The Price is Right – If You Can Get It

supply and demand

How much did scalpers sell those tickets for?
Jim Cox, holding his All-Star ticket, July 1952. Library of Virginia.

On my recent travels, I saw someone in the Indianapolis Airport wearing a Kansas City Royals jersey. As the World Series was about ready to begin, I, of course, went up to the fan and said, “Let’s go Royals!” – a guaranteed conversation starter.

The Royals fan told me he had season tickets for the past 10 years, and didn’t buy them this year. He said they became too costly per game, as he wasn’t going to as many games recently. But what really got to him was that he looked online at ticket prices for the playoffs, and he could have paid for the cost of the playoff tickets AND his whole season at the high price people were getting for those tickets.

It is simple supply and demand. When the Royals go for 25+ years with no postseason play, you can hardly give the tickets away. When they get hot in the home stretch and make the playoffs, everyone wants to go. And not only do they want to go, they will pay dearly for the experience.

I was working with one of our Efficio clients on setting their bottom-line rates and their bump rate, so they could have inventory rates set based on their demand curve. She was having trouble with the concept and said, “A political issue had to get on this week and we are sold out. They told me to name my price. I gave a rate that was so high I knew they wouldn’t buy, but they did!” The PAC had to spend their money and had to get their message out and was willing to pay the price to do so.

That is why it is so important to price your radio and TV inventory with several factors in mind: what the demand and supply is, what you need to get to your goals, and what the market will bear. If you can’t supply the right number of viewers and listeners in a demographic, the demand will be lower. If you under-price and sell out, you won’t have enough spots left to sell to reach your budgets. And if you are pricing too high from the get-go and buyers can get the same viewers/listeners elsewhere by spending less, then you will have plenty of inventory as the demand will be low.

For most of you in sales management, this is second nature, although there are tools now to help you with your pricing so you don’t have to rely on your gut and get that “uh oh” feeling when the end of the month is looming and the harried traffic director is at your door saying “no mas!” For those of you on the streets, be aware that rates are not designed to hinder your sales.

And, as a sidebar, for those of you in agencies, know that when you place last minute, those in media sales are not trying to stick it to you.

Like opened champagne, fruit and tickets to sporting events, your inventory is perishable. You can hit a home run if you stick to your minimums, keep the goal in mind, and are aware of the marketplace pricing.

By Kitty Malone, Efficio Solutions Manager of Client Services

Halloween isn’t the only holiday on the calendar. Let your imagination run wild with some of these:




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By | 2015-12-24T15:04:53+00:00 October 29th, 2014|Blog, Yield Management|0 Comments