Deciding how much to sell your event tickets for can be pretty daunting. What if you set them too high and no one buys them? Or too low and realise you could have made way more profit?
The truth is, setting your ticket price isn’t an exact science. But that’s not to say you just have to take a wild stab in the dark at it. There should definitely be a clear methodology behind your ticket pricing, otherwise you do risk losing out to the competition or, worse, not breaking even.
In this article, we explain all you need to know.
🤔 How are event prices set?
In basic terms, event prices are set by looking at the total cost of putting on the event (including all costs associated with marketing it), then dividing this by the number of people expected to attend the event. This gives you a basic break-even figure; the least amount you need to sell tickets for to make the money back you’ve spent putting on the event.
Of course, if you want to make a profit, you’ll need to sell your tickets for more than this break-even figure. That’s where making a decision about what kind of pricing strategy you want to go for comes into play (more on this below).
Here’s what marketing guru HubSpot has to say about pricing strategy:
“A pricing strategy is a model or method used to establish the best price for a product or service. It helps you choose prices to maximize profits [...] while considering consumer and market demand.”
✍️ Calculating your ticket price break-even point
It’s essential that you leave no stone unturned when it comes to figuring out how much it costs to put on your event. If you miss something off the list – like the cost of building a website for your event, for example – your ticket pricing will be all out of whack.
Here’s a list of some common costs associated with running an event (but remember there might be other things on your list too):
Food and drink
Marketing – so, anything you spend on things like printing flyers and social media adverts
Speakers, performers, and any other entertainment or activities
Website, signage and branding
Equipment and technology – for example, the cost of renting video or sound equipment
Uniforms and costumes
Permits and licences
Contingency costs – basically, an emergency fund in case something goes wrong, like a performer dropping out at the last minute
Once you’ve figured out how much your event is going to cost to run, you’ll need to work out how many attendees you can expect to attend. To do this, look at:
How many attendees have attended similar events of yours in the past – or, if this is your first event, how many attendees have attended similar competitor events (do they regularly sell out?)
How many attendees your venue can hold
Of course, there’s always going to be a risk involved in putting on any event. Tickets might not sell as you expect them to, or an uncontrollable event, like bad weather, could hinder sales. (Which is where having the right event insurance can be a lifesaver.)
But it’s still important to work out as accurate an idea as possible of how many tickets you think you’ll sell. It’s the only way you’ll be able to calculate your minimum ticket price to break even.
✅ Choosing a pricing strategy for your tickets
Now that you have an idea of the minimum you can charge for your tickets, it’s time to decide on a pricing strategy for actually turning a profit.
There are lots of different pricing strategies out there that are proven to work. But it’s not necessary to bog yourself down in learning about each and every one of them, because a lot of them are only appropriate for certain products and services – not events.
The two main pricing strategies that are worth looking at when it comes to ticket pricing are:
1. Value based pricing
Value based pricing is where you take active measures to figure out what people perceive the value of an event like yours to be.
Look at it this way. Everyone has a price that they’d be willing to pay for a certain experience or product. For example, someone who is a huge fan of a certain music artist would probably be willing to pay a fair amount to see them perform – especially if getting to see them perform was quite rare.
So, what would people be willing to pay to attend your event? That’s the golden question – and finding out the answer it’s what value based pricing is all about. Here’s how to do it:
Survey your existing customers: If you’ve run events before, try carrying out a survey of your existing customers to find out how much they’d be willing to pay for your upcoming event. Provide multiple choice answers to guide respondents – say, four or five different pricing options. Some questions you could ask are:
At what price would you say that tickets were too expensive for this event, and so not worth it?
Would you say any of these prices sound ‘too good to be true’ for this kind of event?
Would any of these prices make you think this event wasn't’ going to be very good?
Do market research (not just with your existing customers): This involves carrying out the same task as above, but widening it to people who haven’t attended your events before.
This is an important step because if you only survey existing customers, you’re going to get a biassed idea of the perceived value of your event (because you’re surveying people who you know are already interested in events like yours).
If you’re new to event planning, you’d jump straight to this step.
Look at competitors: This involves looking at competitors to see what people are willing to attend similar events to yours. (Find out more about this below.)
Value based pricing is a great option if you’re keen to put a bit of extra leg work into making your event as profitable as possible. It can also help you to build a relationship with your customers, and increase their loyalty to your brand in the future.
If you find the idea of carrying out this kind of market research quite daunting, you might be better off trying a simpler pricing strategy – ‘competitive pricing’ 👇
2. Competitive pricing
This is quite a bit simpler and less time-consuming than value based pricing as it only involves the last step.
Instead of doing research to figure out what people think the perceived value of your event is, you simply look at the pricing for similar events, and decide how to price your tickets based on those figures.
You might decide to slightly undercut the competition, for example, by selling your tickets for just a little bit less than them. Or you might decide to put your pricing somewhere in between the lowest and highest competitor ticket costs. It’s also a viable option to sell your tickets for slightly higher than your competitors. This can create a sense of your event being slightly more ‘VIP’, or offering more value than others. It’s a good idea to make sure you can back your pricing decisions up though, and that customers won’t be left feeling disappointed.
If you genuinely feel your event includes more bells and whistles than others’, then pricing it more highly can help communicate this – just make sure to shout about all the greatness of your event in your marketing materials! Make sure people really understand why it’s worth that slightly higher price point.
Using a competitive pricing strategy can work well for events because it’s a pretty saturated space. So it is genuinely important to make sure you’re keeping an eye on the competition. The fact the space is so busy also means you’ve got lots of reference points when it comes to deciding on pricing.
If you’re running a really niche event without much competition, value based pricing might be better for you, though.
Understanding the ins and outs of how ticket prices are determined can make a big difference when it comes to running a profitable event business. Even just tweaking your prices slightly can significantly impact the money you make overall… all the better for making that next event even bigger and more exciting than the last. Sounds pretty good to us.