Q&A with North Carolina’s Senior Associate Athletic Director, Rick Steinbacher, Penn State’s Associate Athletic Director, Jeff Garner and IMG Learfield’s Data Analytics Manager, Ashik Idrisy
Recently IMG Learfield completed two comprehensive football pricing studies for partners Penn State University and the University of North Carolina. In both cases, these schools wanted to take an in-depth look at their pricing structure for all inventory items and make sure they were maximizing revenue opportunities while also creating a pricing structure that would allow them to maximize attendance.
IMG Learfield’s Data Analytics Manager, Ashik Idrisy, led the process for each school and made specific pricing recommendations driven by data insights. Specifically, the following areas were reviewed in depth to formulate the recommendation…
- Past sell through rate and ticket utilization – determining the intrinsic value of a seat at your venue
- Secondary market value – mapping the intrinsic value for the seats to an actual ticket price
- Propensity and capacity to buy based on discretionary income – assessing the risks associate with a new pricing recommendation
- Comparison against peer athletic departments and professional sports teams – creating a baseline for which to measure a new pricing recommendation
Below is specific feedback on the process and benefits and for more information on completing a pricing study for any of your ticketed sports please contact Tyler Reichwein at (352) 223-9361 or Tyler.Reichwein@imglearfield.com
IMGL: What was the primary objective going into the pricing study?
Steinbacher: Our objectives included using sales and attendance history along with secondary ticket market pricing information to provide data based insights to enable us to make more informed pricing decisions in Kenan Stadium and the Dean Smith Center.
Garner: Our primary objective was simply to optimize each piece of inventory related to market price and demand. How could we best utilize each seat available to us and maximize the revenue associated with each seat and the stadium as a whole?
IMGL: How do you feel the results that were presented to you and your team compared to your initial thoughts going into the pricing study?
Garner: Ultimately, we had a pretty good grasp of our price levels and their market value. Our average ticket price was actually within a dollar of the average secondary ticket market value. However, the pricing study allowed us to take a more specific strategic approach and maximize each seat and each price level not to mention it helped to confirm some previous strategies.
IMGL: Describe the overall process (i.e. calls with the schools, follow ups, presentations etc.) for partners and our General Managers.
Idrisy: The pricing study starts with a project kick-off call to discuss the context for what’s motivating the pricing study. Following that call, I create a project summary document which details the data points necessary to meet the project goals, and give a breakdown of the project timeline to administration to confirm everything we discussed but also when we can expect the results. Once the data is delivered I go through the process of cleaning and appending the data as needed and then move onto the analysis.
Finally, I create a slide deck and present the findings of the pricing study to administrators at the school and provide ample time for Q&A to better understand our findings and where we go from there to begin to implement.
IMGL: What was the most surprising about the results or stood out the most?
Garner: While we found that our pricing was very close to market value, we noted that our mix of inventory categories was a bit off. How we allocated available inventory for Season Tickets, Groups and Single Game Tickets needed to be redefined which the pricing study allowed us to better understand.
Steinbacher: Going into this process with Ashik we had a pretty good idea how much our individual tickets for going for on the secondary market, but what was really eyeopening was how much our best season ticket seat locations were selling.We had never really analyzed what those seats were selling for.
IMGL: How closely did the recommendations of the pricing study align with your final pricing strategy?
Garner: We tend to let the data be our guide so as it related to the pricing study and our final strategy they were almost identical. However, even with a strong data and analytics program, there is still value in listening to everyone’s “gut” on the market and our fans so we did make some alterations to the final strategy. There is room for both factors to be considered especially if the “gut” feeling is rooted in experience.
IMGL: What made you trust the process presented in the pricing study?
Garner: We worked very closely together on the process which gave me full confidence in the data and indicators that we used. Ultimately, continuing to move in this direction does take the ability to trust the numbers. While we are very committed to this strategy, some may choose to bite off smaller studies to test their methodology and results, it has taken us a few years to get here but I am more than excited that we are using our data to help confirm our strategic and tactical plans.
IMGL: How often should college administrators be looking at their pricing?
Idrisy: It makes sense to look at pricing once a year over year, following a process similar to but not necessarily as in-depth as what’s offered in the pricing study. That sort of deep-dive should be done at least every 3 years or sooner if there is major change within the program such as a change to a venue.
IMGL: What would be some advice for other administrators that thinking of looking into their pricing for football and/or basketball?
Steinbacher: The IMG Learfield process of demand scoring every section and comparing the prices paid in each section on the secondary ticket market to our initial ticket pricing was very insightful and will cause you to think about your pricing models differently.
Garner: I would suggest that we, as an industry, continue to look at pricing with an on-going eye. Our markets are always changing and what may make sense this week, or month, or season may not be the best approach for the future. Simply blindly pricing inventory the same as the year before or having small increases may actually be costing you money as an operator. Also, while we are fighting to maximize revenue and sales mix, our fans have a lot to tell us about the true value of our product. Listening to how our fans are interacting with us is mutually beneficial, not only maximizing ticket revenue but also minimizing perishable inventory risk.