patrick Kelly, founder of Vatic, an expert in automated dynamic pricing for the performing arts. And today Sean joins us in a conversation where price is not the problem. I had the privilege there of catching up with Sean in Birmingham. At the end of March, we were attending Ticketing Professionals Conference and I simply had to grab Sean and say, please, will you join me for a conversation on The Arts and Everything in between podcast? I truly believe that this is a conversation that we really need to encourage our listeners to take back to their organizations and feel, I guess, Sean empowered to start the tougher conversations internally. So welcome today and thank you. Hi, Sean. Welcome.
Sean Kelly: Hi. Thank you so much, Lucy. It’s so wonderful to be here. Thanks for having me.
Lucy Costelloe: No worries at all. No worries. Thank you so much, Sean. And I just have to say sean Patrick Kelly. What an Irish name? But you’re not joining us from Ireland or the UK today. Sean, whereabouts are you joining us from?
Sean Kelly: No, I am in Dallas, Texas, in the United States, but very proud of my super duper Irish name, although probably it doesn’t have enough consonants in it.
Lucy Costelloe: Well, I suppose, Sean, when I think of you and probably a trait that we speak a lot about in Ireland is that of storytelling. And I do believe some of the conversations that I’ve had with you, you’re very much a storyteller. So I’m really looking forward to seeing how you kind of incorporate this into our conversation today. A tough one as well. So I’m feeling a little bit like I hope I can bring something to this conversation for you as well. It’ll definitely be a challenge for me and I’ll be challenging my own assumptions around pricing in the arts and cultural sector, but, I mean, there’s no one better to be having this conversation with. When I was coming back after Birmingham, when we were in work the next week, I was scrolling through Twitter, I was on LinkedIn, and there was so much engagement around the session that you hosted on the Thursday and the Friday at TPC around dynamic pricing. And I could already see the spark of conversation and kind of the narratives that were forming. So I feel really privileged that we’re kind of able to offer an exclusive conversation and a very intimate one as well with yourself to the listeners of the Arts podcast today. I suppose for someone like myself, I know you so well and I think of you so fondly, but it would be great to kind of build that relationship with some of our listeners as well. Could you give us kind of a little bit of an insight into how we’re having this conversation around pricing today?
Sean Kelly: Absolutely. So I have two degrees in theater, and now I run a software company, so you can see how that worked out. A bit more than a decade ago, I was working at a mid sized theater in California called Theater Work Silicon Valley, and we had a holiday show called A Civil War Christmas. Now, that title may not have as much meaning for folks over in the UK, but the Civil War was really a very bad time in the United States, and having a Christmas show built around that seems problematic. But even with that unfortunate title, it sold out early, and I felt like I had left money on the table. And it’s a mid sized theater, so, like, every dollar counts. And before I worked in the arts as an arts administrator, ahead of marketing, I worked for Starbucks as a product manager. And my job revolved around gathering huge amounts of data and gleaning that data for the pertinent information so that you could build a narrative around it. You could say, here’s the story that the data is telling us. And a lot of that work also revolved around price elasticity. What should you be charging for something? And so I started looking for a solution out there that would do dynamic pricing for the arts, and I couldn’t find one. And I had left Starbucks because I wanted to use my evil skills for good. And so I had this great skill set. And so it was clear that I was just going to have to write my own algorithm, and that’s what I did. I wrote my very first algorithm back in 2009, and ever since then have been doing it as my side project besides my other real job. And then 2018, we actually launched Vatic. And all of that work was really around trying to move past the conversations that you normally have inside of an arts organization when it comes to pricing, which is Lucy and I work for the same arts organization. And Lucy has one idea about what the price should be, and I have a different idea about what the price should be. And who’s right, lucy?
Lucy Costelloe: Me.
