Budgeting is a major component of an event management professional’s job, and the difficulty of budgeting is most definitely connected with knowing how best to set ticket prices. Set a ticket price too high and your attendance may suffer; or the price barrier will further drive up your marketing costs as you work to reach a larger audience! Set a ticket price too low and you’re basically condemning your budget to drop into the red; it’ll be impossible to breakeven. In other words, you’ve got to strike a balance between “reasonably priced” and “budget friendly.”
That’s about as easy – and pleasant – as it sounds.
Setting ticket pricing is vital task in event planning; potentially it’s your most important job. But what goes into determining the price of an event’s ticket? How can you be absolutely certain to price them in a way that keeps both your client and your guests happy?
Start by estimating your ‘breakeven’ ticket price. Do some quick back-of-the-napkin math.
Total Event Cost / Attendees = 1 Admissions Ticket
Now your job is to build real data into this equation.
First, there are a few unavoidable costs that are generally out of your control. Build all facility charges into your ticket’ cost; and calculate in additional fees billed per ticket sold, a venue may call this an occupancy fee. In addition, your attendees will likely pay a convenience or processing fee if you’re using an online registration service like Ticketmaster or Eventbrite. Also consider if city, state, and local taxes apply.
Now that you’ve accounted for all the unavoidable fees, it’s time to look at all your additional event expenditures; and calculate how much cash your ticket sales need to bring in for your client to ‘breakeven.’ Chart out a roadmap of all event-related costs, including staffing, marketing, equipment rental, transportation, catering, guest speakers, etc. Mash all this hard data together, and you’ve got your total event cost.
Hint: separate costs into two categories – fixed and flexible. If projected tickets sales don’t meet your estimated breakeven point, look to make budget cuts in the areas where you can control your spend.
Next up, projected ticket sales; it’s time to look at how many attendees you expect at your event, this is when you start to see a real ticket price come together. Our back-of-the-napkin calculation is now real take total cost, divide by your estimated number of attendees and see where you land – whether that’s breakeven or turning a 10% profit.
Maybe you do your calculation and your breakeven ticket price is super low allowing a big increase and making you a huge profit! Use caution, are you over estimating the number of attendees, are you underestimating your catering or marketing costs, or did you leave a major expense off the spreadsheet altogether? Double-check your math! On the other hand, does your estimated ticket price need to be ridiculously high, way above market norms? Ask yourself the same questions in reverse. This may be a sign that you need to cut the budget a bit.
Hint: do your market research; know what comparable events charge. Copying is the highest form of flattery (but really, avoid tough lessons those event planners may have already learned the hard way!)
I’ve one final piece of advice. If you’re surveying attendees of your event, it’s worthwhile to include questions about whether or not your guests found ticket prices reasonable. In the event that the answer is no, also ask what price they would consider reasonable. Armed with such valuable information, it should be relatively easy for you to set the price at future events.
Budgeting is difficult and frustrating. Event managers need to juggle countless expenses; all while ensuring they set the tickets at a reasonable price that optimizes attendance and won’t break the bank. It’s not an easy job, but if you’re here, that means you’re the one to do it.