Comment: Clippers Explain Dynamic Pricing

The Clippers’ video description of their dynamic and variable pricing policies seems to be creating a bit of buzz . We agree with other folks that this video is a pretty good description of these pricing techniques.  As an educational tool the video is very effective.

We do have a couple of general observations.  First, taking the straight-forward approach of discussing how market factors lead to increased or decreased demand for certain games is a smart technique.  One of the potential problems of these new pricing systems is simply that they represent a change.  Consumers tend to compare any current offering to some personal or historical reference.  When the current offering is complicated, consumers are very likely to have a negative reaction.

The other thing that the Clippers do well is that they frame the policies in terms of the discounts provided to season ticket holders.  In other words, rather than emphasize the high cost of coveted single games tickets, the focus is placed on the available discounts.  In contrast, think back to the summer when Michigan’s pricing plan quickly became a story of $500 tickets for the ND game.   This is doubly smart since the discounts are linked to season ticket holder status.  In this way, the Clippers are able to provide a “benefit” to their most valuable customers.