The dust might have settled after millions of people tried to bag themselves coveted Oasis tickets (well, apart from today’s ballot for extra dates), but the debate remains open on dynamic pricing.
With hundreds of official complaints, Which? calling for fans to be refunded and the government pledging to look into the use of dynamic pricing, there are plenty of lessons for marketers, as Colin Gray, managing partner at McCann Central explores.
Pricing as the forgotten P
In my experience, pricing is the most commonly forgotten ‘P’ in the 4P marketing arsenal. While dynamic pricing can obviously be beneficial, this controversy demonstrates it must be implemented ethically and communicated clearly.
Consumers expect fair and transparent pricing practices, with an appropriate explanation for dynamic pricing that aligned to the size of the increase.
When does dynamic pricing become price gouging?
If you were one of the millions in a virtual queue, you know all too well what happened when Ticketmaster deployed dynamic pricing. Ticketmaster said the prices were set by the event organiser, who “has priced these tickets according to their market value”.
As a result of the Oasis controversy, ministers have now said they will include dynamic pricing as part of a consultation into ticket resale websites.
Dynamic pricing is not a new phenomenon. It’s allowed under consumer protection laws and an accepted example is when high demand sees Uber increase prices and summon more drivers into an area, before lowering prices once again.
However, so-called dynamic pricing feels more like price gouging when there’s fixed supply and locked in consumer demand, often from customers who’ve been queuing for hours. From the perspective of ‘demand rationing’, price and queues are the two main methods.
Ticketmaster use both – they use the latter only to then spring the former on the consumer.
Unsurprisingly, those who queued for Oasis tickets and saw prices suddenly rise from £135 to over £350 have been left seething. Fans have also been quick to re-share a 2017 Liam Gallagher tweet calling out Noel over high ticket prices.
350 dollars to go and see rkid in USA what a c*nt when will it all stop as you were LG x
— Liam Gallagher (@liamgallagher) September 29, 2017
(Ed note: Tweet censorship by Marketing Beat)
Transparency is essential.
Consumers expect clear and upfront communication when dynamic pricing is used. An unexpected price hike, after a long queue, is the sort of negative customer experience which can damage a brand’s reputation.
Brand power or a quasi-monopoly?
Concert ticket pricing might be under review, but there are regulatory precedents in comparable situations.
Retailers at airports are sometimes restricted in the amount by which they can increase their prices over high street branches.
Although brands may argue there’s no obligation for people to fly – just like there’s no obligation to see Oasis – if they get greedy and overstep on their mark-up price, they’re deemed to be committing “an excessive misuse of quasi-monopoly power to the detriment of consumer welfare”.
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Following Ticketmaster’s 2010 merger with Live Nation, the group accounts for c80% of big venues’ primary ticketing for concerts. This means that the event space has become a de facto monopoly, leaving consumers with little options for buying their tickets.
Ticketmaster’s perceived monopoly has encouraged the European Commission to investigate the issue, and the Competition and Markets Authority (CMA) is following suit. The CMA says there are “longstanding challenges” in the market for tickets to big events in general with more protections are needed so that fans get a “fair deal.”
Be aware of and comply with relevant regulations regarding pricing practices. Avoid increases that could be seen as excessive. Consider the perceived value from the customer’s perspective.
Just found out Ticketmaster are doing dynamic pricing and even if you get through, the tickets are at least 4 times the price that was advertised. No thanks.
— 〰️ (@SenseiCarl_) August 31, 2024
So, what can we learn from the Oasis controversy?
Quasi-monopolies, price gouging and lengthy queues are all poor customer experiences that harm a brand’s reputation.
While Oasis has told the NME that they “at no time had any awareness that dynamic pricing was going to be used,” Ticketmaster has said that ‘in demand’ ticket prices are agreed in advance with artists and their management.
It will be interesting to see which brand – Ticketmaster or Oasis – is most damaged by the dynamic pricing of Oasis tickets but all brands can learn from this moment. Get the price right, or your consumers could be looking back at you in anger.
