How to Properly Price Your Event
Pricing tickets can be a difficult process. There are many different ways to price tickets for events. And while some approaches work better than others, there's really only one way to make sure you sell enough tickets to cover your costs: price your event at what people are willing to pay. How do you know what people are willing to pay?
Value-Based Pricing
In this model, you set your prices based on the value your attendees receive from attending your event. Value-based pricing is different from competitive pricing because it focuses on what people actually gain from coming to your event.You can calculate the value you offer by looking at similar events and comparing prices, similar to a method called competition-based pricing. For example, if you plan to hold a conference in New York City and another conference in Los Angeles, you might find out that the average ticket price for both conferences is $1,500. If you compare those numbers to the average ticket price for a conference held in Toronto ($2,200), you'd see that the Toronto conference offers more value than the others. So, you could set your ticket prices accordingly.
Of course, you don't have to limit yourself to just comparing one event against another. You can also compare your event to industry standards, such as the average ticket prices charged by large companies like Apple and Microsoft.
Cost-Plus Pricing
This method involves setting your prices higher than the cost of producing your event. In fact, some event planners choose to charge more than their actual expenses, hoping to recoup those additional costs later. While this approach works well for small events, it doesn't work for larger ones. And while it might seem appealing to charge more than your actual costs, it makes little sense financially. After all, why spend more money to produce a product that isn't worth selling?Competition-Based Pricing
The competition-based pricing method involves setting your prices in relation to the prices of your competitors. Prices are determined for this method by analyzing other factors like consumer demand or the cost of production. This is compared to other strategies we have spoken about, value-based pricing. Value-based pricing includes similar components to determine a price point, both pricing methods work well together.Dynamic Pricing
Dynamic pricing is the practice of varying the price for a product or service to reflect changing market conditions. More particularly when a product or service is being offered during a higher demand period the price will reflect that demand and be priced higher.
Aside from the pricing models, you can choose to go off there are things you need to look into to better understand how to price your event. Some practices overlap but going through each one will give you the best potential price for your upcoming event.
Consider the value of what people are getting from your ticket
Consider the value of what people might be getting in return for what they pay. If someone wants to attend your event because they want to network with peers, it makes sense to offer a discounted ticket. On the flip side, if someone pays full price to attend your event just because they love sneakers, it could be worth charging a premium.Think about what your attendees are walking away with when leaving your event.
When it comes to pricing, there are many factors to consider. One of those is whether the person attending your event actually needs the experience you provide. If they don't, they might be better off spending their money on something else.
For example, if someone wants to learn how to code, a coding boot camp could offer a much better learning experience than an hour-long talk. Or if someone just wants to network, a conference focused on social media marketing could be a better investment than one focused on sales.
The key here is to figure out what type of attendee you want to attract and what they'll gain from being there. Then, make sure that whatever you're offering aligns with what they're looking for.
If offering items included with your ticket
If you are hosting an event that is giving away items included with the tickets or even hosting an auction or raffle establishing the FMV of tangible items can be tricky. There are different ways to do it depending on what type of item it is. Here are some tips to help you get started.
1. Estimate the Retail Value of Your Item
The easiest way to estimate the FMV of a tangible item is simply to look up the retail price online. If there isn’t one readily available, try searching eBay or Amazon. You might even ask someone who owns the item how much he paid for it.
2. Determine the Cost to Create the Item
If you want to sell something like a painting or sculpture, you'll likely have to pay a professional artist to make it. This could cost hundreds or thousands of dollars.
3. Find Out How Much Similar Items Are Selling Online
You can use sites like Etsy or eBay to see how similar items are selling. If you're looking to sell a sports jersey, you can compare the prices of jerseys sold on those sites to determine the FMV of your item.
How much do you need to charge per ticket to make a profit
The most important thing to do is figure out how much money you'll need to make to break even. If you're not sure how much revenue you'll generate, you could use some help. Thankfully, we've got you covered.
Before you start setting prices, you need to know how much you have to spend. This includes everything from rent to food and drink. Once you know how much you need to spend, you can move on to figuring out how much you need to bring in to make a profit. To determine this number, you'll need to look at your expenses and see how much you need to earn per person.
To calculate this, multiply the total number of people attending your event by the amount you need to make per attendee. For example, let's say you plan on selling tickets for $100 each. In addition to paying for the space, you'll need to pay for food and drinks. So, if you sell 50 tickets, you'd need to make $500 per guest.
