Variable Pricing (VP) and Dynamic Pricing (DP)
Similarities
Both VP and DP are pricing strategies that are used in sporting ticketing on a game-based, rather than season-based approach. The pricing strategies deviate from the traditional sports ticketing approach where ticket prices were set based on the location of the seats alone and that would be done before the beginning of the season.
Differences
On the other hand, VP and DP strategies differ on the timing of the ticket pricing. In VP, the ticket prices for the various games, based on the aforementioned factors, are determined before the beginning of a new season. For instance, the sports team may prefer to add an extra $8 per ticket for the most popular games of the season. For DP, ticket pricing is done within the season and before games and is based on demand. Therefore the teams can change their ticket prices before the game depending on factors such as the weather and the likelihood of the team being selected for playoffs.
I prefer a dynamic pricing strategy considering that pricing is based on game-related circumstances and demand. This approach allows the opportunity to assess these circumstances before deciding whether to purchase one for the game or not.
Price Elasticity
Ticket price elasticity refers to the degree to which ticket prices changes affect the demand. The concept of price elasticity, whether in sports ticketing or beyond is denoted by the formula:
Accordingly, inelasticity (<1.0) refers to when a small price change results in relatively smaller changes in demand, while in elasticity (>1.0) changes in price cause relatively larger changes in demand (Bae, Chiu & Nam, 2021).
Teams Using DP
- MBL-White Sox
- NBA- Toronto Raptors
- NFL- New York Jets
- MLS- Chicago Fire
- NHL- Dallas Stars
Paciolan
Paciolan is a customer relationship management organization involved in ticketing, marketing, fundraising, and analytics. Paciolan can be used to manage the marketing and sales of tickets for sports and entertainment entities. Paciolan has tools for innovation and data analytics used to determine ticket prices based on factors such as the importance of the game and winning streaks among others.