Event Data Measurement and ROI
Early Bird Pricing Strategy: The Logic and Science Behind Scarcity and Value
14 Aug 2018 | RainFocus | 4 minutes
You would be hard-pressed to find a conference that doesn’t offer an early bird pricing strategy. This tried and true approach of offering discounted rates for registering earlier rather than later is a boon to strategic planning for any registration manager or event director, as well as a perk for engaged and excited attendees.
But why is it tried and true?
What about discounts actually translates into spurred action by potential registrants?
As you’d expect the answer begins with the financial benefit but ends at core human psychological processes.
Behind the Numbers
In 2012, Coupons.com and Dr. Paul J. Zak, Professor of Neuroeconomics at Claremont Graduate University, conducted a research study to find the physiological and psychological impact coupons have on the human body. The results were incredible: discounting lead to large (and measurable) reductions in physical stress levels and increases in levels of Oxytocin, a hormone responsible for happiness and pleasure levels.
The human body, of course, is pre-dispositioned to look for any path that avoids pain and gains pleasure. The Coupons.com study shows that cost reduction resulted in a pleasurable experience. Offer an early bird rate to conference attendees and that same feeling will be invoked and desired.
But Wait! The First 10 Callers Will Receive a Bonus….
You’ve likely heard the phrase ‘people want what they can’t have’. This clever one-liner is not just relatable but a perfect analogy to the concept of scarcity. For human beings, the availability of something can often be inversely proportional to their desire to obtain it. Scarcity takes a variety of forms: supply limits, overwhelming demand, or, for purposes of this article, duration limitations.
No conference attendee would refuse a discounted registration cost (especially those late to last-minute registrants). Applying a deadline on the availability of that discounted attendance package creates that sense of scarcity. Now attendees must act faster to obtain what it is they desire before it is no longer available.
Optimizing Conference Registration Costs
Early bird pricing strategies are fantastic for attendees who register in time to take advantage of the discounts. It’s not so great for those who don’t–and this result is entirely by design.
To offset the sting of missing a pleasurable discount, many conferences have adopted a strategic registration timeline that offers multiple discount deadlines. If a registrant didn’t take advantage of the first round of Early Bird discounting, they would still have a chance at a discount, albeit a less pleasurable one. Based on data from a number of RainFocus clients, we can start to form a blueprint for the best practices that a conference can abide by to create the most effective early bird pricing strategy.
The Blueprint for Early Bird Pricing Strategy
1. Launch special (limited number): An insufficient number of registration packages at an extremely discounted rate. Offer it as a perk to repeat attendees or just the public at large. Just be sure availability is based on a strict and visible supply limitation.
2. Early bird (deadline): A registration package offering a discount, generally available the moment registration opens (or after a launch special is sold out) until a specific expiration date. These discounts will often range between 10-20% off the standard pricing and offer registrants significant savings. End dates for early bird rates vary from conference to conference but commonly end between 10-15 weeks (2-3.5 months) before the time of the event.
3. Pre-show (standard): The standard conference attendance rate offered before the event begins. Despite the pleasure of a discount and the scarcity of an early bird offer, the majority of conference registrations will most likely happen in this phase.
4. On-site (premium): For registrants who are truly last minute, many conferences offer on-site registration options at a substantial premium. On-site registration packages often carry an increased cost of 15-20% over the standard pricing but provide two unique benefits: first, they encourage earlier registration by showing the sharp premium that accompanies the late sign-up. Second, because the cost is often significantly higher, that higher number acts as a new ‘benchmark’ for what attendees should expect a full price package to look like. In turn, anything less expensive feels like the obvious, more favorable choice (even if that choice is your standard pricing that is indeed representative of the full conference package price).
Software to Power Registrations and Beyond
An early bird pricing structure helps your most engaged attendees find immediate value from the moment of registration. But that is just the first of many data points to discover about each attendee. What other aspects of your conference are driving real value for them?
RainFocus is a paradigm shift in Event Management Software. Going beyond comprehensive registration, exhibitor and speaker management software, RainFocus enables event teams to discover rich insight around the actual value attendees gain from your conference.