Steve Ross should follow St. Louis Cardinals’ Dynamic Pricing Model to get fans in seats

Let’s face it, the Dolphins have trouble selling tickets to home games.  It’s no secret why either: the team has posted a 10-14 home record since 2010 (going 1-7 in 2010 when I bought season tickets, I might add), and have only been to the playoffs once since 2002. So, it makes no sense to be spending over $100 a ticket for a decent seat to watch a team that isn’t winning especially when there are so many other things to do in South Florida.  This isn’t Cleveland.

The remedy to all the empty seats we’ve seen on TV the past few years is a little creativity.  If ticket exchanges like StubHub and Ticketmaster’s NFL Ticket Exchange are able to price tickets based on demand, why can’t the Dolphins do that with single game tickets? Instead of offering a set price per ticket throughout the season, Steve Ross should implement a “Dynamic Pricing” model like the one used by the St. Louis Cardinals.

Other industries that use a dynamic pricing model include airline tickets, theatre tickets, home prices, and I could go on and on.  The price of a product is determined based on demand.  This is basic economic strategy.

From the Cardinals’ website:

“By utilizing advanced computer programming linked to the team’s ticketing system, the Cardinals adjust ticket prices upward or downward on a daily basis based on changing factors such as team performance, pitching matchups, weather and ticket demand.”

The Cardinals only apply this logic to the sale of single game tickets, and reported that because of it, 77% of games in 2012 had tickets available for $10 or less, and 37% of games in 2012 had tickets available for only $5.  This also means that for more popular games that are in higher demand, the ticket price will go up because people are willing to pay more for that game.

Granted, the Cardinals play 81 home games every year and the Dolphins only play 8.  I’m not asking Ross to sell $5 tickets, but this model provides an option to fill seats at the stadium. Getting people in the seats as a sports business operator is exactly what you want. If no one is sitting in a seat, there is no one to buy parking, beer, hot dogs, merchandise, etc. at the stadium.  So, when it comes down to it, the ticket price really doesn’t matter.

A CNN Money article written earlier this month published the high cost of being a football fan. In the article, they say the NFL league average for 2 people to go to a game is $209.  This does include $82 in ticket prices, but that’s still $63.50 of lost revenue per empty seat in an NFL stadium.

The average attendance per home game last season was 57,379 seats in a stadium that has 75,540 capacity. After doing a little math, that is roughly $1,153,223.50 in lost revenue per home game or over $9.2 million lost in 2012.

This roughly $10 million number doesn’t even include the cost of the reduced ticket prices to get people in the seats.  If you filled those 18,141 seats at an average ticket price of $41 (according to the CNN Money article), that’s an additional $743,781.

I recognize that I’ve just performed very static math, and if the team is really bad and has no chance at the playoffs it’s hard to even give tickets away, but we live in 2013. The Cardinals say “advanced computer programming” to make it sound smart and complex, but this type of algorithm can be built and enhanced over time very easily with the right resources.

How many of you remember the 2007 season when the Dolphins were 1-15? Scalpers were selling tickets for a $1 to get rid of them or even giving them away at kickoff. But those fans were spending a lot more than that in the stadium… an average of $63.50.

So, ask yourself, Mr. Ross: how much money are you losing by not implementing this policy for the Dolphins at Sun Life Stadium? And this is just the money side of the equation.  The residual effect of having a dynamic pricing model means the Dolphins may actually have something that resembles a home field advantage.

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