Never Leave Money on the Table
Ticketmaster, Oasis and ‘Dynamic pricing’. Words that have not been far from the lips of many people I’ve spoken to this week.
A lot of people have been quick to use the phrase ‘price gouging’, and to be fair, they’d be right. The Oasis reunion was always going to be oversubscribed, so there is very little that is ‘dynamic’ about the decision to double or triple ticket prices.
By chance, a couple of days ago I happened upon a clip of Rick Ross being interviewed. He’s asked how he’s going to get to ‘3 billion’ - his answer was that he doesn’t leave money on the table…. To illustrate what he means by this, he talks about how on a Friday night it will cost you $150k for him to perform at your party, whilst on a ‘Tuesday’ - if he’s sitting around ‘doing nothing’ - then it’ll be a mere $75k. If a customer doesn’t have enough money for the ‘peak service’ then he’ll find a way to work within their budget - but it’ll be on his terms. Over time, he rightly adds, what’s the cost of turning away the customers who might be working within specific financial constraints? You add a load of $75k customers to those $150k customers and it’ll add up to a big number, if only you’re able to think long term.
A proper demonstration of ‘dynamic pricing’ and the evident benefits to both consumer and brand that the technique offers. Brands sell inventory that might have gone unused. Consumers can find ways to buy things they want, as long as they’re flexible about how and when they access a service or good.
Now, you might argue that Oasis were also subscribing to the notion of not ‘leaving money on the table’. However, to market the price of their concerts at £150 and then present customers - many of whom will have spent hours ‘in line’ waiting for the chance to buy - with an actual cost that was 3x-4x bigger, is pretty dispicable. The value of brand is in being able to command a higher price for your product. If they’d had the confidence to ask for that much money, I would have liked them to have been ballsier about it and market the tickets at those prices. Many will argue that this model disincentives ‘touts’ or the grey market, but in reality those people will find a way. They always find a way. In stark opposition to Ross, this just feels lazy. Ross works hard to convert the money on the table, Oasis created an ambush - do ya know what i mean?
