Early bird pricing isn’t a new concept. Airlines have been doing it for a very long time. For events, Scotland’s T in the Park pop music festival pioneered early bird ticket prices according to The Economist, and today, it’s common practice to offer a discount to people who purchase event tickets in advance. Why? Because early bird pricing has been proven to increase overall sales and for a very simple reason – psychology.
5 Risks if You Don’t Offer Early Bird Discounts
Before I get into psychology and consumers’ perceptions of price, I want you to think about how advance ticket sales affect you in terms of boosting cash flow. I spoke with AttendStar President Gary Bradshaw about this, and he explained that advance sales can account for up to 80% of your sales! At $20 per ticket for 20,000 people, that adds up to $320,000 in cash flow that you can have in your hands before the event. Think of how you could use that money!Advance sales can make up 80% of your event ticket sales! Have you set up early bird discounts?Click To Tweet
To clarify, Gary described five key reasons you’re putting your event at risk of failure if you charge the same price for advance ticket purchases as you charge at the gate.
1. Unfocused Marketing Investments
Discounted advance ticket prices generate an early jump in ticket sales. Yes, you’re giving up some ticket revenue later, but that jump in early ticket sales gives you so much more (as long as the discount is reasonable – I’ll get into that more later in this article when I talk about the psychology of pricing).
One of the most important ways that early ticket sales helps you is by enabling you to better gauge your advertising and marketing efforts. Otherwise, you run the risk of spending too much or too little, and both can put your event at risk of failure.
What happens if the event performers have to cancel at the last minute? Without advance ticket sales, the event wouldn’t happen! Whether a performer gets sick or a tragedy forces an entire team to cancel an appearance (and unfortunately, it does happen), if you don’t sell tickets early, your event will be a complete failure.
3. Low Turn Out
Many things could cause low turn out to an event at the last minute. One of the most common is bad weather. If storms are forecasted the day before or the day of the event (and especially if your event is outdoors), it’s practically guaranteed that attendance will drop. Ticket sales could stop completely. If you sold tickets in advance, this might not be a disaster for you, but if you didn’t, you could find yourself with a big problem.
4. No Attendee Communications
When you sell tickets in advance, you get attendees’ contact information including their email addresses and possibly their cell phone numbers. Not only does this give you more opportunities to market to them now and in the future, but it also gives you a way to communicate with them leading up to and during the event.
In addition to these marketing opportunities, you can also communicate with attendees about weather issues that might delay the event’s start time or any other last minute changes or important updates. This type of communication goes a long way in terms of building relationships with your attendees and giving them more reasons to say positive things about you and the event.
And guess what happens next? You get positive word-of-mouth marketing that money can’t buy!
5. Less Effective Sponsor Support
Advance ticket sales give you more ways to support event sponsors. Let’s face it. The more you can give to sponsors, the more likely they’ll be to invest in sponsoring your event.
When you sell advance tickets and get attendees’ contact information, you can send weekly emails about the event and mention your sponsors who want to be seen by attendees multiple times.
Tapping into Consumers’ Emotions to Boost Ticket Sales
Now that you understand some of the top benefits for selling tickets in advance, it’s time to understand why you should offer a discount on advance tickets (i.e., early bird pricing). Bottom-line, you need to give people a reason to buy tickets in advance rather than at the gate (or door). As I mentioned at the beginning of this article, the reason is the psychology of consumer behavior.
Marketing experts have spent years researching pricing strategies and how psychology affects consumer buying behavior based on their perceptions of price. Research about how time restrictions work by professors at Boston University and Boston College and published by The Association for Consumer Research revealed three factors that explain why early bird pricing discounts work: deal evaluation, anticipated regret, and urgency. Let’s take a closer look at each.
1. Deal Evaluation
It’s human nature to compare prices. Everyone wants to get the best deal, but we don’t always choose the best deal. Why? Because of a little thing known as convenience. If the best price doesn’t equal the most convenient buying experience, then we balance the pros and cons in our heads and make purchase decisions based on those evaluations.
