Rafi Mohammed

So…How Much are You Willing to Pay to Dance the Night Away at the World’s Largest Disco Party?

Posted on August 25th, 2008 (1 Comments)

As we all know, pricing is a challenge faced by every company in the world…even The World’s Largest Disco is innovating its pricing strategy.

Held annually on the Saturday after Thanksgiving in Buffalo, New York, The World’s Largest Disco (as certified by the Guinness Book of World Records) is the place to boogie to classics like YMCA (which I was surprised to learn is number 7 on VH1’s “The 100 Greatest Dance Songs of the 20th Century” list). With all of its profits going to charity, according to a great article in the Buffalo News by Stephen T. Watson, the event is tinkering with prices this year in an effort to capture more consumer value.

Last year, the pre-sale price started at $28 and rose in price over time. Most of the 7,000 tickets were sold during the pre-sale period to regular customers. The remaining tickets sold out within 20 minutes of being available to the public. Founder Dave Pietrowski is quoted as saying he had a waiting list of about 1,100 people. This is a high demand event.

Instead of just raising prices across the board, this year revelers of the 70’s era are being offered choices. Prices are starting at $50 and will drop in $5 increments over time to as low as $35…though there’s a good chance tickets may sellout before the $35 price is reached.

This declining over time price strategy is a classic way to capture differing customers’ value. Partygoers who have a great time every year, hence are willing to pay a high price to enjoy the fun again, are more inclined to purchase early to ensure they get a ticket. Those with lower valuations - “at $50 it’s not worth it to me, but if I can get a ticket for $35, I’ll go” - are more willing take the risk for a lower price. So high value customers pay a premium for certainty while those with lower valuations wait in hopes of a lower price…that is if tickets are available.

As every good pricing strategy should include, The World's Largest Disco employs a versioning strategy: its $125 VIP tickets (which promise that if Elvis, John Travolta, or Farrah Fawcett show up, they’ll be in this exclusive area) are already sold out. Perhaps next year these VIP ducats will start off at a higher price and decline over time. This sounds like a great party…tickets are available to the public on September 6.

On another note, my sincere thanks to Ivana Taylor for her kind recent review of The Art of Pricing. It’s very gratifying that 3 years after its release, business readers are still enjoying The Art of Pricing. I’m writing every morning so that my follow up pricing book will be published on time in Fall 2009.

Enjoy this traditional last week of summer and upcoming long weekend!

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Readers' Comments on This Blog Entry

From Steve on August 26th, 2008
Boy, are you a buzz killer. Maybe next year they can start out at $500. That way they can really screw over the people that have been supporting them from early on. You know, "Hey, you've been coming since year one and you know it's a great party, so you want to buy early (which saves us on advertsing). How about we screw you for being a faithful supporter?" Enjoy!!