Some businesses are positioned to see greater return on investment in dynamic pricing than others. Wondering whether your business is a good fit for dynamic pricing? Consider these three factors that predict dynamic pricing success.
Trusting an algorithm to make pricing decisions can be intimidating. But a recent study published by the University of Pennsylvania’s Wharton School shows that “algorithm aversion” is normal and can be overcome.
When implemented with accessibility in mind, dynamic pricing provides opportunity to offer lower prices, to increase attendance during off-peak periods for attractions. Zoos, aquariums and museums with a community focus can use this insight to increase public accessibility to their attraction.
Dynamic pricing is a new enough innovation, made possible through modern technology, that even some pricing “experts” suffer from misconceptions about it. Learn four of the most common myths about dynamic pricing and why they shouldn’t prevent your attraction from changing with the times.
Jan Alan Eglen was one of the first to turn dynamic ticket pricing into a cottage industry. He founded Indianapolis-based Digonex Technologies Inc., which through its algorithms has recommended prices for teams since 2009. Pro sports uses dynamic pricing more, but Eglen believes its use will increase in college.
“We are certain that dynamic pricing is the future of all inventory management,” said Emmis Chairman and CEO Jeff Smulyan.
Dynamically priced tickets can change by the hour, day or week, depending on a team’s preference and needs, and prices can go up or down. There are strategies to make money either way.
“Digonex was really one of the first companies…Other companies did it, but it was somebody sitting at a computer, pushing a button – not the way Digonex does it with algorithms.”
Digonex will provide LIDS with an automated system, which will manage and alter merchandise prices to improve sales. The pricing will be based on consumer aspects, including competition, consumer purchasing behavior and additional primary elements impacting the prices.
The system, which is being touted in Britain this week by one of the biggest players in a booming US market, also promises to transform ticketing in music and theatreland…”Dynamic pricing in real time is,” one theatre executive says, “the Holy Grail.”