By Jim McCarthy Jul 30, 2010 0 comments

How Gates Helped Us Build a Multi-Million Dollar Ticket Selling Business, Part 2

Earlier this week, I talked about the first three “gates” that Goldstar has used over the years to build a business that currently serves more than a million people and thousands of venues, sending scads and scads of people to live events each year that otherwise might not have gone.  Before I move on to Gates 4 through 6, Gates 1, 2 and 3 are reminding people they’d like to go out more than they do (which is true for most), getting them to be aware of events they might have an interest in, and then developing that interest.

But just being interested isn’t enough.  If it were, every 15 year old boy in the world would own a Ferrari Testarossa.  Gate 4 is overcoming the psychosocial obstacles to going to an event. Here’s an example:  most people over the age of about 30 would sooner poke themselves in the arm with a fork for a couple hours than stand in a line outside a music club on Hollywood Boulevard at midnight on a Saturday in hopes of getting in.  They may KNOW there’s a band playing there and they may be INTERESTED in the music, but without some major intervention, there just never going to make it to the show because it doesn’t (yet) fit with their mental model about how they want to spend their time.  Likewise, some people would sooner clean out their garage than get fancied up and sit in an opera house.  We did some research a few years ago that suggested people do hesitate to go to different kinds of venues for purely psychosocial reasons.  One of the benefits of having user reviews on the Goldstar site is that people who might have a bit of unease can see that others have gone before them and had a good time.  We also give people the ability to create ‘tips’ for other users about parking, dining, how to dress and other things that we know for sure create just that little bit of inertia that keeps them at home.  These are very real barriers that we take pretty seriously.

At this point, we’re getting close, but then there’s that pesky thing known as reality.  Gate 5 is the logistics of getting out.  Time, location, duration, parking, availability,etc., are reasons enough not to go to a show that a person knows about, is interested in, and is comfortable with.  It turns out that despite all those factors, if a venue makes it impossible to park or if the show starts too late (or too early) or if a potential customer needs but can’t find a babysitter, she has the nerve not to come.  I know!  It’s outrageous, isn’t it?  Most organizations make at least a token effort in this area , and at Goldstar, we’re doing our best to back you up all the way.  My advice (to myself and everybody else, I suppose) is that there are probably even more ways this could be made easier for people that we’re not doing.  Bad parking alone is a sales killer.  I hear it from buyers all the time.

Finally, none of this matters is the price doesn’t work for the customer.  Gate 6 is pricing the show right.  Because 84% of people who come to Goldstar buy tickets to a show they were not thinking of buying before they came to the site, we know that price isn’t why they buy.  It is, however, the last gate and one that stops the momentum of going out and trying something new right in its disco boots.  We refer to a 50% discount as a ‘behavior-changing price point.’ That means, simply, that it’s enough to turn “virtual consumption”  (where people get through gates 1 to 5 and then stop, thinking idly about how much they would enjoy going to your show but not going) into actual consumption.  We may have done 5/6ths of the work, but we have achieved, in essence, zero.  No ticket buyer for you; no revenue for us; no growth of the live entertainment market.  It’s like catching a long pass in a football game on the last play, running all the way down the field to the other team’s five yard line and then sitting down as the clock expires.  Sure, it was a nice play, but it didn’t have a payoff.  The other team still won.  Our job is to get people over that line on our venue partner’s behalf.  Price alone can’t do it, but with customers who are new to something, it can help to reduce their perceived risk of getting out there and trying things.

So every time we send somebody to a show, we’ve gotten them through these six gates.  The way we look at our business is simple:  what can we do to help people get through those barriers in greater and greater numbers.  The result, we believe, is a bigger, more robust live entertainment industry, happy venue partners, happy members, and a more prosperous organization with a happy and helpful staff.

So far, the theory seems to be holding up pretty well.

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