Now that you know how much you have left to spend, you can decide whether or not you want to add additional perks like VIP packages. These extras require extra cash, but they can be worth it depending on your audience.
If you think you can pull it off, you can always raise your prices later. But if you're worried about losing attendees because of the cost, you might want to consider adding a few perks to entice guests to come.
Break-even point
It helps to understand exactly what you are trying to achieve. What do you want to accomplish with your event? How many people do you hope to attract? Where will you hold the event? Will you host it yourself or hire someone else to run it? Do you plan to sell food or drinks? But most importantly, how much money do you think you'll make?Once you've determined your goals, you can calculate your break-even point. This is the price at which you must sell tickets in order to recoup your costs for the event.
For example, if you're planning to charge $100 per ticket, and you estimate that each attendee will spend $150 during the event, then you'd set your ticket prices at $50. However, if you anticipate that attendees will spend less than $150, then you could mark up your ticket prices.
Keep in mind that it's just one way of looking at things. Your goal isn't necessarily to reach a certain number of sales; it's to recover your costs. So, if you don't feel like your ticket prices are high enough, after calculating your break-even point look into other factors that will help make your decision.
Supply and demand
If you want to know whether people will show up for your event, it helps to understand why they might come. Do they love your brand? Are they seeking a specific type of experience? Or do they just like attending things? If you don't know the answer, you'll never be able to predict attendance rates.
The same goes for pricing. There are many factors that influence whether attendees will spend money on a particular event. Some examples include:
- What else is happening in the area? Having an event in a well-populated area gives you some competition but also encourages people to attend because it is in a well-known area. Attendees can make a day or night out of going to your event if there are other things to do around your event.
- How much does it cost to attend similar events? You want to make sure you are in the same price range as other events that are similar and in the same area. You don't want to go into it selling tickets for $100 when similar events are selling for $50.
- Is there anything else I can buy while I'm there? This is a plus for shoppers, who doesn't love picking up a souvenir from a gift or pop-up shop at an event?
On the other hand, if you are selling a ticket to get into an event but none of the event extras are included will typically steer people away from attending your event. If you are going to offer more experiences or items for purchase inside of your event consider making the ticket prices less expensive.
- Does my family plan to go together? Having an event where all ages are welcomed and can enjoy helps with encouraging potential attendees to join. Sometimes planning activities for a family is hard so when parents see all ages are welcomed it's a plus.
- Is there a discount code I can use? Special discount codes can steer a person into buying your ticket even if it is 10% off people love to save money any way they can. It is just like clothing, if something is too expensive but you want it typically you just wait for a discount code and that will convince you to buy it.
Research other events that are similar and their price
If you're looking for ways to maximize your event's profitability, start by looking at previous events that are similar to yours. How did those events fare financially? What do they offer that you don't? What worked well, and what didn't work? This gives you insight into what is a fair price and what is not for your event.Offering varying ticketing options
You don't necessarily want to charge $100 for a VIP experience; maybe you'd rather give attendees access to exclusive merchandise while giving them a chance to meet speakers. There are four common categories of tickets: regular tickets, general admission special access, group discounts, and targeted discounts.
Another option is to use tiered pricing. For instance, you could set up tiers based on age groups, where younger fans can attend for less money than older ones or certain groups can have certain prices for example someone who is a member receives a lower price.
Other than special ticketing for certain groups, you can offer different offers to anyone. This includes having an early bird option, such as a discounted ticket that comes with perks like priority seating. If you have limited space, you could even have a premium option that gives guests access to special events within your event.
Finally, you could simply let attendees choose their own price. Letting people decide how much they want to spend makes it easier to know whether you've priced your event correctly. This option works well for charity events or events that do not require a lot of time, effort, or money to arrange, so no matter what price people decide to pay your costs will still be covered.
Experiment with pricing as you plan more and more events
Lastly, if you want to grow your audience, raise your prices gradually. Don't just jump straight from free to $50. Instead, start small and see how many people show up. From there, you'll know whether you need to continue increasing your prices, or if you've hit a sweet spot.
There are many ways to figure out the best price for you and your event, trial and error is part of this process so if you don't get it right the first time don't let that discourage you from planning more events in the future that require attendees to purchase tickets. Business Events
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