Price Restructuring
To: Governing Board of Signature Theater From: Jennie Greer, Director of Theatre AdvancementSubject: Price restructuringDate: 08-09-2008I am writing to discuss future pricing strategies that will enable us to continue in our mission to provide access to a diverse range of theatregoers, while maintaining our reputation as a high quality off-Broadway house.Since its foundation in 1991, Signature Theatre Company has been an important icon on the New York cultural scene. We exist to honor and celebrate the playwright and to make these great bodies of work accessible to most audiences. While we have focused our energies on increasing access by lowering pricing, we face competition from other theatres in New York offering similar incentives. How do we continue to attract diverse audiences to unsual, high quality work while remaining commercially viable? We need to create a differential pricing model that enables us to more closely meet out customer demands.
We saw great success with our Signature Pricing Initiative, the low price of $15 appealing to diverse audiences that filled the house to an average 105 percent capacity. The study that we have been conducting following the success of the initiative showed us that 80% audiences across diversities would return to the theater to see shows by lesser-known playwrights, provided the ticket prices would be the same as this season. With more awareness, we also saw an increase in subscriptions and donations. However, we must not forget that we were showing the work of a popular playwright and that we depended on corporate subsidies to meet our costs, both occurrences that may prove unreliable in the long term. We need to be able to charge more to customers who are willing to pay so that we can continue to offer low prices of $15 to audiences who may be deterred by an increase in prices. We will make all the data that we have gathered over the last two seasons available to our analysts to help them generate algorithms necessary for this differential pricing model. We will also encourage more subscriptions and donations though this strategy. I believe that the implementation of this model will help us carry through in our mission in an economically sustainable manner, without having to rely on large subsidies to fill voids in revenue. I look forward to discussing this plan with you in greater detail in our next strategy session.