Sean Kelly: Exactly. You are right. And you know what? I’m right too, because it’s how we feel about what the price should be. But the problem is that neither of us actually buy tickets, right? We work for the arts organization, so we get comps. It’s the least they should do, considering how hard we work. And who do we really need to hear from? We need to be able to hear from patrons, but they’re often the voice that is left out. And what’s put in place of that is a lot of assumptions about what should be happening with pricing. And I wanted to build a way for us to actually pay attention to patrons and through data to be able to look at their data. Because every time they’re buying a ticket from you, they’re actually having a conversation with you, a conversation about price, they’re actually telling you something important about what you should be charging, and you can use that data to optimize that pricing to find really where that sweet spot is.
Lucy Costelloe: Yeah, I love that. And actually, I just think there’s something about talking of numbers or it’s nearly like a dirty conversation to be having. Like, it’s not dinner table etiquette. So I find the fact that you’re actually going to be bringing pricing to the table again, it kind of goes against the grain a little bit, but I think it’s something I was actually, funny enough, Sean, reading an article yesterday about how much emotions actually play in conversations that we find very challenging. And this idea of challenging conversations and how the key to having them is actually controlling your own emotions. And if you control your emotions, you can control the emotions of the room. But emotions are so entangled within pricing in the arts and cultural sector for so many reasons. It’s not even about the price that an audience member will pay. It’s the value that they’re willing to offer to the organization. So that artistic programming, but then also the value of the work of our box office members and our marketing team and everyone who’s within this network of actually getting that show on sale so that ticket can be sold. So I do think there’s quite a lot of entanglement for kind of arts professionals and creative cultural workers within the product offering of what we’re doing. So I suppose the first thing maybe to get started on would to potentially look at kind of the current landscape. If we were to jump on like, ten different websites, what would we see in terms of the current state of pricing in the arts and cultural sector?
Sean Kelly: I think we’re obviously in a very difficult period of time for a lot of arts and culture organizations. They’re coming out of years of lockdown, and even as they started to come out, most of them didn’t come back at full scale. And so it slows down the recovery period for our clients. What we’re seeing is that it is on average, a two year recovery period. And most arts organizations came out of the pandemic and immediately said, okay, well, our budget needs to be 2019. Like, whatever they did in 2019, they were like, that’s what the budget is. But it’s not realistic to go from zero all the way back to 2019 and not acknowledge the fact that everyone’s been gone for a significant period of time. And on top of that, you still have a pretty significant portion of attendees who have social concerns. Like, they don’t necessarily want to be in a crowded theater. Those are real. There’s no way to get past them. And certainly you can’t discount to get past them. Like offering somebody a 20 pound ticket isn’t going to get them past their concerns around social distancing. They’re not going to get past it until they’re past it. And so you end up in a situation where you still have bills to pay, you still have things that need to be done and you have staff. We talk a lot about accessibility for patrons. That’s a wonderful conversation for us to have. That’s absolutely what we should be talking about. But what we often gets left out of that is we also need to be able to pay a fair wage to people who run the organization and people who work in the box office and to the artists who are on the stage. And those two things sometimes feel like they work in opposition to one another. And the challenge that we have right now, especially over in the UK, is that you guys are really in a very significant economic downturn. There’s a lot of instability, right. And the knee jerk response to that can be, well, we should drop prices, but you still have to be able to pay your bills. And all we want to be able to bring to the table when we’re having this conversation, which is by its very nature, a difficult conversation for an arts organization to have, because we want to talk about the art, right. We don’t want to talk about the business side of it. All we want to say is, hey, you still got to pay your bills. How are you going to do that? How do you offer accessibility, right? But how do you also make sure that you meet your goals? Because it does not have to be a black or white yes or no conversation. It can absolutely be the case of, here’s a set of tools right, in your pricing toolbox, and how many of them can you use to get where you need to be?
