Monday, 21 September 2020

Prospecting For Gold

 I recently read something that made me sit up and say "Oh, I never thought of it like that". It's about striking gold.

The story of gold prospectors is that all these grim and grizzly men (it's always men, in this story) go out into the hills, and some of them - the lucky ones - strike gold and get rich, and no one much cares what happens to the others. And this would be an accurate reflection of the economics of the situation - if it was just a case of one man going and looking and finding or not. 

But gold is rare. And because it's rare, it's expensive. It's expensive because it takes a lot of effort to find it; that expense reflects the total cost of the labour that goes into finding the gold which includes all the effort that's put in by people who go looking for gold and don't find any. Looking for gold and not finding it is part of the process of elimination by which the gold is found; no one expects come home with a nugget as big as a hen's egg the first time they go out. 

If, by the end of the gold rush, every square kilometre of mountain has been claimed and prospected, and all the gold has been found, then the value of the gold is clear - it's what's refined and been weighed. But the cost of the gold is the time everyone, collectively, spent looking for it - finding it and not. After all, if an evil multinational mining corporation buys the rights to prospect the whole mountain range, and then hires people to do it, they pay all their employees a salary. You get paid to go out looking for gold, because that's then your job, and whilst you might get a bonus if you find some, you don't get nothing if you don't. 

Anyway, this kind of unpaid, unrewarded labour - looking where the gold isn't - stuck in the back of my head, working away, until last night at dinner it popped out as a thought. 

"Oh. This is Grantium". 

Thousands of people spend thousands of hours filling in horrible forms, and a lucky few of them get grants, and the majority don't, and just view all that time as wasted.

We fund and structure the rewards and remuneration in the arts like a gold rush- the winners get everything, everyone else gets nothing, and we regard people who don't find their gold as being somehow lacking in dedication or talent, rather than an essential part of the process by which the rare and sought-after gold is found. 

And the only ones who make a decent living are the ones selling the shovels.

Tuesday, 28 January 2020

Paying What You Decide

I love Pay Way You Decide as a concept, and as a movement.

But boy does it make it hard to organise ticketing.

It's fine, of course, until you start selling out. Whilst you have room for everyone, there's no reason to turn anyone away, and if they decide afterwards that the performance was not worth anything, then that's no loss.

The problem comes when you have a limited capacity.

You can say "no advance booking, first come first served on the door". The problem with this is that if 200 people show up on the door and you venue has room for only 100, you're turning away 100 people who are presumably, if not your fans, then at least interested in what you're doing, and giving them a shit evening. Which is not going to fill them with warm feelings towards you.

So as we don't want this to happen, we might say "tickets can be booked in advance for free, pay what you decide on the way out". Which is fine, until your 100 seat space is fully booked for an event, but then it rains, and 50 of those people go "fuck it, it's raining, the tickets didn't cost anything, let's stay in", and you play to a half empty room (previously) when there WERE easily 50 other people who would have wanted to come in spite of the rain and they missed out.

The thing is, the money charged for a ticket isn't only about how the venue and performers get paid. It's also a commitment from the ticket buyer to show up - or otherwise they will have wasted their money along with everyone else's time. It's what makes a performance professional, and respectful, and stops people wandering in and out half way through and deciding to have a chat with their mates instead.

I really want to have an answer - to be able to say "yes, the system supports Pay What You Decide by doing X". And so I'm talking to myself here working out what X is, but part of the problem is that I'm not sure I know well enough what PWYD is for. 

Is it a way of minimising the consumer surplus, just another dynamic pricing strategy that maximises the total revenue by allowing each audience member to decide (based on their good feelings, rather than reviews and buzz) how much the show was worth?

Is it an audience development strategy, where the point is to get people who don't normally to go the theatre to take a chance on it, safe in the knowledge that if it's shit (or they completely fail to understand it) they don't have to pay, whilst avoiding giving such steep discounts that you fail to make any money off the nice middle class people who normally buy tickets and keep the doors open?

Or its it a radical rethinking of the role of the audience in 21st century performing arts?

