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Pricing lessons from the London Olympics (Harvard Business Review)

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The committee organizing the London 2012 Olympic Games had to price 8 million tickets in a way that allowed equal access, met revenue and attendance targets, and was fair. Studying the committee’s multi-year pricing process has revealed five pricing principles that every business can use. First, focus on relationships, not on transactions. The committee increased the number of pricing tiers to keep some ticket prices low while still hitting revenue targets. Second, be proactive. The committee avoided bundling tickets because it adds cost to the consumer and doesn’t necessarily fill seats. Third, put a premium on flexibility. The committee gauged actual rather than anticipated demand by not predetermining the number of seats in each price tier. Fourth, promote transparency. The committee was open with the public in their rationale for ticket pricing; media’s attempts to stir controversy have fallen on deaf ears. Finally, manage the market’s standards for fairness. Ticket allocation was done through a lottery to make sure there was no preferential treatment for highly desired events.