You can’t overprice the tickets; it is a mass event. Under-pricing means you are willingly choosing to bear losses.
It is essential that you deliver the value to your runners, through the event, at a profit. That means, you successfully run the marathon event and are standing with a clear margin in the end.
Indeed, appropriately pricing the tickets is one of the challenges that most of the marathon organizers have to deal with.
And, we know that!
For that, we have brought forward this article that will shed some light on one of the most critical aspects of organizing the marathon event, pricing.
Here are the steps to follow while doing the calculation:
1) Figure out the break-even
A revenue figure that neither brings you profit nor losses is the break-even point. First thing first, you need to figure out that number.
Begin by adding all your primary, secondary, and miscellaneous expense. You should be very detailed at this point. Discounting on any of the costs will result in a wrong figure. Be critical and practical.
Once you have in your hand the total expenses, divide it by the expected number of attendees. Be very conservative with this number.
Now, you know the minimum price of the ticket at which you will cover up all your expense.
2) Ascertain the likely number of tickets that you can sell
You have to be very stern with your statistics here. Start with finding out all the offline and online sources through which you can sell your ticket.
It could be through social media platforms, Google Ads, Organic search (study the traffic that reaches to your event website through a search engine using Google Analytics), corporate connections, friends and family, events and meetups, fitness centers, etc.
By now, you have the minimum price of the ticket and the total number of tickets that you expect to sell. It is time to add a profit percentage on that. Keep your margins around 10% or less.
Understand, the idea should be to attract a more significant headcount. In the end, it is a mass event, and the ultimate success will depend on the size of the crowd that turns up. You can make profits through economies of scale. That means more sales with low margin.
3) Research similar events
Study all the marathon events that happened during the year. Some of the essential aspects (the list is not all-inclusive) study would be:
• How many people participated?
• How many categories of the run (Full marathon, half marathon, 10K, 5K, 3K) were there?
• What was the price of tickets under each category?
• How many people turned up under each category?
• What was the total expense?
• Can that cost be managed more efficiently?
• Do you have any edge of any kind (venue, celebrity participation, elite runner’s participation, etc.) over them to price higher?
• Should you rate a little lower to grab a bigger crowd?
4) Evaluate your pricing structure
After you have done your research, sit with all the numbers and re-evaluate the price of your tickets. You will now have a much candid perception of how much to price your every ticket for.
The chances are that the price of your tickets is higher or lower than what you had tentatively decided while calculating the break-even. Nonetheless, it is best to keep the cost of your ticket closer to the perceived value you calculated in the beginning. That will improve your chances of falling on the profits.
Of course, you can propose early bird offers and other exciting bargains to upsell and convert. However, do not create a prominent margin over there from the break-even pricing. An up and down to 10% should be doable.
5) A few helpful pricing strategies
Going forward, let us take a look at a few pricing strategies that will help you reach your goal faster and smarter:
• Early bird pricing – You can kick-start selling your tickets with an early bird offer. However, be strategic while launching the early bird offers. Make it first come first serve and keep a cap on the number of tickets you would like to sell under this scheme.
• Time-based pricing – This kind of pricing strategy is basically used looking at the demand and supply of the product. Looking at the demand during the early bird offer you can surge or plunge the prices of the ticket.
• Odd/Even Pricing – Under this pricing strategy, people keep the price of the tickets ending with an odd number. Something like 1499, 995.95, 1099.01, etc. Apparently, this approach affects the psychology of the buyers and encourages them to buy.
• Group Pricing – This is also known as price discrimination. Under this kind of pricing, you tend to put customers in a group based on similar traits or tastes and offer them the prices accordingly. For examples, you can have a separate pricing for senior citizens or women runners, etc.
• Partition Pricing – When you apply this style of pricing you break the total price in to one large base price and then you charge a tiny surcharge over that. For example, you can charge for the participation and then you charge a small extra for the t-shirt or on-door service, etc.
• The law of fewer numbers – This one is yet another pricing method that hits the psychology of the buyers. The rule is straightforward. To a prospective customer 999.00 looks bigger than merely 999. Or, 2200 looks smaller than 2,200.
• The rule of 100: When you are offering a discount, always show the bigger number as it catches better attention.
For example, if a certain ticket costs 1000/- while offering a discount, you can say Flat Rs.100 off; instead of saying Flat 10% off. Whereas, if you are also charging a small charge of say Rs.50; instead of mentioning Rs 10 off, you can exclaim Flat 20% OFF.
• Upscale the product: You can add a few frills and laces by including some add-ons like T-shirt, accommodation, sipper, or some kind of gadget, etc. It is like creating a premium package.
• Priming: A little priming of your rate card can do wonders in motivating the buyers to make the purchase. Design it well so customers can see all the offers candidly. Also, always put your most expensive products on the top and the rest of the items in the decreasing order.
Correctly pricing your product can make or break the success of your event. A little bit of strategizing will help you secure a victory, and you will come out with flying colors.
If you have organized a marathon before or are planning to launch sooner, please feel free to add your exclusive insights on this topic in the comment box below.