Dynamic pricing seems like a perfect solution for businesses that want to maximise profits. The system allows prices to adjust based on factors like time, location, and customer demand. Companies can charge more when people are willing to pay, and less when demand is low. But as simple as it sounds, dynamic pricing doesn’t come without its challenges, especially when it comes to customer trust and satisfaction. Just look at what’s happening in Ireland with the recent dynamic pricing of Oasis concert tickets.

 

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 A proposal to ban dynamic pricing for concert tickets is gaining momentum, following outrage from Oasis fans after prices for their Dublin show jumped from €176 to over €400 on Ticketmaster. The company claims the prices reflect market value, but fans, understandably, aren’t happy. Irish lawmakers, echoing these concerns, are pushing for transparency and fairness in pricing. This push comes on the heels of a 2021 law banning the resale of tickets above face value.

 

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Dynamic pricing has found its place in industries from airlines to hotels to entertainment. While it sounds good in theory, the practice can quickly alienate customers if they feel they’re being taken advantage of. The entertainment industry in Ireland is facing just that – a battle between profitability and customer loyalty.

 

Common Mistakes to Know from Concert Tickets Dynamic Pricing

 

One of the biggest mistakes businesses make with dynamic pricing is assuming that customers will accept any price increase. The reality? They don’t. When prices suddenly spike, especially in industries like entertainment, the backlash can be intense. Fans feel betrayed when they see prices skyrocketing before their eyes, and businesses often fail to anticipate just how emotionally invested customers are in these purchases.

 

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Another mistake is believing that dynamic pricing only affects high-demand periods. It can backfire even during low-demand times. If customers see fluctuating prices too often, they might start to wait for prices to drop, essentially training themselves to avoid purchasing when prices are higher. This erodes the value of dynamic pricing altogether, leaving businesses with customers who are only willing to buy at the lowest possible price.

 

There’s also the issue of fairness. Customers don’t like feeling that they’re paying more than others for the same product, and dynamic pricing often creates these disparities. When one person pays €400 for a ticket while another gets it for €176, it breeds resentment and fuels complaints. In some cases, it’s not just about the price – it’s about the perceived fairness in how that price was reached.

 

 

Rethinking Dynamic Pricing as Exemplified in Concert Tickets

 

So, what can businesses do? It’s time to rethink how dynamic pricing is applied. Instead of focusing solely on squeezing as much profit as possible during high-demand periods, companies should consider how this affects customer relationships in the long term. Sure, dynamic pricing can boost revenue, but at what cost?

 

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One approach is to focus on transparency.

 

Customers understand that prices fluctuate, but they don’t appreciate feeling tricked. Offering more insight into why prices are changing can build trust and reduce frustration. Ticketmaster’s defence that their prices “reflect market value” doesn’t resonate with fans who feel blindsided by dramatic jumps in cost. A clear explanation of how demand affects pricing, paired with caps or limits on price increases, could help strike a balance between profitability and fairness.

 

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Another solution is to avoid relying too heavily on dynamic pricing. It shouldn’t be the only tool in the pricing strategy toolkit. Blending dynamic pricing with value-based pricing can offer a more balanced approach, where customers feel they are paying for quality, not just fluctuating demand.

 

Want to make sure your dynamic pricing strategy builds customer trust instead of driving them away? If you’re looking to refine your approach and ensure your pricing strategy works for both your business and your customers, let’s talk. Reach out to explore how you can keep your pricing fair, transparent, and effective.

 

For a comprehensive view of integrating a high-performing pricing team in your company, Download a complimentary whitepaper on How to Avoid Pricing Chaos.

 

Are you a business in need of help aligning your pricing strategy, people and operations to deliver an immediate impact on profit?

If so, please call (+61) 2 9000 1115.

You can also email us at team@taylorwells.com.au if you have any further questions.

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