Last year the Atlanta Falcons started a move called Fan-First Pricing in their brand new Mercedes Benz Stadium, significantly lowering concession prices at their games. These included $2 for a Coca-Cola in a refillable cup; $2 for a hot dog, pretzel or popcorn; $3 for waffle fries, a pizza slice or nachos with cheese; and $5 for a Bud Light or a cheeseburger.
As reported in Forbes, the team saw direct monetary benefits from this innovative approach in the form of a 16% increase in fan spending on food and drinks despite a 50% price reduction compared with their last season in the Georgia Dome. And Falcons' 2018 attendance is flourishing, drawing close to 75,000 people a game, 8th best in the league.
By comparison, the Washington Redskins have averaged just 58,000 in two games, 5th lowest in the league. (A 2016 study found that the Redskins had the highest at-the-game cost at $272.) Even the Atlanta United soccer team—which also features Fan First Pricing—has drawn crowds of more than 70,000 this year and is averaging 50,000.
Similarly, for publishers, pricing should not be cast in stone. I recall Benny DiCecca, then the CEO of Wellesley Information Services, asking a SIPA audience, "Are you asking the right questions?" He spoke of the research and surveying they did before creating events. "One question we weren't asking was, 'Are you willing to pay to go to an event to learn on this topic.' [And what would you pay?] There is certain information that people would open up a checkbook and some people would not."
Sometimes you might want to just get people in the door, and then make it up in other ways. Brenton Flynn, publisher, Investing Daily, once told us about not having success with a $700 product. So they went to a much lower buy-in of $60, and it worked. Some 20% of the people who paid $60 then bought that same $700 product, discounted to $600 after the buy-in. "Think about how you sequence your offers and price points," Flynn said. "That generated thousands of new subscribers for us."
People pay for what they want, not necessarily what they need, Lynn Freer, president of California-based Spidell Publishing, has said. "People really need to understand this." Krystle Kopacz, CEO of Revmade who will be speaking at BIMS, has warned, "don't underprice. In media we're so used to discounting, and then not accounting for all costs. You need to ask [your customers] the right questions."
There are just too many variables to not at least test different prices. Columbia Books & Information Services found success by offering monthly subscriptions for their Lobbyists.info service. "For a long time we went by the all or nothing mindset," said president Brittany Carter, "but realized that rather than try to push people to buy something in the way we thought they should, we... started offering a monthly subscription that was a higher rate than if they paid all at once..."
Bob Coleman of Coleman Publishing once told me that the initial pricing for his new certification course was $995, with $795 early bird. The course quickly proved very successful so he "bumped to $995 early bird for the second course." List is $1195. Testing is crucial, but in Coleman's case, he simply made an important course correction.
As did the Atlanta Falcons. At Sports Business Journal's 2018 AXS Sports Facilities & Franchises conference in Detroit earlier this year, team president and CEO Rich McKay talked about the other benefits that were a byproduct of Fan-First Pricing. These included:
Nothing beats that last one.
- Being in the top 3 in the NFL in overall gameday experience rankings;
- Ranking 2nd in family-friendly entertainment;
- Ranking 2nd in arrival experience – an average of 6,000 fans per game entered the stadium a hour earlier. That significantly lessens traffic and boosts merchandise sales, which were 90% higher than the previous year.
- People said they will come back.