Lucy Costelloe: Yeah. Oh, I love that idea of having a toolbox or something there that, you know, in your back pocket. If it’s not this particular tool you need, it’s something else. And really yes. Building that pool of resources that will help you, because I think there’s a few things that you’ve really touched on there, Sean, with so many different things. But I have had conversations with arts managers over the past six months, and to be fair, the circumstances haven’t really changed. It’s still the cost of running a building, anyone who’s running a building, and if we just focus and think of anyone who’s running something that has a roof and walls, it has electricity, bills, everything have absolutely skyrocketed. And I have had arts managers come back and say, all we can do is hope that by lowering the price that we’re going to get more people in. And there’s this real pressure, and it’s not even a pressure that’s driven from maybe from the economy as such because ticket we know for a fact that people are returning. There is a proportional absolutely of our audience members who have not returned since COVID and aren’t motivated to return to us soon. But people are still booking tickets and we’re seeing that in the data. But for some reason we feel like in our conscious that there’s this pressure that our audience members are also seeing these constraints that we’re feeling as a venue. They’re seeing it within their household. So we need to support them. And the only way that we can do it is not to offer them this really beautiful night away or attending an Immersive experience or their favorite artist. It’s actually just by cutting price. That’s how we’ll give back to them. It’s not about the rest of the work that we do and for some reason that gets lost. I’m actually organizing a project at the moment and we’ve been looking into a topic at tickets of how can we use data during extreme crises or challenges to inform our teams better. And something that you’ve touched upon there, which we’ve kind of started to discover and we’re playing around with is these kind of business models that we’re working with in the arts. So we have kind of like the mission of our organization, which is so important and that’s really focused on our societal impact of what we actually do in the performing arts and the creative industries. And we’ve been calling that bums on seats and you might think it’s deceiving that it’s like we need to sell tickets. It’s actually not. It’s about reaching out and getting people kind of like wrapped around our organization and getting them in, getting them interacting with us. And that’s really important as well. But then we do have another model which is more of the economical business side and that one that we’re calling is it’s keeping the lights on? Because at the end of the day, we have our team that we need to take care of and we need to pay our bills. And there’s this constant tension between what is more of a priority and if we could nail it within our pricing and understand that there’s something that will kind of support all of the reach that we’re trying to do as an arts and cultural organization. Wouldn’t be wonderful if it was all nailed within pricing and we only had to have this one tough conversation internally.
Sean Kelly: Well, what most everyone is seeing is that demand is severely polarized, right? So there are a few titles that are absolute yeses, people absolutely want to see it and they’re willing, they book their tickets and those are moving at a good pace. And then there’s a whole bunch of other stuff that isn’t moving very much at all. And the challenge with the concept of, well, we’re just going to lower all the prices and hope that there’s an excess of demand that’s going to cover the fact that we’ve lowered prices is there’s about three quarters of your product where there is absolutely not an excess of demand. And so there’s no way you can be successful in that situation because lowering the price isn’t going to get people past their social hesitation. And instead, it’s better to keep those prices moderate. Right. But really focus on that top one quarter of titles that people really want to see. And so we have Audrey McDonald at a couple of different venues that we price. Audrey is a very famous Broadway star. She’s won like six Tony’s. And so these two different venues are bringing her in. And right now, her average ticket is for one of them, it’s $101, and for the other one it’s $88. And the reason that’s so important is that they’re probably going to each bring in about a quarter of a million dollars from one performance with Audrey McDonald. And that’s absolutely going to make up for a whole lot of pain that they’re feeling on other titles that just don’t have the oomph to get across the finish line. And that’s important. People need to be able to be paid. Box office staff needs to be paid. Marketing staff needs to be paid. Right. And the only way you’re going to get there, though, is if you’re focused on, well, if people are really anticipating this, they really want to see it, then can we start inching the price up? And we’re a big proponent of making small steps. About 5% is a good number to follow. Right. Make small steps up and then look at your sales. Are people still buying great, inch it up a little bit more and just keep doing that, that’s where you ultimately end up with the revenue that you need to be able to run the organization.