Or perhaps Pay What You Decide just isn't a good fit for popular things that are going to sell out. Perhaps we should just accept that people who can't afford an expensive ticket paid in full in advance shouldn't have access to quality live entertainment.



Dropping coins in a hat is another thing that doesn't scale up terribly well. Lets assume we also have an interest in capturing data about our audience, and letting them pay by card.



So what can we do? Depending on the answers above, I propose some or all of the following:

1. Do ticket ballots for all performances - even ones that aren't going to sell out. Ticket Ballot winners will hopefully feel more special about having "won" tickets than people wbo advance booked PWYD tickets for free. This also allows us to capture marketing info about people who want tickets.

2. Charge a minimum ticket price for advance bookings, and only let people in with no minimum on the door, where entry is not guaranteed. It will be important to make clear that the advance fee is a minimum required to secure the booking, and the balance of "what you decide" is payable afterwards.

3. Charge a standard ticket price in advance, but offer a no-quibble money back guarantee for any reason after the show - as long as the ticket buyer is there in person. If someone says "I didn't like it, and I'd like not to have paid for it", then they get their money. But if they didn't show up then tough - no money back over the phone.

4. Have simple, contactless donation points available for people to donate after the show. This sort of thing: https://www.goodbox.com/



Tuesday, 10 July 2018

Premium

In response to: http://davewakeman.com/2018/07/the-problem-with-premium-seating-pricing-etc/

Most of the time, my response to someone trying to up-sell me the "premium" version is:




Everyone wants to be a premium brand, because they've heard that brands are valuable, and they don't really understand how that works so it looks like it's a way of getting free money, and they try to position themselves as "premium" and are baffled when no one cares. Almost all the time, "ordinary powder" is good enough.

Maybe I'm unusual, but what I put a premium on is my time and my convenience - not your advertising spend and your brand positioning. Dave mentions the infamous $16 beer and so here's a little experiment I'd like to propose:

Instead of having a bar that charges $12 for Bud (seriously what the actual fuck?) and $16 for a premium Blue Point Toasted Lager, have a bar that is very clearly split into two, with servers working either one half or the other. On one half of the bar, you sell all your beer for $12, and you have a big signpost to that effect. On the other half, you sell the SAME EXACT BEER for $16, and you have a big sign up saying that, too. (If you're talking about $12 or $16 per can the costs of the actual beer is obviously such a tiny proportion of the amount the buyer pays it's frankly irrelevant whether the beers have slightly different cost prices).

Obviously, people will buy beer from the $12 half. The staff working the $16 half will have very little to do. But at some point, the $12 half is going to get really crowded. There's going to be a long queue. And then someone's going to say "It's worth $4 to me to get my beer NOW and not have to wait for 20 minutes. I want to get back to my seat!". And some people are going to self select to the expensive half, because they're happy to pay the premium to not have to wait.

Now, I like beer, and these numbers seem mental to me. There's no way that any can of beer ever would be worth $16 to me, and I'd rather drink a bottle of piss than a Budweiser. But paying an amount that is massively over the odds to get the beer that isn't horrible would stick in my throat. I wouldn't enjoy it, and I would have a lot of negative feelings towards the people who organised the event. If you give me a choice between $12 piss or $16 drinkable beer, then I will resent you. Whereas if my choice is $12 beer with a queue, or $16 beer without a queue, then I'll think about it. Some times I'll queue, and sometimes I'll value my time more, and if I choose to pay $16 then that's my business and I don't hate you for it any more.



So, tickets. What's this got to do with tickets?

We're all familiar with seating plans with multiple price bands, and in no way am I suggesting that that is a bad idea.

The mistake is to think that "having better sight lines" is the premium for which people are paying. I would suggest that the real value of the premium seat is that they're still available when all the other seats are sold out. There's less competition for them. They're likely to be less crowded. And most importantly - and this is purest snobbery and I'm not saying I agree with it, I just don't think it serves anyone to ignore it - the biggest premium is not having to sit next to a poor person. If you're in the most expensive seats in the house, the chances of having a teenager eating popcorn and physically incapable of turning off their phone as your next door neighbour are much lower.