In other words, consumers actively participate in conscious and unconscious comparison pricing. That comparison pricing might happen between brands, distribution channels, or even timing (i.e., advanced vs. at the gate ticket purchases).
This is where businesses use a pricing strategy called price anchoring. Psychological research has found that when you place a higher priced item next to a lower priced item, sales of the lower priced item will increase. The full ticket price is your price anchor and the early bird discount price is the lower comparative price that will inevitably boost your advance ticket sales.
As the researchers from Boston University and Boston College explain in their report, discount levels and time restrictions impact consumers’ rational responses by affecting their evaluations of a deal. Ultimately, advance ticket sales ensure that your event isn’t a failure even if weather problems, performer cancellations, or other surprises pop up in the weeks and days leading up to your event.
2. Anticipated Regret
The Boston University and Boston College researchers also found that discount levels and time restrictions on those discounts impact consumers’ emotional responses to those promotions by affecting their levels of anticipated regret if they miss out on the perceived deal.
Evidence from their studies showed that anticipated regret and urgency (see #3 below) actually add even more impact to the purchase decision than deal evaluation showing that humans are more affected by emotional (anticipated regret) and visceral (urgency) responses to promotions than rational (deal evaluation) responses.
Bottom-line, don’t underestimate the power of anticipated regret—of missing out on a good deal. Early bird pricing works because of this powerful human emotional response.
Finally, the Boston University and Boston College researchers discovered that creating a greater sense of urgency by offering a limited time discount price (such as an early bird ticket discount), sales increase but only when the time limit isn’t too long. By giving people too much time to take advantage of the special discount price, there is no sense of urgency, so they won’t take action. Buying tickets to a future event drops down lower on their To Do lists.
However, you don’t want to make the window to get the early bird discount too short or consumers will perceive it as an inconvenience. Remember what I said about deal evaluations earlier in this article? If a promotion is perceived as inconvenient (even a price discount promotion), consumers will inevitably make a psychological leap and lower their valuation of the deal, which means lower purchase intent and fewer sales for your event.
While not covered in the Boston University and Boston College study, another psychological component that must be included here is pride. Consumers love to share their stories when they get a good deal on something. They’re quick to tell their friends and post about it on Twitter, Facebook, and other social media profiles. They’re proud of their ability to find that deal, they’re excited about what they purchased, and they want to talk about it.
Guess what that means for you and your event? Free word-of-mouth marketing, which usually leads to even more ticket sales, particularly advance ticket sales if your customers can share the offer with their own connections. You can make it easier for them to share news about your events using AttendStar’s Ticket Buyer Buzz feature.
All of this powerful word-of-mouth marketing means you might not have to spend as much on your own advertising and marketing investments. In other words, not only do advance ticket sales boost your cash flow, but your net income should increase, too.
Getting Your Advance Ticket Promotions and Early Bird Pricing Right
Early bird pricing does work. The trick is making the discount big enough to generate early ticket sales while still generating a comfortable return but not so big that consumers’ evaluations of the deal create negative perceptions (e.g., the discount is inconvenient or isn’t big enough to make it worthwhile). In other words, the discount needs to be convenient and big enough but not too big.
AttendStar President Gary Bradshaw recommends having a $5.00 spread between advance tickets and at the gate tickets for a $20 at-the-gate ticket event. Gary shared that AttendStar’s number one selling air show of all time had an advance ticket price of $15 including all fees, and the event organizers made a fortune on food sales. In other words, they kept the ticket price low and made up for any lost revenues on ticket sales with ancillary sales (i.e., food). This is yet another pricing strategy based on consumer psychology!
Of course, offering early bird pricing is just one of the many things you should be doing in the months leading up to your event. Be sure to download the free Event Planning Checklist so you don’t miss anything important in your event preparations!