Revenue / 02.20.19
Even Pricing at MGM Requires the Human Touch
Pricing live events is becoming less manual, of course. But even with all the technology in the world at his fingertips, MGM Resorts International’s Director of Ticketing Matthew Pender maintains the human aspects of ticketing is vital. Perhaps more so today than ever before.
We connected with Pender to discuss all things pricing at MGM, which has recently moved more heavily into the territory of dynamic pricing.
“We have a large, heavily reported and analyzed dynamic pricing model for our partners with Cirque du Soleil, and then we have a more grassroots pricing strategy that works with some of our other small shows and smaller venues,” Pender says. “With Cirque du Soleil, we do dynamic pricing analytics and reporting. We use estimated guest arrivals to scale on a range of one to six, with four being our baseline normal pricing.”
Pender says that MGM is, much like ticketing organizations across the board, moving toward a pricing strategy similar to airline pricing. This means that pricing for show, date, time and seat is based on demand. It is all variable, but Pender’s biggest goals are to apply this new pricing strategy to MGM’s smaller shows and venues and to move away from frantic flash sales and massive last-minute discounts.
“We’re trying to shy away from the mentality that people current have: If you wait till the day of, you’re going to get the best price,” Pender says. “We’re really trying to flip that mindset to let people know that if they book in advance, they’ll get the best price. If you wait, you’ll have to pay a higher fee because you waited and the demand for the show is high.
“The goal is to help us make sure we’re adjusting pricing strategically and not necessarily having to rely on going to a 25 to 30 percent discount in a future date. We don’t want to have to run flash-sale programs to drive revenue. Instead of that route, we can dynamically price throughout the show sale.”
In terms of influence on the secondary market, Pender says they’ve already seen a reaction. “We’re noticing that this is forcing the secondary market to adapt to us, instead of us adapting to them.”
Pender says that one of the biggest draws of dynamic pricing is the ability to see what seats customers want for particular shows. And while this can be determined through dynamic pricing software, it’s hugely beneficial to MGM to solicit customer feedback via some old-school methods.
“A big part of accurately pricing our shows is driven by directly engaging with our customers,” Pender says. “Via surveys and focus groups we ask questions like, ‘If you came back, would you pay more or less based on how the show was?’ And that massively helps us price. It helps us to determine if we’re on track or missed the mark at all.”
This human element of pricing is at the core of Pender’s overall strategy.
“As a ticketing expert, I rely on my gut to say I’m making the right move based on the experience and feeling the pulse of my show,” Pender says. “And then I utilize some sort of analytics to reassure that I’m making the right decision or heading in the right direction. A computer will never be able to do predict everything in such a fluid industry. Merging the tools together — human and machine — is the right idea. I wish we had a magic button to help us make the perfect decision every time, but it’s never going to happen. It’s instinct and learning from those mistakes and then rescaling."
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Tags: Secondary Ticketing , Consumer Behavior , Consumer Preferences , Market Research , Venues