Dynamic pricing comes to Major League Baseball

Anyway, this is not new to baseball. The Colorado Rockies were one of the first teams to charge differently based on the opponent.

There is a big difference between setting prices based on opponent at the start of the season, and letting prices float right up to the day of the game based on real-time factors.

Well guys, a rain storm on a week day can kill a baseball game, but that's 1/8 the total time a park is open. Why should a park discount tickets to 1/2 price or so when it's pouring?

You're missing it. This is not about the number of rides you get in, time in the park, etc. It's about varying price to change the supply/demand curve on any particular day. And, that matters on a rainy day because average guests don't think in terms of number of rides or time, either.

For example, one of the classic pieces of advice for visiting Cedar Point: if the forecast for the stretch from Detroit to Cleveland is for rain in the morning, but it's expected to clear in the park by mid-afternoon, GO. The park will be very quiet, but the day will be great.

The once-a-year visitor isn't thinking the way an enthusiast would---they're thinking that they want to go when it's going to be a "nice day." Well, so does everyone else. By floating the price point, you could encourage more people to "take a chance" on a not-as-nice day by lowering it, and extract more revenue on those picture-perfect days that everyone wants by raising the price then.

Edited to add: At some level, one goal for any theme park operator is to have a consistent attendance, day in, day out. This prevents both those days with so few people that it's barely worth opening the park, as well as the days when you get slammed with more than you can really handle. By floating the price based on prevailing conditions, in real time, you can better manage your attendance yields.

That's exactly what I'm saying, Gonch. The expectation is different, and it's not dynamic. It's more like a movie theater. When I go to the one nearest me, I expect the matinee to be six bucks, whether it's a Tom Hanks show or Faster and Furiouser. If I were going to an amusement park to find the price was too high, I'd turn around and be pissed off. I would not likely be alone, and that would not exactly build good will.

I think that's why this idea would likely change consumer behavior away from last minute, day-of ticket purchases, though. And really, that's what the park wants, too. The sooner consumers buy their tickets the sooner they are locked into attendance.

Once people know the system in place, I would bet they are going to be more likely to plan their days at the park in advance.

Adding the weather and concerts and closed rides just makes it way too complicated. What if you could only go on a certain Friday, but Chip Skylark was performing there, so your ticket price is going to be increased by $20, but it's calling for rain in the afternoon, but only an hour, so a $5 discount applies, and on the day you get to the park, and Magnum Force is closed, waiting for a part, so you get another $5 off, but the school kids are having a band parade, so they add another $20. It's way too complicated. (Sorry for the run on sentence. It was necessary to make a point.)

Seasonal or weekday/weekend pricing sound fine to me though, because it can be printed on a pamphlet or posted on a website before the season even starts. That helps get more heads in the gate when the park is slow.

Jeff said:
It's more like a movie theater. When I go to the one nearest me, I expect the matinee to be six bucks, whether it's a Tom Hanks show or Faster and Furiouser.

Yeah, but you also expect the prise to rise in the evening.

It's not like a person who usually frequents matinee showings is completely blindsided when they show up for a 9pm showing and the price is higher.

It's about changing expectations. You have to start somewhere.

(I'm kind of reminded of saying the same thing about the changes SF made when the new guys came in - change has to start somewhere...after a while the change becomes normal)

Think about what you're saying though. Everything in the marketing these days is predicated on price. It's on discount soda cans, "two parks for $29.95!", "less than Disney," etc. How do you market that? "Come visit, it'll cost ya something!"

I guess they would market the same way it's done in other industries now. Prices starting from "insert lowest price point here." That's how they can entice the bargain hunters that are mentioned in the article.

I dunno. How does anything with a fluctuating price advertise? Usually more emphasis on the product, I suppose. Like this year's Cedar Point commercial. That's downright perfect for this sort of thing.

I think Carrie's on to the right idea if you insist on using price as your advertising strategy. Maybe even something like this KI commercial where the price is never mentioned, just the potential $15 savings by buying online.

Put something like "Visit Mon-Thurs and save up to $20 off the regular ticket price" - now you're pushing the concept in your advertising too.

Again, it's happening to some degree already at parks like Dorney and Hershey. How do they handle it?

How do the Giants handle people who bought left field seats for $8 a few weeks back and look to find them prices at $25 or $30 or $40 when they decide that they want to go back because those $8 seats were such a good value?

It's not like it's some impossible task.

But it's not happening in the industry. Discounting opportunities are not dynamic pricing. There's still a ceiling. You know that if you show up, there's a maximum price you'll pay, period. The discounting is all pre-meditated and specific, and has no dynamic property at all as it pertains to weather, the economy or gas prices.

I think that if you think that you can easily transition into this realm, you're too connected and out of touch with The People. You give them too much credit. Cooter and Savannah just want to show up in their pickup and ride rolly-coasters for as Wal-Mart everyday low price as possible.

