My theater company Loaded Gun Theory started talking about budget and pricing for our next show last night. Much like I expect most theater companies we seem to always start from a random list of assumptions. Have you heard these?
“Well I think $15 is fair”
“Times are hard right now, so…”
“$20 is way too much there’s a price barrier there”
Actually times aren’t that hard right now in Austin. We have 6% unemployment. And we shouldn’t be ashamed to charge a fair price even when times are tough. Neither Walmart nor your favorite local merchant have any qualms about that.
But really I wanted to talk about choosing a price. As a group we tend to just start bandying numbers around and talking about “fair”. But we’ve been using BuyPlayTix since the beginning, especially the BoxOffice feature. So I know how many credit card sales we have, I know how many walkups we have. I can really break down the numbers.
And as much as I’d like to have bigger audiences, we have 250 people. Consistently. So that’s where I try to start with our budgeting. What is our proposed budget, and what price do we need to charge 250 people to get there? If we have a $3,500 budget with rent, design, and stipends then what do we need to charge?
$3500 budget / 250 patrons = $14 per ticket.
We are not immune to the fact that some people would like to see a lot of theater and $14 is a bit steep. So we’ll be using BuyPlayTix’s discount code feature to offer a discount for up to 20 people to buy tickets for $10. So let’s find out the maximum that can make us:
$10 tickets * 20 patrons = $200
So we’re losing 20 patrons to these tickets and we’re making $200. So let’s refactor our original equation with that in mind.
$3300 budget left / 230 patrons left = $14.35 per ticket.
So if we round up to $15 a ticket we should still be set for meeting our budget. But if we hadn’t accounted for those discount codes we would have ended up potentially losing $80.
Do you do this type of budgeting? How do you choose a ticket price?
Next up how Pick Your Price and Tiered Pricing affects your bottom line.