Tuesday, August 12, 2008

Goldstar is not a discount outlet for tickets (GINADOT)

I write about Goldstar a lot. Part of it is that I like them and think they provide a useful service, but part of it is that I think many theaters misuse the service to their disadvantage.

To the customer, Goldstar is a place where they can get a ticket for half price. But to the theater company, it should be a place where they can get their theater and production info in front of people who might not otherwise have seen it.

If your goal is to offer half-price tickets in order to be nice to a particular group (students, TBA members, whatever), just offer them directly yourself. Surely your ticketing system allows you to set up special-priced tickets with "Promo codes" that you publish to those groups. (The open-source ticket system I created for Altarena Playhouse, Audience1st, does this.) If you’re putting stuff on Goldstar, part of your goal is to get new audiences. (Yes, part of it is to get user-written reviews and publicity, but there are sites that offer user-written reviews without having to sell discount tickets, like  Yelp and SFTheaterBuzz.)

There’s an easy way to check if Goldstar is working for you or against you. When their will-call lists are delivered, check to see how many patrons are already in your patron database vs. how many are new.

If most Goldstar customers are new to your list, Goldstar is working as designed. If most of them are already on your list, you’re selling half price tickets to people who should be targeted as subscribers—Goldstar has already served their purpose with them, and it’s time to bring them into the fold. Read this paragraph again, because it follows directly from observations made by the co-founder of Goldstar! The people you’re trying to attract with discount tickets are those who don’t yet know you, which is where Goldstar can help. The people who already know you are not that sensitive to discounts—when was the last time you heard one of those loyal patrons praise your show but complain about the price they paid to attend?—but they can cannibalize your discount sales if you’re not careful. That’s a double whammy—you’re getting only half-price from customers who know you and would willingly pay full price, and on top of that they are depleting the half-price stock that could be put in front of brand new customers.

(By the way, similar advice goes for sending discount notices to your email lists. Those people already know about you, and chances are that most of those who are staying home anyway are not being blocked by ticket prices, unless your theater is staging Hamilton.)

Even worse, one of the benefits of subscriptions (though hardly the only benefit) for the patron is a discount price, but patrons who showed their faith by subscribing will be understandably upset if you then flood the marketplace with discount tickets that makes the cost of single-show attendance the same or less than the cost of subscribing.

And yet, you’d be amazed how often after a show the director or actors will come out and do an ask, and they’ll say “If you liked the show, tell your friends to get tickets on Goldstar.”  That makes no sense to me; they should be telling their friends to get tickets, period, and if the show sells well, Goldstar ought to have very few tickets for sale. Otherwise, all you’re doing is training your potential customers to wait until you get desperate to put butts in seats, and start dumping half-price or comp tickets onto outlets like this. Once that happens, you’re fucked. You basically have established the half-price point as your retail price point, and it’s all downhill from there. Victory is achieved when you’re selling enough seats that you no longer need to offer any significant ticket volume through these discounters.

Goldstar’s idea of enticing new users with a “behavior-changing” discount of 50% is a good one, but there’s no reason to gratuitously leave money on the table.  Keep an eye on your Goldstar will-calls and make sure they’re working for you, not against your long-term growth.

And head over to Jim McCarthy’s sometime blog for a nice 3-part series on “How Not to Discount,” which expands on some of these ideas and reminds you that your discount customers are not the same as the customers who will buy tickets in lower-priced tiers that have a lower face value.