Those premium benefits - real benefits that people are happy to pay for - are not because the seats are better. They're because the seats are more expensive. They're not in spite of the differential pricing: they are because of the differential pricing. If you have any customers you think are rich enough to value these benefits, you should probably take some of your existing seats and call them "premium". If they don't sell, put them back to normal, and if they do, it's free money.

Monday, 2 July 2018

Creating a culture of innovation

Incentives matter.


I'm not sure how this isn't obvious to everyone already, but one bumps into enough organisations that have got their incentives wrong that I guess it can't be.

Here's a random link that I just googled: Lesson 3: Incentives matter which is presumably from Econ101 somewhere. For now let's just note: "Incentives can be monetary or non-monetary". This applies to staff and to customers equally.

Suppose you want your customers to book tickets online, because it's cheaper for you that way. Don't, whatever you do, apply a booking fee that makes online purchases more expensive than telephone ones. Even if it's also more convenient for your customers, even if they would be prepared to pay for that convenience, don't send them the message "If you want to save money please do the thing that annoys me". Don't make them jump through hoops in some horrible checkout process that's more effort than speaking to a person. Don't make them answer onerous marketing questions online that they can avoid by picking up the phone.

Suppose you want customers to book in advance, so that you get your money earlier and they don't decide they can't be bothered at the last minute. Don't, whatever you do, apply any kind of booking fee or discount structure that means that the cheapest way to buy tickets is on the door, on the night. Don't make booking in advance - the thing you want them to do - more difficult or more irritating or more expensive.

Don't set up multi-buy offers that mean that if the customer splits their purchase into two separate transactions they save money. I keep having to stop people from doing this! I think it points to the problem: it's easy to think "I want to set up a offer to encourage people to book" and it's easy to think "Hang on, I don't want to give too much away, let's just limit it to at most 4 tickets (implicitly: per order)", and somehow it's hard to notice that someone booking 8 tickets is incentivised to book them in two lots of 4, which makes it cheaper for them (discounts on all the tickets) and more expensive for you (some of your transaction processing costs are per transaction, not per ticket). People just don't look for or think about unintended consequences of otherwise sensible seeming ideas. Perhaps I notice them because I've trained my brain to look for them over 20 years of writing code: most bugs that aren't simple mistakes are unintended consequences.

In short: don't punish people for doing what you want them to do, or reward them for doing what you don't want them to do. Debug your incentives.

So.

Suppose you want your staff to come up with new ideas. Ideas that you yourself in your fancy c-suite or your plush managers office can't have, because you're too removed from the daily grind to know where the inefficiencies are.

Then you need to get the incentives right, and in this case it's mostly about the non-monetary incentives. Actually, it's mostly about the non-monetary disincentives for someone to speak up with a new idea. If saying "hey, what if we do things differently?" gets someone punished by a manager yelling at them and calling them stupid, they're not going to do it, are they? If saying "hey, if we did this, we'd waste less paper" gets a response "true, but we can't because that's the procedure and i'm not authorised to think and head office wouldn't like it", then people will eventually give up having ideas.

You can't create innovation. All you need to do is stop suppressing it.
  • Don't make them have to fight to get you to listen.
  • If it isn't actually a good idea, don't punish them for having it, and don't punish them for suggesting it - by mocking or shouting or any other negative communication. Just gently explain why you think it's not a good idea.
  • Don't start by assuming that it won't work. Chesterton's fence is a useful heuristic, but sometimes the reason for the absence of a fence that would have been useful really is simply that no one had thought of it yet.
  • Whilst explaining why it won't work, see if instead of saying "that won't work because of X and Y and Z and all my years of experience", you can say "in order to make that work we'd have to solve these problems - X and Y and Z", and then you can talk about whether those problems are worth solving and if so how you would approach them.
  • If it really is a good idea, don't punish them for suggesting it by stealing it and claiming it as your own. 
  • Try it out. If it works, give them the credit. If it doesn't work, you take the blame. If that doesn't seem fair to you, then you are the wrong person to have a job that includes "creating a culture of innovation" as part of its description.
  • Don't hire insecure managers whose lack of confidence in their own abilities leads them to attempt to defend their own positions by suppressing the creativity of their subordinates.
  • Don't make it a zero sum game. If something nice happens to someone because they've had a good idea, don't take that out of any communal pot.
  • Don't insist on consistency and procedures in any areas where they are not important. If everyone is allowed to do things their own way, then someone's going to find the best way of doing it. Then they can share that. You can't share best practice if you can't find it because all practice is required to be identical.
  • If your lack of consistency and procedures occasionally causes problems, forgive them. You can either have a perfect process run by automata that never creates any innovation, or you can have process run by flawed people doing their best, and sometimes they'll drop the ball, and sometimes they'll spot something that a pre-defined process would never have done that saves the day.

