Event Planning - Event Monetization (Part IV)

Identify your most valuable customers

While hosting events and engaging with attendees, make sure to pinpoint individuals who are ready and able to make purchases. It is crucial for every business to recognize their top 5% or 10% of customers and nurture those connections. These are individuals who deeply appreciate your business offerings, turn into loyal patrons, and have the potential to spend significantly more than others.

Build a more solid connection with these important clients by providing exceptional treatment and offering exclusive premium products or services tailored to their needs. While being considerate to everyone, focus on catering to their preferences. These key clients are likely to show interest in premium events such as multi-day retreats or conferences, unlike those who attend casually. Remember to treat everyone kindly while also identifying potential high-value customers.

How to price your events if you charge for attendance

Even though there are numerous ways to make money from free events, you might choose to implement an entrance fee for your event.

The optimal price is not always the highest fee. It is the price at which:

1. You generate enough attendance to maximize revenue.

2. The cost of putting on a bigger event does not offset the profits.

3. Long-term growth is not compromised for short-term gains.

For example, if a ticket is priced at $100 and there is only one participant, the profit would amount to $100 after covering the event expenses. Conversely, with a ticket priced at $5 and 50 participants, the total revenue generated would be $250. Nevertheless, hosting an event for 50 individuals could lead to increased expenses. If the event costs stay below $150, the $5 ticket price demonstrates greater short-term profitability. Understanding the enduring customer value across different pricing tiers is crucial, requiring ongoing data tracking and experimentation.

Setting the perfect event price can be challenging initially, requiring some trial and error. Starting with a lower price and adjusting it as demand grows is a recommended approach. By gradually increasing the price, you can gauge attendance levels at different price points, eventually pinpointing the optimal price that maximizes revenue. Additionally, offering a lower price can serve as a marketing strategy, as you can promote future events as being more expensive, encouraging customers to act quickly to benefit from the current discounted rates. People are psychologically inclined to seek good deals and are more likely to participate if they perceive a favorable cost-benefit ratio.

Scarcity is a common marketing strategy that is frequently utilized. This approach can be observed in almost every TV commercial break, particularly in car ads that incorporate phrases like "while supplies last" or "sale ends on xyz date," aiming to evoke a sense of scarcity and prompt consumers to make a quick purchase. Event marketing also frequently employs scarcity tactics by indicating limited attendance or announcing that ticket prices will increase as the event date approaches.

By starting to charge higher prices, you can attract people to participate by providing discounts. Discount tactics usually surprise individuals with a high price initially, then present a lower price. Following the initial shock of the higher price, the lower price appears more appealing, even though it was the actual price from the start.

For instance, if the event is scheduled for a month from now, you could provide a 50% discount to those purchasing tickets in advance, a 25% discount to those buying a week ahead, and a 10% discount to those purchasing three days prior. This strategy will prompt individuals to take advantage of the largest discounts available while they last. Additionally, by making your guest list public, it creates the perception of high demand, with many individuals registering a month early. This appearance of popularity can facilitate persuading other prospective attendees to RSVP at higher rates as the event date approaches.

Raising prices can be beneficial when your events begin to sell out. Although increasing prices might result in lower attendance, it can draw a more discerning clientele. As a result, these patrons are more likely to make extra purchases, participate in upcoming events, and interact more meaningfully with fellow attendees who have similar interests.

While attracting high-end clients is desirable due to their higher spending capacity, achieving success by making events affordable is equally possible. For instance, a discount retailer such as Walmart, which provides low prices for all customers, can be more profitable than a luxury niche brand. Opting for a strategy where numerous attendees pay lower fees and securing a larger event space could prove to be more financially rewarding than catering to a smaller group of high-end clients with higher pricing.

Either the premium or affordable model can work. The key is to make your events popular and engaging. Plus, since there are many types of different events, you will still have to experiment to find what works best for your unique situation. Also, talk to your event attendees and get their thoughts on the pricing, how useful the event is to them, and how they think you could improve your events. You do not necessarily have to take their advice, especially since some advice will be contradictory, but you can think about it and use it to inform your future decisions.

Starting your first business can bring about feelings of uncertainty when it comes to charging for events. Many first-time entrepreneurs experience a fear of setting prices, which was also the case for me when I began. Requesting payment from others may feel uncomfortable, especially if we are naturally shy. Remember, your time and effort deserve fair compensation. Don't hesitate to ask for what you deserve. Moreover, if attendees sense your lack of confidence in your pricing, they may question the value of the events. If even the event organizer is unsure about the pricing, attendees are unlikely to feel confident about it either.

Do your best to take the leap and charge at least a small fee when it becomes appropriate. But if you are really apprehensive about charging, you can keep the events free a little longer until you are certain that people are getting great value. That knowledge will make you more confident about charging. It is a bit of a game of trial and error. It is OK to try something even if it ends up being a mistake. Even if your initial strategy or price does not yield the kind of results you want, you can learn from it and always try again.

Keep in mind that any monetization strategy works better if you have more people attending. No monetization strategy is effective if you have zero attendees. In the next blog, we will cover event marketing to make sure that your events are always filled to capacity and hopefully grow beyond even your expectations.

Genadinik, Alex, Event (2014) Planning: Management & Marketing For Successful Events, Kindle, ISBN: 1519178204, 

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