How much do firms lose due to mis-pricing? It is in the billions every year at least for sports and entertainment companies. Scalpers take much of this “lost” revenue. Some sports teams, however, are starting to manage their pricing similar to the way airlines do to ensure that planes are full (or at least as full as possible). After all, an empty seat for a 1PM game is lost revenue forever. The appropriate pricing for a game and a seat may depend on the weather that day, the rivalry, the presence of big name stars or lack thereof, and the quality of the opponent, etc. It changes every day. It does not make sense to price a full season on opening day.
While many firms do not hold events or trips like sports teams or airlines and “lose” revenue with an empty seat, the questions is “Is your pricing structure attracting the highest profits for your company?” Appropriate pricing must be carefully considered for the success of most companies.