Lucy Costelloe: Wow. And I suppose when we’re talking numbers, like, just to hear it’s, that kind of like it’s not even an inch. 5% is just a little bit of a pull. That, to me, just if we really think about it. And actually something I suppose that I found when we were talking about kind of this whole idea of running this podcast that really helped me was when we first began talking about pricing, you used an analogy from your time at Starbucks. And once I removed myself from the idea that I wasn’t pricing a ticket for an Articultural organization, I was really able to think in an entirely different way as well. So that kind of idea where we’re only talking small steps, we’re not talking leaps and bounds, and I think that could be an assumption that a lot of people do have. When we think of dynamic pricing that we think of 1 minute, we go on to book a flight and it’s our Ryanair 999, and we’re thinking about booking the holiday, and we go and we have another check. And then when we’re finally ready to book it, it’s come in at like 100 and 999 and it’s just absolutely skyrocketed. So I think that’s something that could be really interesting to touch on, that dynamic. Pricing doesn’t mean this big band because we do we talk about pricing bands, tier one, tier two, or band A, band B, but it might be as small as something as that initial 1st 5%. But you’ve just been working on it a few times or a few steps later.
Sean Kelly: Well, and it’s important to note. So there’s a couple of things. One, we’re not trying to be the airlines. There are good lessons that come out of the airlines and we should pay attention to those lessons. But we’re also not trying to wholesale takeo on their practices because some of them are kind of antithetical to the work that we’re doing because we have a different model with our patrons, which is a loyalty model, right. We want people to be able to come back. And then the other thing is, I’m so glad you brought up pricing bands because this is probably one of the biggest misconceptions that has been put out about pricing. And so we can just talk about it right now, which is you shouldn’t be looking at individual bands, right? You focused in too close and you literally can’t see the forest for the trees. You need to pull back and you need to be pricing the entire performance, the entire event. So if sales are going well, don’t look at oh, well, seats are selling really well in the premium seats. And over here in tier four, don’t look at that, just look at the performance. How’s it selling? Is it ahead of pace? If it is, you need to raise all of the bands. And that’s one of the really integral pieces that we found early on, which is if we just focused on individual bands, we didn’t get that much of an uptick in revenue because we just simply weren’t moving enough seats prices. But if you move the entire venue up 5% now, you’ve made a significant change to how things are going. And again, because you’re doing it as a percentage, even if you just have a 20 pound seat, it’s only just going to go up to £21, right. You’re not making some extraordinary change that’s going to cause people to have sticker shock when they come into the website. So really take a bigger view of the performance.
Lucy Costelloe: Oh, yeah, I love that. And actually, I have to put my hands up when I’m feeling under pressure or when I’m feeling like I don’t have clarity or if I don’t have the answer. And also the even worse feeling of no idea where I’m going to pull an answer from. I struggle to take a step back and look at something from unrealistic view I do. And I find myself getting so bogged down in some of the minutiae of things or really small, small details that eventually, when I can see my next clear step, I’m like, it was absolutely not. That one thing that I was so consumed with for so long, and I think that’s just such a part of being and feeling really human, especially when things aren’t maybe working out the way that you’d want to. But I think what is really nice from this conversation is anytime that we’ve spoken around pricing, you’ve used the analogy of where something is potentially performing really well, rather than looking at, like, an increase of pricing or shall we say, kind of getting a little bit more creative or data led in our pricing decisions. It’s the idea that you’re doing something really well and you’re having a success, push the boat out a little bit further and gain more success from that rather than it has to be a failure to look at pricing. And pricing is the answer to when things go wrong. Actually, pricing is the answer to when things are going really good, but you want to get them from good to great or from great to better.
