You might think that event planning is easy until it gets to the finances. Budgets are unfortunately a fact of event planning that must be considered if the event is to be successful.
How do you price an event in the Chicago area without overpricing ticket prices or undercutting your budget? It is a delicate balancing act to ensure patrons leave feeling like they got their money’s worth.
Even if you hired an event planner to help make the occasion spectacular, you might still be in charge of the event finances, and that includes ticket prices. This task can be daunting to those who are new to event planning.
In this article, you will learn the answer to “how do you price an event?” with help from the experts at Anticipation Events, an event planning company in Chicago.
This comprehensive guide will help you learn how to price an event of any kind, whether you are hosting a gala, a banquet, a convention, or anything in-between. You will learn everything you need to know about the different stages of an event, the right and wrong way to price an event, as well as several proven strategies depending on your event type.
the wrong way to price an event
There is a right and a wrong way to price an event, and unfortunately, the lines between the two can blur. [1] For many new event planners, there is no clear boundary between pricing strategies, and it can be difficult to come up with the right prices.
The principles are the same whether you are working as an event planner or if you are an event host. Your event should be considered a business, and it is your job to get it to turn a profit, or at the very least, break even.
This is a challenge because businesses are often measured in years of success, not a few days. It can take several years for any business to even begin breaking even, and many businesses fail before their fifth year. Your event must be successful the first time around if it is to continue, whether in your reputation as an event planner or the next year in the case of annual events.
If you hire outside help rather than plan the event yourself, you should always choose an event planner that considers these budgeting concerns. Likewise, always consider the event planner’s fee into account when calculating expenses.
Many first-time or inexperienced event hosts tend to price their tickets based on what “feel’s right” to charge, or what they think people in the locale will charge. While targeting your demographic is an important part of pricing, you may be surprised to learn what people are willing to pay for the right experience.
Events should never be priced without prior research or without at least consulting the event’s expense sheet. Doing so will only lead to the event failing and the inability to turn a profit over the hard work and vendor expenses it took to host.
the right way to price an event
There are several stages to event planning. Budgeting should come near the beginning, and you can use your budget and estimated expenses to begin planning the ticket price. The final price can come mid-to-late in the planning phases as you coordinate with vendors and see what will and won’t work in actuality.
Pricing an event properly can be a difficult task. To make a profit, you must make sure that all expenses are taken into consideration for the event. This includes day-of expenses such as any operating costs, vendor costs, and any hidden costs during the pre-planning phase.
Likewise, depending on the location of your event, this can change how much you can charge patrons. [2]
For example, an event in downtown Chicago will be more expensive to operate than in the suburbs. If the venue is of high quality, you will be able to charge more for the event. Ease of access, such as major highway access and clearly defined roadside signs, increase the patron’s experience of the event even before they enter the event.
Every quality of life luxury and activity provided at an event will leave patrons feeling more and more like their money was well-spent and the ticket price was worth the experience. [3]
For these reasons, when planning an event, it is important to balance day-of activities and patron experience with the overall cost of the event. There are corners to cut and amenities no one will miss, such as little party favors here and there, but the experience of the event is paramount, and where most of your budget should go. That will allow you to price your tickets higher and expect a profit from the event.
This type of pricing strategy will allow you to also prioritize patron experience. The venue, of course, is paramount and should be both rich and relevant to the event, but relatively easy to access.
On the list of priorities, it will soon become clear what corners should be cut to reduce expenses and provide a better experience overall. For example, it is not worth adding the small knickknack party favors if it means getting catering from the local grocery store, rather than a professional chef.
event pricing strategies
Several event pricing strategies work like a charm depending on the event you are hosting. You should choose the strategy that works best for your event.
The most important thing to keep in mind is that, if you are hosting a one-time event, your ticket cost should allow you to make a profit either in the volume of tickets sold or the price of tickets sold.
Repeated events can typically afford to follow in the footsteps of a traditional business and take a loss in the first few events for the sake of marketing and community awareness.
For large, multi-day events, multiple event pricing strategies are typically employed. For events open to the public, these strategies are often used in addition to well-timed marketing pushes.
- Cost + Pricing
This is one of the most popular methods of pricing strategies for events. This keeps the math simple and eliminates complicated cart functionality needs for online sales.
To calculate sales for this method, all you need to do is total up all costs, including day-of expenses, and add your desired profit margin. Divide that by how many attendees you will have, or can expect to have, and you have your ticket price.