Here's John Ruskin putting it a different way in Chapter 6 (The Nature of Gothic) of "The Stones of Venice":

"And observe, you are put to stern choice in this matter. You must either made a tool of the creature, or a man of him. You cannot make both. Men were not intended to work with the accuracy of tools, to be precise and perfect in all their actions. If you will have that precision out of them, and make their fingers measure degrees like cog-wheels, and their arms strike curves like compasses, you must unhumanize them. All the energy of their spirits must be given to make cogs and compasses of themselves. All their attention and strength must go to the accomplishment of the mean act. The eye of the soul must be bent upon the finger-point, and the soul’s force must fill all the invisible nerves that guide it, ten hours a day, that it may not err from its steely precision, and so soul and sight be worn away, and the whole human being be lost at last—a heap of sawdust, so far as its intellectual work in this world is concerned; saved only by its Heart, which cannot go into the form of cogs and compasses, but expands, after the ten hours are over, into fireside humanity. On the other hand, if you will make a man of the working creature, you cannot make a tool. Let him but begin to imagine, to think, to try to do anything worth doing; and the engine-turned precision is lost at once. Out come all his roughness, all his dullness, all his incapability; shame upon shame, failure upon failure, pause after pause: but out comes the whole majesty of him also; and we know the height of it only, when we see the clouds settling upon him. And, whether the clouds be bright or dark, there will be transfiguration behind and within them."


Friday, 29 June 2018

Reading Reports: An analogy

I was trying to think of the right analogy for what finding and seeing patterns in data is like, and I think the closest I'm going to get is this:


The objects making up the logo are there all along, hanging in seemingly disconnected places in the air. But as the camera's point of view moves through the scene, suddenly we look at them from the right point of view, and then the 4 is clearly visible.

That's what finding something in the data is like: it's always there, but you need to be standing in the right place, thinking of the right questions, to see it.


(
Obviously there are more forced pespective sculptures in the world than just the Channel 4 logo, but that was the one that came most readily to mind. Here's one:

 
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Wednesday, 27 June 2018

Reading Reports

One of the challenges we're working on at the moment is helping people read reports.

The funny thing is, writing reports is easy. (Easy, if your SQL and XSLT are up to scratch, but they aren't very hard skills to learn). When we started out, the system shipped with hardly any reports, and I said to people "I've got few reports here, but if there's a report that you need that we don't have, we'll write it for you. Writing reports is easy". So now, we have loads of reports. And it turns out that reading reports is hard.

Even reading report names is hard. Because we now have loads of reports, and because it's hard to describe what they do and how they work in a single sentence, our most common report related support question is "Which report contains the information I want?". Right now someone's going over all of them with a view to rationalising them and improving the clarity of the description. I don't know what the answer is going to be but I expect it will look like more tags and more filtering options.

The reason why it's hard to find the report you want is that there are lots of ways a report can do its calculations.

Suppose you sell a ticket on the 1st of the month for show A, and then you exchange it for a ticket for show B a week later.

Some reports are based on the transaction log, so if you ask for the sales for show A broken down by day for that month, you see a positive entry on the 1st, and a negative entry on the 8th. If you ran the report just for the first week of the month, you wouldn't know that anything had been cancelled at all. Reports based on these transaction logs are useful for payment reconciliations: if you're trying to reconcile what was in the bank at the end of the 1st with what the database says you've sold, then you absolutely need to know about that sale: from the point of view of the bank statement at the end of the day, the cancellation hasn't happened yet.