Sean Kelly: Well, the challenge that we have so often when we talk to an arts organization is they don’t actually know what their product is worth. Like, if you ask them, you’ll say, okay, well, what’s the most you’ve ever charged? And they’ll often say, well, we’ve never charged more than £100. And you’ll say, okay, well, why? And they’re like, well, we think that that’s what the market can bear. And we say, okay, well, have you ever actually tested that to see if that’s actually true? Right, so that if you have something on a par with Audrey McDonald, have you ever looked to see, can we charge more than $100? And does that slow down the pace of sales? Because that’s ultimately, again, it gets back to the data about following the data, rather than, how do people feel about charging more than £100 for a ticket? Because that’s arbitrary. That’s how we feel. It’s emotions, and that doesn’t mean that those don’t have meaning for you or within the organization, but they’re not the feelings we should be focused on, which are, how do patrons feel about these prices?
Lucy Costelloe: Yeah, definitely. And just kind of thinking about that and some of the knee jerk reactions that we have. I saw something really funny there in an article when I was prepping for this podcast, and I just thought it was kind of so true for how we make some of our decisions, but it was a cartoon image and they were talking about where we have our panto coming up again this year. Because I suppose a lot of the programming that we do in the sector, it can run on a bit of an annual cycle. Panto is usually always going to be at Christmas time, December, January. And anyway, the final snippet of the cartoon was, oh, sure, just throw a tenor on it, because this is our response to pricing. It’s like, sure, it’ll be a tenor, and if it’s not a tenor, it’ll be twelve. And it’s kind of like we fall into this repetitive kind of going back to numbers. And I think that’s something that we really need to consider. And I think definitely taking kind of the holistic view, but I suppose what are some of the assumptions that you think if you were to name the top assumption or the top three assumptions that we make before we even have made up our mind on what pricing looks like in organizations? What do they tend to be, do you think?
Sean Kelly: I think the first one is what have we done in the past? Right? So pricing in general for most arts organizations is iterative? And so they say, well, what did we do last year? And say, okay, well then that’s what we’re going to do. Or they might raise it like a pound or two, but the titles that you this season are different than the titles you had last season, so it might actually require very different choices. The other big one is how long you’ve worked in the industry. And this really gets to the notion of ego, right? And this idea of, well, I’ve worked in the industry for ten years or 15 years or however many years, and so I know. And on the one hand, I absolutely want people to feel confident in the work that they do, to feel self assured. But at the same time, I want them to be able to hold, especially for pricing, to be able to hold the concept of I don’t know. And that’s very challenging to be able to come into every new situation and say, I don’t know. We’ve priced Yoyo ma a lot. We feel like we know pricing around Yoyo Ma really well, and yet every time we bring him in, he’s in a different venue, in a different locale, and so he’s going to need a different solution. And those solutions actually look quite dramatically different depending on what community he’s playing in. But if we just came in and we said, no, we know Yo Yo Ma, and it’s going to be exactly this, we could absolutely overshoot for some of the communities. The only reason we can do that, though, is because we always check ourselves at the beginning and we say, no, this is someone we’ve priced before. Right. But they’re in a different place and so we’ve got to figure out what’s that worth to that audience.
