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What Corporate American Can Learn From The Piano Man

September 15, 2014

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Excuse me sir, are you here by yourself?

Yeah.

Big fan?

Sure. I love Billy Joel’s music.

You must be if you’re willing to sit in these seats. Would you be willing to exchange your ticket here in the nosebleed section for one on the front row?

Excuse me?

Yes, that conversation really happened. No, it didn’t happen to me. My wife and I were sitting a few rows in front of the guy. We were in the rafters of Seattle’s Key Arena. Billy Joel was touring, but didn’t have a new album out. We were just fans who wanted to come hear his old stuff. None of us were sure if the ticket offer was a scam or not. The man making the offer had a name badge, but he also had a scraggly goatee and multiple piercings.

The tech show promoter had a problem. Not enough people where signing up to attend his show in Sydney Australia. He had plenty of presenters, but the economy was down and he just wasn’t getting the number of attendees he needed.

He had a couple of options:

First he could lower the ticket prices. It’s always easier to raise your prices than lower them. If you raise prices on a service or product, your existing customers feel like they got a good deal and they feel smarter for getting in early. In addition, potential customers who are “on the fence” are more likely to buy. After all, the price might be higher next week. Better buy now.

When you lower your prices you have the opposite problem. First, your existing customers feel slightly cheated. After all, they paid more than the people buying right now. They might even come looking for a refund. And worse, the fence sitters might decide to wait even longer. After all, the prices came down once, maybe they’ll be lower next week.

So, lowering his prices was not something the promoter wanted to do.

Second, he could cancel the show. This really comes down to a cost/benefit analysis. He’d already paid out a bunch of money that he wasn’t going to get back. Would it be cheaper to cancel and lose all his deposits, or risk a half full show and only lose some of his money?

Also, his show was sponsored by his company. If you cancel a show, it makes people worry about the financial state of your company. Perhaps they were mistaken to invest in your products after all?

The promoter opted for a third strategy. He went to his management and told them they should give the show away for free. It would mean $50,000 in lost ticket sales. At first glance this strategy seems to fly in the face of the “don’t lower your prices” argument. It’s hard to get much lower than free.

The thing is, the promoter didn’t tell anyone he was giving the show away for free. To complete his deception he needed an accomplice. He went to one of his biggest sponsors.

I have a proposition for you.

We’re listening.

I’m going to give away free attendance to my show in Sydney.

Okay.

But, I don’t want people to think it’s a free show, or they will decide it’s not valuable.

Why tell us about this?

I want to announce that your company has offered to sponsor the show. That thanks to your generosity, all attendees will have their entrance fees paid by your company.

But it won’t cost us any extra?

Nope. You get tons of free publicity and goodwill, and I get a well attended show.

The show was “sold out.” Once people heard that the attendee fees were being sponsored, they rushed to sign up. It was first come first served. (Actually, it was open to as many people as wanted to attend, but the perception of limited number of tickets helped drive attendance.)

The show was an overwhelming success. The corporate “sponsor” was thrilled with the exposure they got. The promoter’s parent company lost out on some attendee revenue, but more than made up for it in product sales and positive perceptions.

What’s this story have to do with Billy Joel?

The offer was on the level. They guy exchanged his ticket with the man with the goatee and the piercings. A few minutes later we saw him sitting on the very front row. Even from 100 yards away his beaming smile was visible. And then I realized the brilliance of Billy Joel’s strategy.

His concerts at that time had the exact same price for every seat in the arena: first row, last row, both paid exactly the same price. So, if you were willing to pay full price and sit in the rafters, it meant you were a dedicated fan. If Joel could get those fans onto the front rows, he would be playing to his most devoted and passionate fans.

Most concerts have a tiered ticket price where the closer you are to the stage the higher the price. That means the people sitting closest are the most wealthy, not necessarily the most passionate. Joel, didn’t offer the first three rows for sale. Instead, he packed them with fans who would have been willing to sit in another county and listen.

He lost out on some money that he might have gotten from higher priced tickets, but on the plus side, he gets passionate fans at the stage edge. The fans in turn get the chance of a lifetime. It’s a positive experience all the way around.

I just wish the guy with the goatee had made the offer to my wife and me.

Rodney M Bliss is an author, columnist and IT Consultant. His blog updates every weekday at 7:00 AM Mountain Time. He lives in Pleasant Grove, UT with his lovely wife, thirteen children and one grandchild.

Follow him on
Twitter (@rodneymbliss)
Facebook (www.facebook.com/rbliss)
LinkedIn (www.LinkedIn.com/in/rbliss)
or email him at rbliss at msn dot com

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