Some reports are based on the current status of the orders / tickets. If you run a report saying "how many seats have been sold for show A as of now" and then you cancel an order and then you run the report again, the cancelled order no longer shows up. We don't care that it had been sold in the past and then cancelled, we just want to know whether or not it is sold right now. And even these reports can be broken down by day: "of the tickets that are currently sold for this show, how many were sold per day over the last month" is a valid question. If you ran a report like that on our scenario above, the tickets that were sold and then cancelled wouldn't show up at all - even if you filtered the report down to "the first 7 days of the month".  Reports based on the current state of orders are useful for sales analysis and promoter returns: if you want to know whether an advert you bought on the 2nd performed well and you're looking at sales you made on the 3rd, you definitely want to ignore any sales that were made on the 3rd and subsequently cancelled: those don't count towards your ad performance.

So the second most common question is "Why do these two reports on the same date range return different numbers?". And the answer to that is usually this difference in the basis for calculation: both methods are "right" in different contexts, but they'll give you slightly different answers.

If it's not that, then it's either "One figure includes booking fees and transaction fees and delivery fees" (useful for payment reconciliation) and "One figure is just the ticket value net of fees" (useful for communicating with promoters: the fees you charge are none of their business), or sometimes even "One report's date range is filtering by performance date and the other is filtering by order date".

Given that people consuming reports don't much want to understand how they work, and that reports can work in different ways that it's hard to express without a couple of paragraphs of text, that makes reading reports hard.

What people say they want is "a sheet with all the data so that I can see the various combinations for myself". But although such reports exist, they're not much use. The raw data is just a list of ticket amounts with transaction dates - plus an awful lot of parameters that they have to be grouped by in order to mean anything much: show or performance or genre or order date or performance date or sales channel or ledger code... The best reports answer a specific question: generic lists of numbers to allow someone to figure it out themselves don't get used much. You can reconstruct a sales movement report over a month by giving someone the job of running the "payment reconciliation today" report every day of the month and coping the figures into a spreadsheet (I've seen it done in venues converting from another system to Monad), but really, your sales movement by day is one thing and your payment reconciliation another.

Because good reports can only answer one question at a time, if you're looking for strategic information on what you're doing well and what you could be doing better, don't go looking in your day-to-day operational reports. Your front of house report is designed to give the FOH manager everything they need to get the audience in and the show open: it will be hard work spotting long term sales trends in it. Your payment reconciliation reports are designed to make sure the numbers we calculate for sales today align with the numbers in the bank account - broken down by transaction date and payment type, but not by show or genre. Your promoter sales returns show the final destination of the show's sales performance, but not the route it took to get there.

Reading reports with an eye to identifying challenges and opportunities means reading reports to identify patterns, and those patterns won't be visible if you aren't asking the right questions. You might be interested in how far in advance of a show people book, and a report like "Chart: Advance Booking Trends" with parameters "All Films" / "Performance in the last week"


(scale obscured because this is from real data)

might make you think that most of your cinema sales are on the door and you shouldn't worry too much about advance booking... but drilling down into just a single PG rated film shows a different story:



People who've promised their children that they're going to see a film behave differently from the general public - who knew?! I didn't, until I looked.

And a music event tells a very different story:

With people either sure they're going well in advance (dedicated fans - but not enough to sell out) and people deciding on the night, but almost no sales in between.

Your ticketing system will be collecting an enormous amount of data for you, and that data is there to be analysed, but in order to do that you have to start with a question. You can't just stare at reports hoping that the answer will leap out at you like magic lawyer speed reading a telephone directory in a movie.

