I was recently part of a Twitter interview and one of the things that came up was a question about pricing and market segmentation. This was interesting to me because I often feel like pricing is a big challenge for organizations because the pricing decisions can often feel less than scientific.
More important than a debate about the pricing dynamics is the trend that pricing and empty seats or full seats highlights which is that purchasing power for most income levels has changed a great deal over the past decade or more. This is impacting a lot of our ability to market and sell events effectively.
In 2019, the United Kingdom is set to see the lowest growth in consumer spending in six years due to a number of factors. In the United States, the 2020 presidential campaign seems to be setting itself up as a referendum of decades of growing income inequality. Globally, 58% of consumers feel like they are better off than they were five years ago.
All of this should signal for us that we have to take a different and varied approach to our consumers and how they are making their purchasing decisions.
What does this mean to all of us in the live event industry? Many different things, but here are three ways this trend is impacting us and how we can handle it.
The bell curve has flipped: It used to be considered a given that the bell curve had a huge hump in the middle where most of the market lived and purchased.
Now, the bell curve has flipped and the middle is a lot of times a wasteland for marketing and selling to consumers.
Where the margins are and the opportunities are in many cases are to the two extremes: with the commodity purchase or the premium purchase.
Some of the fastest growing areas in business are on those fringes where you see companies like Wal-Mart or Amazon working to deliver cheaper stuff faster to their customers.
Then you look to the other extreme and you see the market for premium cars growing, premium hotels becoming destinations more than ever, and VIP experiences being the centerpieces of many events and offerings.
How do we deal with this?
Well, we begin by understanding that the middle may not be the best place to try and position our experiences any more.
We can’t do average stuff for average people any more because the Internet has taught us all to expect more or less.
So design your experience with that in mind.
Offer a get-in price that everyone can participate in and that offers the experience at a base level, but also consider ways to take the experience to the other extreme with VIP areas, add-ons, party decks, or exclusive experiences.
Consumer’s discretionary income is challenged in many places: A dollar doesn’t buy what it used to is something we can say at almost any time in history and all nod our heads in unison. Because, inflation and purchasing power seem to always be changing.
Currently, in nations around the world, we are seeing consumer’s spending power slip due to increased costs associated with housing, food, health care, and other essentials.
What does this mean to all of us?
Well, it means we need to be considerate of the world that our customers live in.
This may mean offering up more lower or entry-level offerings to ensure that you have an event that has enough people to create the atmosphere or experience you want.
It can also make the idea of having multiple distinct offerings more important than ever before because we are likely appealing to two different edges of the bell curve now.
And, we likely need to think through how we can make our experience feel like a once in a lifetime opportunity for people to splurge on.
The key for all of us is to recognize that our consumers are making a choice that reflects their circumstances and those circumstances are changing in a lot of ways that we may not be considering right now.
Customers have more options: If there is a theme within a theme, this is it.
The most relevant idea to keep in mind is that as consumers are putting more value on experiences, we are finding that more people are creating experiences that they can offer to consumers to win their business than at any time in memory.
What can we do about this trend?
We have to begin by making certain that we are thinking about what we want our guests to experience when they visit us and work with us.
This likely means we need to be more thoughtful about everything we are doing and deliberate in creating an experience that is exceptional and speaks to our specific market.
Second, we have to recognize that because consumers have more options, it is going to be much more difficult to break through to these consumers and get their attention.
This means on top of being more thoughtful in the creation of an event, we have to get more creative in the way we market and sell our events so that we can break through the clutter of experiences that are trying to demand our market’s attention.
This may mean going to the extreme of using PR tactics like the way that the Warrington Wolves sent their mascot with binoculars to a rival’s match to “spy” on them as a way to draw attention to the Wolves. It could be creating an extremely diverse festival line-up like the Miami Beach Pop Festival. Or, it could be by wrapping yourself in discretion, mystique, and luxury like the Four Seasons.
The key is that as our market is getting more options and attention, we have to spend more time thinking about how we are going to make ourselves different.
The same goes for changes in spending power. As our customers see their financial lives change, we have to recognize that this is going to impact their buying decisions and we have to act accordingly to ensure we can still be competitive.