Brilliant Pricing Strategy For Events
Developing a pricing strategy for an event often just consists of determining the “Pre-registration price” and the “Day of the event price” (aka “at the door”). The issue with this approach is that it only provides two options and does not take advantage of consistent, known human psychology as it relates to registering for events. This psychology can be characterized in one word: procrastination!
I recently registered for an event and came across a very clever pricing strategy that really takes advantage of natural human tendencies to put off registration for events until the last minute. The event is called the Tough Mudder (see ToughMudder.com). It is a 10-12 mile trail run with 20-25 pretty hardcore military style obstacles, designed by British Special Forces. The pricing schedule for the event I signed up for is in the graphic above.
If you take a look at the pricing schedule, you’ll notice a couple of things. First, there are two possible days which you can run the race – Saturday or Sunday. Second, there are several pricing “bands” or date ranges, with prices increasing right up to just before the race. The race dates for this particular event are December 3rd and 4th and registration, per this schedule at least, ends on December 1st.
The pricing approach used by the organizers of this Tough Mudder event has several advantages over the typical “pre-registration” and “at the door” scenario that you usually see. First, by offering two days, the organizers can place a premium price on the supposedly more desirable day – Saturday. A collateral benefit to this approach is that, by earning revenues for two days instead of just one, it allows the organizers to leverage the effort they have to put into negotiating the venue contract and other event related contracts, thus likely making the overall event more profitable. Second, the additional pricing “bands” are pure genius. They allow the organizers to extract a premium from those who cannot help but procrastinate, even in the face of continually escalating prices. Also, since many people probably can overcome the procrastination tendency in order to save some money, they get a bunch of people to register earlier than they would have otherwise. This allows the organizers to plan better for additional promotion necessary to fill the event and for any other variable (participant-count-related) expenditures.
I understand that this approach, particularly the two-day angle, cannot necessarily be applied to all events, but the pricing “bands” can be applied in most situations. This is true regardless of whether the events are “virtual” (online) or in-person. It does not matter whether folks are contemplating registering for an in-person or a virtual event; if procrastination is a possibility and there is no external stimulus or incentive to change it, the vast majority of potential entrants will put off their registration until the very last minute.
Consider how you can apply such a pricing strategy to your upcoming events.
P.S. Another nuance to notice is the countdown clock at the top of the graphic above. You cannot see it in a static picture, but on the registration site, this clock is actually counting down the “time remaining before registration fee increases”. So every time you go to the site and think about registering or procrastinating a bit more, the clock is there to remind you that time is ticking. Brilliant.
I look forward to your thoughts and comments. Leave a comment below.