Lucy Costelloe: Yeah, I love that because I was actually going back over kind of notes that I’d taken with the conversation with an organization. And they’re quite a large organization. So typically the type of production that they would be that I would kind of make the assumption that they would be doing is the likes of the Opera, maybe live streaming, some ballet performances, but very much sitting within that kind of traditional. And I put my brackets up here like high art form, and they were speaking about contemporary dance, and I was just like a listener, but I was really engaged. And she was speaking anyway, really passionately about how difficult it is to sell contemporary dance and why is it always programmed on a Saturday and how unbelievably challenging that is. And I was thinking, I was like, oh my goodness. Well, if their venue can’t sell on a Saturday night contemporary dance, sure, who could on a Saturday night? But her response was so powerful, she turned around and she basically said to the group that we were in conversation with and she said, we are not located in a large city and we’re not located in the capital city of our country. So a contemporary dance on a Saturday night would sell much better up. And she named actually, technically, and again, I have my brackets up like a smaller style organization. They would sell that really well on a Saturday night. But us? No, only the thing that would sell the best on a Saturday night is actually like our local theater or our community performances. And I couldn’t believe it, but it made so much sense and kind of what you’re saying there. It’s nothing to do with the structure or the outside. As an outsider who wouldn’t visit this organization frequently, my assumptions of what would sell really well were totally turned on their head. It’s the relationship that this organization have built with their local community, the people who are around on the Saturday night who aren’t going into the large cities. So, yeah, there’s just so much there about the relationships that we’re building and why kind of to trust, I guess, our patrons and our audience members and to really guide us and to steer us and to feel brave. That they will tell us. And the data will show as soon as we’ve pushed it a little bit too far, you’ll see something and I think something that you mentioned there, which I was really keen to kind of chat a little bit about Is. You spoke, Sean, about this idea of building a loyalty model or building a loyalty framework within our pricing. And I just love that idea. Pricing? Yes. Okay. We know it’s for our revenue and we need our ticket sales. They’re instrumental to make our budgets, particularly like our Christmas programming usually makes the budget for the next year makes or breaks it. But actually to think about the way that we design that and to design it all around loyalty, I think is so powerful and is really something that we should feel invigorated bringing to the table and not to be shying away from. This is our opportunity to have that conversation about our loyalty framework or our loyalty model for our organization.
Sean Kelly: I think the toughest thing about this is that often when we start talking about loyalty, people think. That the lower the price is, the more loyal patrons are. And that that is going to automatically get them to come back more than once. Because the majority of our patrons, unless they’re subscribers, the majority of our single ticket buyers, they only come once a year. Right. And so, well, if prices were really low, then they would come a second time. Well, that’s not actually what’s motivating them. What’s going to motivate them is the quality of the programming. But there’s this portion of the psychology there that often gets missed, which is that actually, because we all live in a capitalistic society, right, we identify how much something is worth by how much we paid for it. And there’s lots of studies that show that the more you pay for something, the more you tie yourself to it, the more valuable it is. Like your iPhone or your other expensive mobile technology. Right. Those are a great example because you’re spending £1000 on that and you use it a lot. But part of the reason that you value it so highly is because you spent so much money on it. There is not a fundamental problem with us saying, this is going to be an extraordinary night of theater, ballet, opera, whatever, and folks really want to see it, and we should charge more for it, because ultimately they’re going to get that value. When they come to the performance, they’re going to receive it, and they’re going to feel as they walk out, oddly enough, the more they paid for it, the more they will feel like it was something that was worth doing for them.
Lucy Costelloe: Yeah, absolutely. And I’m sure there isn’t one listener here today who can’t turn around and say that they’ve never not said to their colleagues in work, well, we have 250 signed up, but it’s a free event, so we are expecting a 2020 5% drop off rate. That’s said so much within our sector as well around free events, expect the drop off. But we don’t say that for our Saturday night programming.
Sean Kelly: No, because they have put in the game. Right. They literally invested in the organization. And so instead of thinking of those higher ticket prices as gouging, think of those premium prices as an investment that those folks are making. There is an absolute direct correlation, and this has been proven out with work that I’ve done around patron loyalty, there is a direct correlation between how much people spend on tickets and how likely they are to donate to the organization. So if the goal is to have a ticket buyer and ultimately to turn them into a donor, then having them pay more for their premium seats is absolutely the path that’s going to get you there. Giving them those seats at an artificially low price because you’re trying to keep all of your prices below £100 is not going to get them on that ladder to becoming a donor.
