Looks like yesterday's discussion merits a follow up. I've got two more reasons why we should approach dynamic pricing with caution:
1. Creates too many choices - Most performing arts organization have too many pricing options as it is. We have different prices based on day of the week, seat location, etc. It's pretty well established what happens when we have too many choices. It paralyzes us. It causes us to default to the status quo. Neither of this things are good for the performing arts. I wonder if dynamic pricing will add another unecessary to the mix.
But that's just a small objection. Here's my bigger one:
2. Could create the wrong relationship with your audience - I touched on this yesterday but let me drill down a bit on it here.
As many have noted, the airline industry is the grandfather of this idea.
Remember the last time you bought a plane ticket? If you're anything like me it became a sort of game, you versus the airlines. Your goal was to get the cheapest ticket possible. The airlines implied goal was to get you to spend the most they could get.
So most of us have developed a fairly ruthless attitude toward the industry. To save $50 we will switch dates, switch airlines, switch airports, whatever.
From the airlines perspectve, they can live with that because they are going to make a profit at whatever price we buy it at. Plus flying is pretty much a necessity purchase if you need/want to travel long distances.
But imagine if . . . after I had tangled with United Airline for the best price they sent me a letter informing me that the price of my ticket only covered part of their costs . . . and that I should really consider a donation to cover the rest of the expenses.
I'd laugh my ass off . . . because that's not the relationship we established. Their pricing model looks out for their own best interest, thus I need to look out for mine. I worry that overuse of the dynamic pricing model in the arts will create a similiar effect.
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