Are discounts a good idea?
The Royal Opera House recently held a ticket promotion for their production of Anna Nicole. The promotion made reduced ticket prices (£1-£25 or $1-$40) available for people under 25 years old, a tactic commonly used to entice younger patrons into the theater. With fingers crossed, the under 25-ers will have a positive experience at the opera and will be intrigued to return again and again with full price tickets. The whatsonstage.com article, Opera Discounts: Do They Deliver, questions whether or not these types of promotions actually lure new audiences back to the opera after the promotion has ended.
Because of the “anchoring effect” (a theory popularized by Nobel-prize winner Daniel Kahneman) people may become reluctant to return to the theater with a full price ticket after acquiring one for only a dollar. They could become expectant of dramatically reduced ticket prices, and would not want to partake in a full ticket price because it is not as a good as a deal. If they know the monitory value is flexible and could be purchased for much less, they may skip the trip to theater until another good promotion comes up.
I have experienced this anchoring affect first hand. Several years ago, I used to work in overly priced retail (Anthropologie) and would receive 60% off purchases. Since I no longer work at this company and no longer receive the discount, I refuse to purchase anything full price from these stores. Even though I shopped there long before I was an employee, I now know the products are not a good deal because they are marked-up much more than they should be and the high price tags are not indicative of quality. If I ever feel like I need to make a purchase from that store, I will wait for the item to go on a serious sale before I even consider laying down money.
As Arts Managers, it is on our best interest to practice promotions that help the longevity of our industry. Do you think the “anchoring effect” theory is applicable to ticket promotions? Or do you think patrons who have received discounts are open to paying full price if it is an art form they are enthusiastic about?