Lucy Costelloe: Yeah. And I like the idea kind of that you’re challenging us as well to think about the idea of this as an investment. Because when we talk about what would we like from the sector, I think what comes back is we’d love if there is this pot, if we just needed a pot and it’s obviously it’s a pot of money, but everyone calls it the pot. If anything went wrong, the pot’s there. If the roof, God forbid, or if we want to trial something and we don’t know if it’ll work, we have the pot. Like the pot is there to catch us when we fall or whatever that is, to throw water on the fire if we need to exhaust it. But I think the idea of this is an investment. It’s going into that metaphorical pot into your organization, and it’s allowing because the next thing that I kind of want to just briefly touch on is balancing our needs as an arts and cultural organization, as a part of the ecosystem of our community to be able to balance, kind of creating an accessible avenue for our audience members to come into and to purchase tickets. But also then the realistic views that we need to be sustainable, we need to pay bills and we need to pay our team. So it’s that idea of how do we get it both right? And I think that probably can be one of the toughest conversations is because we all know, and particularly people at our box office, they see people who are coming in frequently and they know the demographics of their local communities and they know how that can pivot. And I think we always have someone in mind, I believe, when we think of our organizations and what they do and the positive impact on society that they make. So I think that could be something that’s quite challenging to think, well, we have needs as an organization, but yes, there are the needs of our audience members as well.
Sean Kelly: Well, it’s often the case on the arts that we put ourselves, if we work inside of the organization, we put ourselves last on the list. Right? So in the US. Very common for folks to work at a greatly reduced rate compared to what they would earn if they were out in the private sector, to not take all of their holidays to work 60, 80 hours a week. And that’s just not a sustainable way for us to have an organization. Everything has to matter. All of those things have to be important. And yes, we absolutely want to bring in as many people as possible, but we shouldn’t do that at the expense of the people who work inside the organization. Meaning that they can’t get a livable wage and they can’t feel like they’re secure in their future because they’re always worried about the roof caving in. And what we want organizations to do is we want them to think about providing more options to patrons. So we want you to keep those accessible tickets. We are certainly not of the position that all prices should rise for all performances. There are always going to be a set of performances that should stay low priced because they’re the ones that are harder to get people in the door to. But you need to expand that range on the top side so that you’re providing more options to people and if they really want to come on, whatever your most popular night is at whatever the most popular time is, that they’re willing to pay more to do that. And then if they’re not, then great. Let’s have you come in on a Tuesday night where the prices are super low and we can make sure that things stay quite accessible for you. It’s that concept of more options that provides you with kind of the foundation for how you want to set your pricing for the organization.
Lucy Costelloe: Yeah, absolutely. No, I think it has definitely struck a chord for a lot of my thinking anyway, and kind of interesting as well because my current role, I’m technically, although I get to work with lots and lots of wonderful organizations, I’m not sitting in a chair where I need to talk about pricing. I’m kind of on websites booking tickets myself. And I think when I see that now as well, it really will change my perception of when I’m clicking on a ticket, will I notice actually the difference, if at all, because I’m someone who’s quite a passionate attendee also as well. But I suppose kind of to wrap it all up and to kind of leave our listeners with maybe like a top tip to feel confident in having this conversation internally and then also maybe a top tip around. Well, what is actually the first move when you’re having these conversations? How can you get started today and to really see kind of the quick wins come through and some fast results, if at all. And I do say that lightly because I know that what a fast result means. It doesn’t mean you quickly implement something. It means there’s been a lot of time and consideration for these teams. But what would those kind of top tips be for you, Sean?
Sean Kelly: Well, I think the number one top tip is to start small, right? So identify a performance or a series of performances that you think absolutely has the potential to be able to bring in a better price and have those conversations inside of the organization. You don’t want to surprise anybody and clearly explain to them, listen, we’re going to build a track that this needs to be on to be able to get to its goal, and we’re going to follow that data, and then we’re going to make adjustments of 5%, either up or down, and we’re going to do it three times a week. And we’re going to use this as a test case to prove out whether we can charge a higher price for this very highly anticipated title. And then we’re going to check it at the end and we’re going to say, well, how much more money did we bring in? Was it worth the effort that we put into it? So that’s the best way to get started on this. Don’t try and do it for everything. Try and do it for something. One thing that’s smart. That’s the thing that you’re like. No, this is the thing. If I have to choose the thing, this is the thing. But then the other thing is more of a story, right? So my husband and I, we wanted to go see Swan Lake at the local ballet company, and we were looking at tickets, and it was the final weekend. And so we could go on Friday night or we could go on Saturday night because, of course, I’m the person who purchases the tickets because I know a thing or two about purchasing a ticket. And so I asked him, I said, okay, well, do you want to go on Friday or Saturday? And he said, Well, Friday is hard because it’s the end of the week and I’m tired. He said, but if it makes more sense, like price wise, then we should go on Friday. So I went into the website and the tickets that we wanted were $45 on Friday or $55 on Saturday. So, Lucy, which night do you think I purchased Saturday?
