Dynamic pricing pays off for San Francisco Giants tickets

The final weekend of the Major League Baseball season turned out to be more stressful than expected for San Francisco Giants players and their fans. But the unexpected suspense made it a perfect and quite profitable one for Giants ownership.

The Giants employ a dynamic ticket pricing system in which the price of tickets at AT&T Park fluctuates depending on demand. With the system, the team's bottom line got an impressive boost when the Giants—which needed to win only one game against the San Diego Padres to eliminate the Padres and win the NL West—lost the first two games of the series to set up a high-stakes finale (that wouldn’t have actually been a finale if the Padres won, but more on that in a moment) Sunday, October 3.

The Giants stopped their mini-skid in the nick of time by blanking the Padres, 3-0, to win the division and advance to the playoffs for the first time since 2003. The Giants’ clincher came in front of a sellout crowd of 42,822—the third SRO crowd of the weekend at the 41,915-seat facility. The Giants drew 42,409 to the opener Friday and 42,653 Saturday. The sellouts were the first for the Giants since they played to capacity crowds for each of the three games against those same Padres August 13-15—a span of 21 home dates.

Not bad for a series of games for which the Giants originally expected decent but by no means overwhelming crowds. Director of ticket sales Russ Stanley told Bloomberg News last week the Giants figured they would draw between 30,000 and 35,000 per game. Presumably, leading the NL West for the final week of the season also boosted interest in the Giants’ penultimate home series against the Arizona Diamondbacks: The Giants swept three games in front of an average crowd of 37,646.

The additional demand for the Padres series meant those who walked up to the gate over the weekend—or bought tickets on the resell market—certainly paid more than they would have in April, back when neither the Giants nor Padres were expected to contend and the cheapest seat to the October 1 game was a mere $5. By the middle of last week, that cheap seat reportedly was up to $20.

Bloomberg reported that a seat in the Field Club behind home plate was $68 at the beginning of the season but $175 by last week. At StubHub, meanwhile, the cheapest ticket Sunday to the afternoon’s game was $69.

The final weekend wasn’t the only time dynamic pricing paid off for the Giants. Stanley told Bloomberg the Giants’ revenue per seat increased by between 7 percent and 8 percent this season.

The Giants’ division championship gives them the home field advantage against the Atlanta Braves in the best-of-five NL Division Series beginning Thursday, October 7 and at least two more chances to maximize ticket revenue. That sure beats the alternative: Had the Giants lost Sunday, they would have been part of a historic three-team playoff for two spots with the Padres and Braves but would not have hosted either the NL West playoff against the Padres today, October 4, or, if they lost that game, the NL wild card playoff game against the Braves Tuesday, October 5.

Source: TicketNews: By Jerry Beach

Tickets.com Client Spotlight: San Francisco Giants

Giants plan aggressive dynamic-pricing effort

Published December 01, 2008
Sports Business Journal
By DON MURET
Staff writer

The San Francisco Giants have signed a deal with a software company that enables them to change single-game ticket prices at any time.

The club hired QCue to help find the right price for selling 2,000 seats in AT&T Park’s outfield bleachers and upper deck, the last ones to sell for Giants games, said Russ Stanley, managing vice president of ticket services and client relations. Stanley declined to disclose the financial terms, and as of last week the two parties were still negotiating the length of the contract.

QCue, a one-year-old firm based in Austin, Texas, connects its system with Tickets.com, the Giants’ ticket agent. QCue joins Stratbridge, Eloqua and other data managers that teams use to crunch sales numbers to determine the right price to sell those tickets in low demand.

QCue’s formula, similar to Stratbridge’s, plugs in factors such as team performance, opponent, starting pitchers, weather conditions, day of the week and gate giveaways. The Giants will use those results to raise or lower ticket prices as late as the morning of a game for tickets purchased online, at ticket kiosks, by phone and at the box office, Stanley said.

The plan early on is to adjust prices once a day for every home game. “We have the potential to change every price in those [seven] sections every day,” Stanley said. “We could go up or down. There may be a day we do multiple changes and we have that ability.”

The price change will most likely be 25 cents to $1. The Giants believe even a decrease that small will make a difference as they attempt to move slow-selling seats without alienating season-ticket holders who pay full price for their seats, Stanley said.

There are other clubs reducing ticket prices on game days to fill seats, said Matt Marolda, founder of Stratbridge. Marolda, whose company has deals with 40 teams and leaguewide contracts with the NBA and NHL, declined to identify specific clubs.

Stratbridge was among the first to develop computer programs to help pro teams implement dynamic-pricing strategies before and during the regular season. “No teams are as aggressive as the Giants,” Marolda acknowledged.

The Colorado Rockies, whom the Giants talked to before doing their deal with QCue, use a less analytical form of dynamic pricing to fill Coors Field’s 50,449 seats.

The team does not feed boutique software into its Paciolan system (soon to be known as Ticketmaster Irvine) but does rely on historical data and team performance before setting prices for single-game tickets, said Greg Feasel, the Rockies’ senior vice president of business operations.

“We have so many people who live and work downtown that wait longer to make a decision,” Feasel said. “A lot depends on the weather.”

Depending on day-of-game demand, the team lowers its price by about $1 for seats in the upper deck and $4 to $6 for other seats when the Rockpile, the popular family section above the batter’s eye in center field, sells out.

Kids younger than 12 and adults older than 55 can buy tickets for $1 in the 2,300-seat Rockpile and others pay $4 to sit there. “We don’t want to lose those fans waiting in line if they can’t get those tickets,” Feasel said.

In San Francisco, QCue tested its software without selling tickets at the end of the 2008 season, and identified a three-game series in early September against the Diamondbacks for which the team could have decreased prices slightly to move tickets.

“It gave us a good feel for how this would work,” Stanley said.

The Giants were out of the divisional playoff race and “there wasn’t a whole lot of demand” for those games, said QCue CEO Barry Kahn.