Calculating event ticket prices for dummies
Calculating the event ticket prices is one of the vital event planning steps. Setting the prices too high may cause the lack of attendees. Setting them too low won’t let you reach the break-even point of the event. Every event organizer should learn the gentle art of balancing the price of the ticket between the budget and VIP solution. Check our tips and master this trick.
Event planning basics: What builds event ticket prices?
The math is rather easy. First, you must consider how much this all will cost you. Budgeting is one of the most important of event planning steps.
The core of event ticket prices – event cost
Event cost includes such obvious elements like:
- the venue cost
- the catering cost
- the keynotes’ charges
- the security charges
- the insurance
- the marketing expenses
- and so on.
There are also some hidden costs. For example, the time of all engaged employees. Organizing an event is not the mundane, everyday activity of your employees. It takes a lot of resources, and cross-department cooperation to organize an event. And people don’t make it pro bono, or after hours. Their time and skills are valuable. So the time when they work on event also counts as the event cost.
Summing it all up will show you the absolute minimum that you must cover in sponsor and partner fees and tickets. This is your even-breaking point. It’s also good to divide the costs into two categories – the ones that are fixed, and those that can be adjusted. It will be important later if your ticket price won’t meet the even-breaking point and you’ll have to get more creative on budget cuts.
The ‘mantle’ of event ticket prices – your profit
The next component of the price of the event ticket is the profit margin that you add to the overall cost. Simply put – how much do you want to earn by organizing this particular event. Add this value to the event cost calculated in the previous step.
How much should event tickets cost – the basic value
The last key factor is the estimated audience volume. At this point you have to to be realistic and skip the wishful thinking part. Consider:
- the size of the venue
- the size of the audience you can reach
- the number of people that will actually want to attend the event.
No, Facebook event audience that marked ‘interested’ is not the right number. Instead use the real analytic tool. For example, see how many people attended the last edition of the event. Next, check the event community size on a platform like Eventory. Verify your marketing budget. See how many people you can reach via various channels and what is your conversion rate in each of them. Then estimate the size of the audience.
To calculate the basic event ticket cost per attendee use this formula:
(event cost + profit margin)/ticket sales quantity = basic ticket price
And there you have it – the zero point to calculate the right price for the ticket that will both – cover event cost and leave some extra dollars in your pocket.
These are the basic components of the price of your event tickets. What should be your next steps?
How to look for the perfect event ticket prices?
Once you know the numbers, you must adjust the price with some other factors. First of all, do your research. Check the similar events and their ticket prices. And by similar, I mean really comparable. Search for the events with corresponding:
- venue size
- keynotes extras
- marketing actions
- and so on.
Make sure that the event was a sold-out or at least well-attended success. If no one came – it is not the one that you want to benchmark with.
Also, spy a little bit on your competitors. After all,their events gather your potential attendees. You will be able to check how much they are willing to pay for the event. But don’t just copy the price. Compare the value proposition, the date, the brand audience profile and so on to settle your event ticket prices on the affordable yet appealing level. This is important, because some factors may vary. If your company aims at the VIP sector, don’t give them budget prices. According to this information, balance the event ticket prices to the ‘just right’ level.
What event ticket prices are ‘just right’?
Finding the sweet spot between ‘too cheap’ and ‘too expensive’ is crucial when it comes to event ticket prices. Setting an unrealistic event price is one of the top 8 event management mistakes that may cause event failure.
The ‘just right’ event ticket price should represent its value to all potential attendees. What is more, it should also at least cover the event cost if you are aiming at the goals other than financial. In the perfect world, selling event tickets should leave some extra money after you cover the overall event cost.
I’m emphasizing the price-value correlation. It is super-important while defining the ticket price policy. There’s the reason for that. Depending on your audience, the event value may vary. People will evaluate your event according to their personal taste. If you give them overpriced tickets the math is simple – no one will bother buying them and coming to the event. Surprisingly, the same happens when you underprice the tickets. People will perceive it as something that is not worth their time, or even a scam. The price may even indicate the ‘coolness’ of the event and become a clincher to some attendees.
So now you know. The answer to the question of how much should my event ticket cost is: It depends on how valuable it is to your audience. People are looking for the events that are worth their price.
What else to consider while setting event ticket prices?
There are some other factors that may affect the popularity of your event. For example, its date. It may collide with another event that is somehow attractive for the part of your audience. Check what’s happening in your area two weeks before and after the event. If the answer is ‘nothing’, then you’re good to go. However, if any other event occurs, you may want to check your value proposition and maybe rewrite it a little bit. Good news is, you won’t have to top the offer of the competitive event. You just have to make it as appealing to your target audience as possible (that’s why it is crucial to know who they are).
Another important factor related to the audience is if there are any groups especially interested in your event. If so, you may consider making a special discount for these groups. You can easily do it while still keeping the event ticket prices profitable. Remember, that these people may become your promoters. After buying tickets they will tell their friends and colleagues about the event. They may even convince them to join the crowd. Result – more tickets sold!
These are the basic guidelines for setting the event ticket prices. Of course, the prices may change depending on your ticket selling policy. But this is the material for another article. Would you like to read it?