So on this one I must admit to being very confused, and it’s one of my core targets at Intix, to understand not so much the what but the why?
Now let’s dispel some myths first on what I see dynamic pricing is NOT, the reason for this is I often come across people who claim to offer or implement DP.
Altering rows J to K to now to be price level 2 instead of three as, they’re really popular and the venue realised they can make more money this way. This is not DP this is revenue or yield management, reverting your pricing, which again I am looking forward to hearing about in Chicago.
Realising your show is not selling and cutting all your ticket prices in half. This is discounting. Not DP.
Altering your bases prices across the board in line with other venues to achieve proving harmony or distinction to claim to be “cheaper than” This is price review.
So, as I see it, dynamic pricing is altering your prices (up and down, but more on that later) based on, triggers, events, dates or other factors from outside sources.
Now at this stage someone almost always mentions airlines, so do these offer dynamic pricing, it’s hard to say, but if you look at a flight
First 10 seats 19.99
Next 10 29.99
Etc etc, this is yield management, now when you filter in dates, that each 7 days for the 28 days prior to the flight the base prices rises by 10‰ that starts to resemble dynamic behaviour.
Couple in with a count of the number of searches for that route in that day and that it is setting a lot of traffic, the interest could force the price up.
Now page views affecting pricing is a tricky one in my view. John Pinchbeck when talking of SRO4 at a fringe session at AMA in Glasgow, Scotland in 2011 talked of page views being a trigger.
But if I view a page for a concert to see ticket prices and think “wow, they’re expensive” and device not to buy, like countless others the price could continue to rise despite price being a barrier to purchase, of course if it’s that popular than someone will hopefully always buy.
So what else affects price?
Social media activity.
Looking at twitter mentions to gauge people talking about a Works Tour, the more mentions the more popular surely, the higher price. The star rating given to show on Fri advisor or other review site.
Whilst working in Belgium last year two arts tech contracts told a story of two fresh out of the box identical laptops searched for prices at the same time, in the same order from two locations in Brussels, one a very affluent neighbourhood, the other one of the most deprived, they had clear results that some stores were operating printing based on the source of the search.
Having never been a skier I can only guess at the frustration of booking a ski trip to find poor conditions, so if the airline could see that a ski resort is having and is forecast to have good conditions it raisers the price, perhaps looking at an arts setting looking at a vacuously of other shows on a tour, add they sell out or change prices they asked too.
Your own environment
The in bound call volumes on a specialist booking line, the sales forecasting that this site on its current course will it will not sell out, the tracking of one product or range against another.
The nature of dynamic is that prices must move up and down, not just up, I guess it is dynamic if it rises, but movements in both directions should be possible/ occur. The other key element is that it must occur automatically based on thresholds, actions and activity either in-house or outside the organisation.
So now onto what I struggle with. Why? Is it to make more money on popular events or routes.
What I fear is rollercoaster pricing, the shift from 30.00, TO 31.50 TO 29.50, what price are the tickets? What next people “shorting” tickets like we saw with stock before the financial crisis, betting on a show to fail?
So is the why to make more money/ increase yield, even when shows are failing, by dynamically reducing price? It’s it to confuse system designers/Suppliers, or even the box office manager/ marketing director?
The what makes sense, the why will be the source of my knowledge hunt starting Tuesday at the Sheraton