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Create dynamic pricing strategies
Create dynamic pricing strategies

In this article, you will learn how to create dynamic pricing strategies.

Updated this week

1. What is dynamic pricing

Dynamic pricing is a pricing strategy that adjusts prices in real-time based on various industry-specific factors such as:

  • demand

  • weather conditions

  • peak and off-peak hours

  • days of the week versus weekends

  • time remaining before an event,

  • and more.

The benefits of dynamic pricing

  • Income maximisation: expected increase in income between 10 and 30%.

  • Adaptation to demand fluctuations with real-time price changes

  • Guaranteed early bookings as people tend to book 2x earlier with dynamic pricing. This helps to better anticipate event organisation and cash flow

  • Increased online booking share by 10%. People are exposed to more complementary products in the booking flow, which increases revenue through cross-selling

  • Improved online conversion rate

  • Spreading demand over off-peak hours through encouraging prices, which can increase overall patronage by up to 10%.

  • Increased customer satisfaction when they know they are getting a better price because they book in advance

2. Which dynamic pricing strategy to use

To familiarise yourself with dynamic pricing, our specialists have prepared 3 ready-to-use strategies that are already present in your Smeetz account. You can modify them without further ado to see how they have been configured and adapt them to your needs.

To access them, click on "Revenue Management" in the navigation bar of your account, then "Dynamic pricing".

The three pre-existing strategies are the following:

  1. Linear Growth

  2. Exponential Growth

  3. Revenue Growth

If you are already familiar with dynamic pricing, you can create your own strategies from scratch.

3. How to create a custom dynamic pricing strategy

To get started, "create a strategy".

On the right, a new tab opens with the configuration of your strategy.

Step 1

The elements to be filled in in the 1st step are as follows:

  • Details: name and description of your strategy

  • Activation: By checking this box, dynamic pricing will only be activated when a certain occupancy threshold has been reached.

The occupancy threshold is chosen as a percentage of the total number of tickets.

For example, if you choose a 10% occupancy threshold with a total quantity of 100 tickets; the smart-pricing strategy applies after selling 10 tickets.

  • Recalculation: Here you choose when your price has to be recalculated, i.e. modified with a new amount. You can choose between two options:

    • Define a number of minutes: the sales price will be recalculated every x minutes (e.g. every hour if you choose 60 minutes).

    • Define a number of tickets sold: the sales price will be recalculated when x tickets are sold (e.g. every 50 tickets if you choose 50).

  • A/B Testing: by ticking this box you are setting up an A/B testing strategy. This means that one group will be affected by dynamic price changes and another group will only see your base price which will remain static. With this control group, you can easily measure the impact of your smart pricing strategy on your customer base.

You choose the percentage of your sales to which you want to apply smart pricing.

For example, by choosing 80%, 80% of the customers who see your activity will be subject to dynamic pricing and 20% only see your normal.

Step 2

Then, you select your pricing model:

  • Pricing model: The pricing method you choose is the most important element of your strategy. This will define how our algorithm will calculate your optimal prices. The 6 pricing models to choose from:

You can save your strategy at this point.

To link your pricing strategy to a ticket, go to this article: Link dynamic pricing strategies to your tickets

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