Jeff said:
You know that if you show up, there's a maximum price you'll pay, period.

That would still be true. There'd be a maximum price - the weekend, mid-july, sunny date rate. :)

I'm not saying jump right into the the daily updating of rates like the Giants seats, but I'm saying to go beyond the early season/peak season pricing that some parks do already.

Again...let's just point out that parks are already using fluctuating pricing based on season. Dorney and Hershey based on season. Hell, Holiday world offers different "discounts" based on day of the week and month...sometimes both. It's happening on some level already, man.

Make early season cheaper. Make those slower weekdays cheaper. Make the busy weekends more expensive. Make it consisent even, if you like (every Monday is $30, every Friday is $50, etc).

Discounting opportunities are not dynamic pricing.

No, but they could be advertising slight-of-hand for it and that's exactly what I proposed in my last post (also, see HW pricing). In my imaginary example in my last post, it has nothing to do with the discount. That's just advertising talk for "the price is different on certain days."

Isn't Kings Island just saying, "You'll pay less if you buy online" in their commercial? My example says, "You'll pay less if you come on a weekday." I have removed the confusion and set pricing expectations with the customer without mentioning an actual price.

Now put the two above ideas together in their most basic form. Voila!

What you describe is not what the Giants are doing, and therefore irrelevant. The question from the start is, "Would this work for park pricing?" There is a difference between dynamic pricing and set variations based on discounts and seasonality or whatever.

I think Gonch is headed TOWARD dynamic pricing, he just recognizes that it may take a few steps to get there. Maybe a few more steps than he'd like, but certainly people DO come to accept the inevitable changes in life....eventually.

Good point, Jeff and you're right. But Gator gets the vibe of where I was headed.

Then again, if you read the article, this is basically all the Giants are doing. Prices are set for the entire season already. You can go buy 'dynamically' priced seats for any home game from now through October. All 'dynamically priced' means in this case is that the price might change (for better or worse) in the future within the established range ($8 - $40).

I still don't see why parks couldn't do this. Establish a high/low, post pricing based on a number of predicted factors and roll with the changes as they come along.

It's ok because you sell it as the 'high' being the price to visit and anything less being a 'discount' - people visiting on the peak are paying what they expect and people visiting any other time think they got a deal.

And to kind of go back to something earlier:

If I were going to an amusement park to find the price was too high, I'd turn around and be pissed off...Cooter and Savannah just want to show up in their pickup and ride rolly-coasters for as Wal-Mart everyday low price as possible.

That's kind of the point though, in a way. That when demand is high, people pay or they switch to a non-demand day. Control things on those over-the-top weekends and move some of that craziness to the slower weekdays. There'd still be an established maximum price (like the Giants do), so you know the ceiling. There should be little surprise once the system is in place and even less as more poeple see it. I still insist it'd only be an issue for the first couple of seasons.

As people used the system, they understand it...after a while people would use it to their advantage. Cooter and Savannah are going to learn over time that they can visit the park at low Wal-Mart pricing if they wait until Tuesday...or a rainy day...or better yet, a rainy Tuesday.

Let's take it a few steps further: if admission prices are going to flux why not the cost of parking and...dare I say it?...a Q-bot?

(can open...worms everywhere!)

Jeff said:
The question from the start is, "Would this work for park pricing?" There is a difference between dynamic pricing and set variations based on discounts and seasonality or whatever.

I think the only real difference is when the park establishes the price variations and based on what information. Conceptually this idea is already on its way at the parks.

A park can decide how much detail they want to use in their dynamic pricing structure and how often they will make adjustments. And I would guess that will vary by park based on market/average clientele.

Do I think a park will fluctuate their pricing by the day due to weather and/or ride availability? It's not likely. They don't care much now how those variables impact customer experience.

But being able to turn your pricing structure on a dime should you realize you aren't hitting your attendance numbers in mid-July or even better still you're blasting past your goals for the year... well, that's just awesome.

But the truth is, if you aren't comfortable thinking about this in the way it has been described, then don't. Continue to think about in terms of discounts being offered. The park is just putting more or fewer discounts on the streets when they realize what the general flow of attendance has turned out to be. All this idea does is give them more information to plan accordingly.

Gonch said:
It's ok because you sell it as the 'high' being the price to visit and anything less being a 'discount' - people visiting on the peak are paying what they expect and people visiting any other time think they got a deal.

Exactly. That's likely the best way to handle the marketing. And again, that's pretty much what is being done at Hershey. Their gate price is $52, but we all know you can get in for less if you visit Giant grocery stores and purchase your ticket there for $10 - $15 cheaper...so long as you are willing to attend over a specified period of time.

If they had the software to run analysis on attendance flow based on concerts at the stadium or specific weeks within the summer or local conventions at the Hershey Lodge, don't you think they would offer those discounts at a more detailed level?