Of course, as we discussed above, patrons do not care about ticket price, they care about value. If you aren’t providing enough value to justify the ticket price that comes out, you will have significantly reduced sales – or worse, a bad event reputation.
- Early Bird Sales
Early-bird sales are beneficial when you have the marketing and time to back it up. These are a great way to start generating buzz on social media and through word of mouth. Interested attendees will often book their tickets in advance to get the Early Bird Discount and spread the word to friends and family who may also be interested in attending.
Early-bird sales can be limited by time until the event or through the number of tickets, which taps into the feeling of scarcity – patrons don’t want to lose the ability to get their ticket at the discounted rate, so they’re more likely to buy sooner rather than later.
With early bird ticketing, you will have a lot of patrons who discover the event but choose not to buy early bird tickets. They may have a scheduling conflict or may be unsure whether they want to buy a ticket for a variety of reasons, so you will have a quiet period after early bird pricing ends, followed by another spike in full-price sales closer to the event from patrons who discovered your event through early bird sales.
This is, of course, assuming you never stop your marketing efforts through any part of the ticket sales process.
- Late Rates
For shows and other entertainment events, late rates are useful to fill empty seats or sell the remaining number of tickets needed to meet a minimum. This strategy is typically employed towards the end of ticket sales, such as the day of a show for a Broadway play, or the week leading up to a big convention.
These tickets are heavily discounted to entice patrons to buy, even if price or scheduling is a concern. The downside is that these tickets are generally lower-quality seats or lower-ticket privileges if you are working with multiple tiers of tickets.
VIP tickets, for example, are typically available in lower quantities to both provide exclusivity, as well as prompt the highest-priced tickets to sell first, before the lower tiers.
- First 100 Reduced
This is a brilliant way to begin marketing your tickets if you do not want to do traditional, timeline-based early bird pricing. This instead ensures that only the first set number of tickets are sold at a reduced rate, leading to a rush of sales as attendees do not know when the discount will end. Fear of missing out on the discount will drive them to buy a ticket faster than the opportunity to get normal tickets, even at the discounted price.
If you are selling tickets online, it is best not to show how many tickets have been sold, at least until you get to the 75% sold mark. No one wants to be the first to buy, and low ticket sales can be dissuading to patrons on the fence about the event regardless of how long the sales have been open.
The downside to this method is that, if you don’t sell these tickets, early bird pricing will last a long time, making the event look unwanted or uninteresting. Since many people attend events for the experience, and the social aspect is a strong experience, the volume of ticket sales can be an enticing show of interest. Nothing draws a crowd like a crowd and selling out of tickets fast is the best way to show potential patrons that there is a crowd waiting to get into the event.
- Group Booking
Group booking is a common pricing method for events that want to receive the maximum number of patrons possible.
Single tickets are typically sold at a premium, with a discount for buying a certain number of tickets at once, or an increasing discount for every extra ticket purchased. This encourages friend groups and families to band together and buys tickets all at once.
- Supply and Demand
This pricing method is not used quite as commonly as others and it requires a limited number of tickets, but it is still a valuable method depending on the type of event. In this method, tickets are priced according to supply and demand, meaning the first tickets sold will be less expensive than the last few sold.
For this reason, patrons are encouraged to buy tickets earlier rather than later. As the supply of tickets dwindles, the demand increases and supports the increase in price for the supply.
- Exclusivity
As common with galas and fundraisers, only a certain number of people are invited. Sometimes, these events are by invitation only. The exclusivity of the event means patrons are more likely to pay more for the experience.
Offering tickets to only a select number of people allows you to price the tickets higher without having to worry about the volume of tickets sold. The downside to this method is that patrons will be expecting a higher-quality event than they would expect from a public event.
- Cash Donation
How do you price an event that you want to offer for free? A cash donation is the best strategy in allowing the public to attend the event for free, but still encourage them to donate what they think is worth.
Make the cash donation option available on pamphlets, at the front desk, or during the reservation process. Include a suggested donation to provide some guidance, as many patrons will avoid donating altogether if they are afraid of offering an insultingly low price or overpaying for the donation. Patrons are more willing to donate when they don’t have to guess.
This does not guarantee that you will get any money from patrons, so you must have other methods of recouping costs in the event, such as paid panels, booth fees, or paid activities.
hire your event planner in chicago
It’s time for you to truly enjoy what you’ve put together by hiring an event planner to help you with the pre-event planning as well as day-of-event coordination. Anticipation Events is the top-rated event planning service in Chicago, ready to make any event spectacular.
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