Digonex, a dynamic pricing solutions provider for the attractions and live entertainment industries, has continued to prosper in a post-COVID environment.
This success is mostly accredited to attractions and tour operators utilising its pricing services, but the Indianapolis-headquartered company has also seen a resurgence in its live entertainment and performing arts portfolio.
Originally founded in 2000, Digonex adopted a new strategy and focus in 2014 after it was acquired by media conglomerate, Emmis Corporation.
“Our company has been growing steadily and rapidly with revenues roughly doubling in each of the past few years,” said Greg Loewen, chief executive of Digonex (pictured). “Since COVID, our growth has been driven heavily by increasing the number of attractions and tour operators utilising our pricing services but over the course of 2022 we’ve also seen a resurgence in our live entertainment and performing arts portfolio.
“Our success has been built on a reputation for great results and equally strong client service. Some of our long-term North American clients include the Chicago Symphony, the Dallas Symphony, The Shed in New York, California Academy of Sciences, Florida Aquarium, Houston Zoo, and The Children’s Museum of Indianapolis – the largest children’s museum in the world.”
Accelerating growth
Despite the significant growth in the US, Digonex has also focused on its position in the UK.
Loewen added: “We are currently focused on accelerating our growth in the UK. Royal Albert Hall is a long-time client and over the past year we’ve also signed agreements with the Wales Millennium Centre, Somerset House and the Barbican Centre.”
Dynamic pricing can often be vilified when not implemented in the most sensitive way, and this can create challenges for organisers, attractions and venues that wish to utilise the system. Opposition can be overcome if organisers follow best practice, however.
“The challenges generally relate to two concerns: first, the required resource investment; and second, the perceived risk of alienating patrons/customers with frequently changing prices,” said Loewen.
“The reality, however, is that most clients are delighted by their return-on-investment in dynamic pricing and, if implemented in the right way, dynamic pricing is of benefit to both our clients and their customers. The keys to consumer adoption are transparency (clearly communicating the available price options to the consumer), fairness (being able to explain in simple terms how prices may move over time) and choice (providing the consumer with a wide array of price options).”
Loewen also explained that Digonex’s process typically embraces these principles, but they are not always present in all areas where dynamic pricing is applied, for example purchasing an airline ticket.
He also noted that organisations within the performing arts sector seemed to have moved past these concerns and were already practicing dynamic pricing, prior to approaching Digonex. Organisations just required a partner that could automate the process and generate stronger results through data and econometric algorithms.
“In the attractions sector, the practice of dynamic pricing is newer but we’re seeing adoption in the North American market spread rapidly and seeing increased interest in the UK, Europe, Middle East and Asian markets,” said Loewen.
Dynamic pricing can have a transformative impact on revenues according to Loewen, who also noted that there can be an immediate lift of between 5% and 20%.
“At the same time, dynamic pricing can also enhance community accessibility/affordability,” he said. “Dynamic pricing isn’t exclusively about increasing prices; often the optimal price is a lower price. For our performing arts clients, we can design our solutions to pivot from maximising revenue to optimising capacity utilisation on a performance-by-performance basis.
“For our attractions clients, dynamic pricing can help to shift attendance from peak to off-peak periods which helps to improve guest satisfaction. Dynamic pricing can also motivate guests to buy their tickets further in advance which helps with operational and staff planning. In addition, because we’re gathering data and monitoring consumer responses to price changes every day, our solutions can help clients identify changes in the market sooner and respond accordingly.”
Dynamic pricing as a tool
When it comes to dynamic pricing, venues, theatres and organisations may be concerned over the response from their audience.
“When viewed from a distance the assumption seems to be that dynamic pricing may be good for the business practicing it but misaligned with their customers’ interests. In our experience, that is an unfair characterisation,” said Loewen.
“Dynamic pricing is just a tool and the impact all depends on how a given business decides to use it. We work with our clients in designing each of our implementations to clarify their goals – which are usually much broader than just simple revenue maximisation – and build customised constraints and rules right into our code to ensure our price recommendations are aligned with their chosen strategy and philosophy. As discussed earlier, we also take care to implement dynamic pricing in a way that gives back to the consumer greater choice and control over how much they pay, when they buy their ticket and when they attend an event. As a result of this approach, we’ve never had a client that has experienced any widespread pushback or resistance following the implementation of dynamic pricing.”
He added: “Our clients create wonderful experiences for their patrons/customers and it’s appropriate that they capture the full value of their hard work and investment so that they can re-invest back into their product. But it’s understood that in entertainment if you don’t take care of your customers and provide them with a great experience at a fair price they won’t remain your customers for very long. A well-designed pricing strategy needs to reflect that.”
Loewen believes that when implemented in the correct way, dynamic pricing can be a win for both the business and the customer.
Digonex is a new partner of TheTicketingBusiness Forum 2023, which is set to take place at Emirates Old Trafford in Manchester, April 19-20. Register your interest in attending here.