Carrie M. said:
I think the only real difference is when the park establishes the price variations and based on what information. Conceptually this idea is already on its way at the parks.

But it's not the same, because there is a different set of social and economic "contracts" if you will in the way you buy tickets. Sports and concerts are generally not walk-up events, and they have a scarcity factor in play given that there are a finite number of seats (which also range in value based on location).

Amusement parks rarely reach capacity and tickets are purchased on-site the day of. That difference causes several conditions that make real-time pricing variation beyond unfriendly to the consumer. It's not a consumer education issue, because the consumer that decided to go to Cedar Point on some Saturday in July doesn't care that it's Canada Day, 80 degrees and sunny, and therefore more expensive.

It's ok because you sell it as the 'high' being the price to visit and anything less being a 'discount' - people visiting on the peak are paying what they expect and people visiting any other time think they got a deal.

The big downside to this is the "new" maximum must naturally be higher than the current price. That's a pretty big negative if that's the price you have to advertise.

And, that circles us around to the big difference between baseball and amusement parks. For the most part, there's one price to pay for an amusement park. But, baseball games already have a dozen prices---and the Giants are playing with (part of) one category. Assigned seating makes it easy to do this experiment without shooting your entire prcing model---you just pick a handful of sections to try it with. Theme parks are more or less stuck with general admission, and that makes things trickier.

Jeff said:

Amusement parks rarely reach capacity and tickets are purchased on-site the day of. That difference causes several conditions that make real-time pricing variation beyond unfriendly to the consumer. It's not a consumer education issue, because the consumer that decided to go to Cedar Point on some Saturday in July doesn't care that it's Canada Day, 80 degrees and sunny, and therefore more expensive.

I'm not convinced that is much of an issue, though. Even if most people wait until the day of to purchase their tickets, which I'm not sure is the case where discounted prices are offered for pre-paid tickets, there are ways to cope with that. The parks could offer you the ability to lock in your price if you buy online by a specific date. If you don't, then you accept the gamble which could very well work in your favor or it might cost you.

I would agree, Brian, that this is trickier for amusement parks, but I don't think it's impossible (not that I think that's what you are saying.) I think this feels weird. But I also think it felt weird when parks stopped offering free admission to customers and started charging for general admission. It felt weird when they did away with general admission and started making everyone POP. It felt weird when they invented a pricing for QBot to make waits shorter.

See what I mean? All pricing structure changes have their growing pains and challenges at first. But they can be worked out and in general, I see things heading in this direction.

Jeff said:
It's not a consumer education issue, because the consumer that decided to go to Cedar Point on some Saturday in July doesn't care that it's Canada Day, 80 degrees and sunny, and therefore more expensive.

Yeah, and I don't care if the Giants are playing the Pirates or the Dodgers, I just want to see a baseball game. But depending on which day I choose to do it, I could be paying $32 more for the same seat.

Seriously though, I just can't get past the parks that already do this on some level. Are people who visit Dorney in May pissed when they come back in July and the price went up? How does Dorney handle it? How do the guests handle it? Why does it work? Why wouldn't it work to micromanage the exact same concept even further to the weekly level or the daily level if it already works on a seasonal level?

Are the people bringing their little bread bags to HW for a discount mad that this time it's only $2 off, but the last time they came it was $7 off?

I still don't understand why it'd be a problem to show up to the park on any given day and be forced to pay full advertised gate price on a Saturday when they visited last week on a Tuesday and it was $15 cheaper. Seems like the same thing that's happening in spots already.

Carrie M. said:
It felt weird when they invented a pricing for QBot to make waits shorter.

Nope. Q-Bot made waits longer for everyone (except for gold). The difference is that the people who rent a Q-Bot can ride more than one ride at a time.

Lord Gonchar said:

Are people who visit Dorney in May pissed when they come back in July and the price went up

Nope. Because it's advertised before hand that the price will be different during the slower season. When you look up the price online or call the park, you will be clearly notified how much the price is during certain days or the year.

I really don't understand why we (meaning some of you all) get so excited about a potential change in the way parks operate. They seem to be doing just fine as is. Why do we need to jump for joy at the notion that the regular price may be increased to $100, and the park would offer discounts for silly, unpredictable variants like the weather or how many employees called off work that day? What's would stop the parks from abusing a complicated pricing system that the average person wouldn't care to understand? Can you imagine the admission price list if Gonch ever got his way with this?

If it rained 2 hours instead of the predicted 1, would the park be permitted to charge your credit card the extra $4.93? If a performer got sick and couldn't perform the last show of the day, would you be entitled to $6.31 cash back? X-inator was down for 3 hours. Should you request a $5.88 refund at the guest service window?

What about Season Passes? If it rained an average or 4 inches per month instead of the predicted 3 inches per month, would you be entitled to a $25 dollar refund?

This is the silliest thing we have ever seriously discussed on CoasterBuzz in a very long time...lol

Edited for a few tweeks.