This chart illustrates the results of Intensity’s custom variable ticket pricing strategy, which was developed for a major league baseball team client with the objectives of increasing revenue and maximizing stadium attendance. Each game in a season has been assigned to one of six optimal pricing tiers based on a forecasting model that accounts for factors such as the team’s opponent, timing, and proximity to other local sporting events. Each tier is also assigned an optimal ticket price based on a combination of forecasted demand and other team objectives.
Intensity drew several key insights for the client:
- Based on stadium capacity and price differences within tiers, reassigning just one game to its optimal tier represents a $200,000 opportunity for the client.
- Demand for different seats within an existing pricing tier can vary widely, in some cases up to $30 per ticket on secondary markets, motivating the recommendation to introduce additional tiers.
- Overall, Intensity’s approach to variable pricing results in millions of dollars of potential additional revenue. Yet, it is important to consider the challenges that professional sports teams face when setting prices, including scrutiny from the media and fans.
Intensity’s quantitative methodology will enable the team to set improved prices for tickets and improve the fan experience of buying tickets. This is one example of how Intensity brings together sophisticated economic modeling, rigorous data analysis, and deep industry expertise to enable sports and entertainment businesses to reach their full potential.