Bruce Springsteen recently ignited an uproar by utilizing dynamic pricing for tickets to his 2023 U.S. concert tour. Dynamic pricing is the strategy of constantly adjusting prices in response to demand, a practice that consumers are accustomed to when buying airline tickets and booking hotels. In recent years, sports teams have begun using the technique, and Ticketmaster now offers musical artists the option of using it for concert tickets, too. As a result of Springsteen’s decision to allow Ticketmaster to use dynamic pricing, tickets for some of his shows reportedly jumped to over $5,000.
7 Lessons on Dynamic Pricing (Courtesy of Bruce Springsteen)
Raising prices is rarely frictionless.
September 30, 2022
Summary.
Some fans were outraged when man-of-the-people Bruce Springsteen charged more than $5,000 per seat for his upcoming concert. The high prices were the result of a dynamic pricing system, in which prices are adjusted upward in response to strong demand. This controversy illustrates seven lessons that managers should keep in mind when adjusting prices, including the need for clear communications, longtime customers’ expectation that they deserve a discount, and the fact that high prices will raise expectations about quality and service.