Value: It's Ever Changing and in the Eye of the Beholder
Ever-Changing Value. As a fan of classic rock, I am seeing my fair share of concerts this summer at outdoor amphitheaters. Last weekend I saw Jimmy Buffett, who at age 64 continues to perform outstanding shows. What struck me is the realization that as Mr. Buffett has aged, so, of course, have his fans. And as his followers have aged, what they value has evolved.
Every year, I splurge (pay $40) for VIP parking for this annual beach-inspired concert. I never have a problem purchasing this premium parking which offers easy access and exit from the parking lot. It can take hours to exit the parking lot after a concert. But with VIP parking, you are out in less than 5 minutes – that’s value. This year, however, VIP parking sold out almost instantaneously. The clever venue then started promoting a VIP access package, which for $60 provides VIP parking, special entrance (no lines), and a private tent with refreshment stands and restrooms. This $60 package sold out immediately too. Boomers don’t want to wait and are willing to pay to avoid doing so.
The other interesting observation is that lines for refreshments were virtually non-existent. While the shaky economy and $10 beers don’t encourage purchases, low sales also underscore that boomers simply aren’t eating/drinking as much as they used to. Since refreshment sales are so important to profits – it’s a key trend for concert promoters to be concerned about.
Bottom Line: It is usually a new insight to set prices to capture value – but the bigger revelation is that maintaining profits/generating growth is dependent on correctly anticipating and providing what your consumer base will value in the future.
What is Valuable? I recently purchased my first “limited-edition numbered” print. Since I had heard that a lower number in a print run is considered more valuable, I requested a low one. Pleased when I received number 15 (out of 750), I proudly took the print to a local framing shop and excitedly pointed out my low number to the proprietor. Piercing my bubble of riches, this experienced framer informed me that actually, lower numbered prints are not more valuable. Disappointed, I realized that this makes sense – I would expect different prices to be charged based on the number.
But this framer did share with me an interesting insight about value. He mentioned that when people collect work from an artist, they always request the same number of a print run. Thus, there would be enhanced value to sell a collection of works from a specific artist that included prints that were all numbered the same; say a collection of 15’s from an artist.
Bottom Line: Value is in the eye of the beholder.
Readers' Comments on This Blog Entry
Could the low beverage sales also be tied to the inadeqacy or poor location of public restrooms? Older people do tend to need relief more frequently. But $10 is ridiculous beyond ridiculous promoting smuggling the flask or drinking up before arriving. Are they cannibalizing their own profits with such high prices?