Let's suppose we want to sell more tickets, because who doesn't? Well, to sell more tickets, we need to know why people buy tickets, and what stops people from buying tickets. Making people want to buy tickets is someone else's job (and, the show has to be good), but it's easy to want to go to a show and not buy a ticket. There are loads of plays and films and gigs I want to see that I don't buy tickets for. So let's look at what stops people buying tickets. Is it money? Then let's look at sales by day of the month. If most people get paid at the start of the month we might expect to see on average more orders on the 5th than on the 25th. Is it the time it takes to make the booking? Then let's look at sales by time of day, and if people are too busy to research and book tickets at work we might see a spike at 7pm when they get home. Is our box office open to help with these calls, or do most staff go home at the same time as our customers do? Is it that they're too sober? Let's look as see if there's a spike at 11pm when the pubs kick out. Is it the time that it takes to attend the performance? Then let's get some hard numbers on how much Saturday tickets out sell Wednesday tickets, and use that to inform how much more we charge for a ticket on the weekend or during half term.

I don't even work at a venue, and there's a bunch of questions right there that I find interesting and that I wish that my customers asked more often. We don't currently have reports that break down sales by time of day or day of week, because literally no one has ever asked, but that's exactly the kind of report I would be delighted to write if I thought it would ever get used.

Friday, 17 November 2017

Things I hate it when people ask for them (2): A discount on the first 50 tickets sold

Now, we can do this. We can set up a package that applies the discount, and make the package use a promo code, and we use the special promo code "AUTOMATIC" which is always applied to the basket without someone needing to type it in, and then make the promo code so that it can only be activated 50 times and after that it stops working.

I just think that we shouldn't because it is basically a terrible idea. It leads to all sorts of weird behaviour when you get near the limit and it doesn't effectively motivate people to buy more tickets. 

Suppose 49 tickets have been sold, and I add 2 to my basket. One is at the full price, and one at the discount price. This looks odd and you get a call in the box office and you have to explain to me why the prices are weird.
Then someone else add a ticket to their basket. They see it at full price.
I decide I can't be bothered and remove the tickets from my basket. They look at their basket. Suddenly their ticket has gone down in price!

For general admission shows it's much clearer to have two separate products on sale: "Cheap tickets (Only 50 Available!)" and "Normal Tickets". When the Cheap Ticket have sold out it's clear that someone should manually add a normal ticket to their basket.

For allocated seating it makes more sense to use price bands. The cheap seats should be the bad seats at the back. Someone who will only go if they get the discount can do so, and they can sit at the back of the stalls, and someone who wants the front row can pay extra for it even if they're first in the queue.

If you want an early bird discount, make it time based, not quantity based. If someone sees an offer advertised and it expires tomorrow, it provokes them to buy today. If they see an offer advertised and it says "First 50 tickets cheap", and then they try to buy a ticket, they either find:
* The cheap tickets have been sold, and they're disappointed.
* The cheap tickets haven't been sold, and perhaps they can leave it until tomorrow, and they don't buy now.
neither of which causes immediate action.

A time based discount encourages people to book early, which you want. A  quantity based discount encourages people to book first, which they have no control over, because that's down to how many other people have booked already.

If the show flops, your quantity based discount still applies to those sad tickets being sold on the door. If the show sells well, you probably didn't need to give a discount. Either of these outcome is the opposite of revenue maximisation.

Rather than keeping a strict count of exactly how many discounted tickets have been sold, one alternative would be to use dynamic pricing to check every 30 minutes whether more than 50 tickets have been sold, and if they have been, puts the price up from your earlybird price of e.g. £20 to the full price of e.g. £25. This removes the problem with weird edge cases where a basket has a mixture of discount tickets and full price tickets. But it does mean that if 49 tickets have been sold, and then we do our check, and then in the next 30 minutes another 10 tickets are suddenly sold, and then we put the price up, the promoter looks at their sales return and says "I told you only to sell 50 tickets at the discount price and you sold 59! You owe me £45 you bastards", which also a pain, unless they understand and agree it might go over.




In short: there are loads of better ways of doing promotional discounts. Make it a 3 for 2 offer. Put a code on your Facebook page and make it give the discount "for a limited time" and keep an eye on it. Make an earlybird discount with a fixed end date. Use dynamic pricing to tweak the price for you. Wait to see how early sales go and THEN do a discount if the answer is "badly". Do flash sales and promote them on socal media.