Lucy Costelloe: 55.
Sean Kelly: Why?
Lucy Costelloe: Because of the value. You would have gained more value, and I believe that your husband would have gained more value as well. I am that person on a Friday night where I want to be a hermit. And I just know the difference of my experience of experiencing it on a Friday night after a long kind of week or when you’re kind of rushing to finish at five and jump in and see something versus kind of making a whole day out of it on Saturday. The build up, like having the time to be able to think about it as well and maybe getting invited to eat beforehand or having your pre dinner drink or your drink at the interval or beforehand. It really does. It’s the difference for me of kind of like going into my workwear versus being able to dress up for something like that or really catch up with my friends, versus going because I really wanted to see it.
Sean Kelly: That’s what I feel right now. What if I had gone in on Friday and it was $45 and I’d gone in on Saturday and it was $90? Now, which one would I choose?
Lucy Costelloe: Friday.
Sean Kelly: Friday.
Lucy Costelloe: Am I fickle Sean?
Sean Kelly: No, but you’re exactly right. The difference between those two performances or the differences between your eight performances in the run, it needs to be somewhere between 50 and 100%. So if the lowest price of the week is 45, that means you’ve got to be someplace in the 70s or all the way up to 90 before patrons will start to have that very distinctive conversation about, well, is it worth it for me to go on Saturday, or should I choose the lesser night? And it’s a win win for you because the people who absolutely still have to go on Saturday are going to pay the higher price. That’s great. That’s money in your bank. And the people who aren’t are going to go on Friday, which is actually where you probably need more butts and seats anyway, so you actually win on both sides of that. But the only way you can do it is if you’ve given them enough of a distinction in those two prices that they can actually make a value proposition decision, which is worth more to me. But it means pushing yourself much harder than oh, well, it’ll be $10 more, because no one’s making a value proposition decision off of $10.
Lucy Costelloe: No, but you’re out there with me going on. I could have talked to you about ten minutes on how I would have planned my Saturday around that with the 55, but as soon as it jumped up, I was like, Absolutely not. And if I saw the price, I’d grin and bury it. And I’d still have a great time, and I know that. So, yeah, I have to say, I really enjoyed that exercise myself. I’ve learned a lot about my purchasing habits.
Sean Kelly: Literally everyone does the same thing. They might do it for different reasons than you have for wanting to go on Saturday, but they’re all making those types of judgments about, should I go here, should I go there? Right. Which one is having an impact? But you’re not going to get them to do the thing that you want them to do if you’re not giving them a strong choice.
Lucy Costelloe: Yeah, no, I have to say that when we bring it all back down and again, it’s probably that idea of not focusing in on one single thing too much, but keeping it simple, looking at it broadly, and you can see and kind of feel it much more clearly. Well, on that note, Sean, I really want to thank you so much for joining me today. I’ve really gained a lot from our conversation and I just know that our listeners will as well. I’ll include some resources as well in the Show Notes link, so I’ll make sure to maybe include a link to your LinkedIn if anyone wants to reach out to you, and a link to your website as well for vatic. So, Sean Patrick Kelly, thank you so much for joining me today.
Sean Kelly: Thank you so much, Lucy. It’s been an absolute delight to talk to you.
Lucy Costelloe: Thank you.
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