Having the right ticket pricing strategy is a crucial part of your online fundraiser’s success. It is one of the factors that can drive higher sales for your fundraiser, and help you meet (and even exceed) your fundraising goals. Most fundraiser organizers find it easier to price their tickets as ‘cost plus profit’. A few others simply look at similar fundraisers and decide on the best ticket price to ensure competitive pricing.
It is important to understand that ticket pricing can maximize your fundraising potential. Therefore, you want your ticket prices to be priced right in order to attract donors from your intended demographics. At the end of the day, it comes down to how much your donors are willing to pay that will determine your fundraiser’s success.
What is an online fundraiser?
An online fundraiser is a fundraising event that is hosted online to raise money for a nonprofit or charity. These include virtual auctions and marathons, webinars, and online gaming-based fundraisers such as raffles and sweepstakes.
Online fundraisers are not a new concept; they have always existed but have gained massive popularity after the pandemic. The COVID-19 pandemic has changed a lot of things, including how fundraising is done. The pandemic has greatly diminished nonprofits’ ability to raise funds through traditional activities such as galas, dinners, and events. But online fundraising is a great alternative where many are finding success.
On the other hand, consumers have changed the way they interact with organizations in literally every industry and nonprofits and charities are no different. Online digital platforms have become the preferred medium mostly due to internet accessibility, technological advances, and the flexibility of doing things from the comfort of our homes.
A snapshot of online charitable gaming
Many nonprofits are choosing online charitable gaming thanks to its wonderful benefits such as lower costs and increased donor retention. Here are some of the more popular and tested ways to run charitable gaming online:
50/50 Online Raffle: A 50/50 charity raffle, as the name suggests, has a prize pool or ‘pot’ which is split 50-50 between the charity and the winner. Ticket sales fund the prize pot and a winner is selected via a draw. The campaigns usually build momentum when repeated every month. Also, the size of the winnings is usually life-changing amounts that encourage people to take part in online raffles.
Sweepstakes: Sweepstakes can provide a great way for your fundraising efforts to go big and broad—often nationwide. With the different laws governing the various states and countries when it comes to sweepstakes, it is best to have a licensed sweepstakes organizer who can take care of everything for you.
Catch the Ace: It is a multiple-draw lottery that usually runs up to 52 weeks, or until the Ace is discovered. The winner selected during weekly draws wins a portion of the proceeds from the ticket sales and gets a chance to pick a card from the deck in the hopes of finding the Ace. If the Ace is found, the winner takes the jackpot. And if they don’t, then the card drawn is removed from the deck, and the progressive prize portion of the sales from the tickets is rolled over to the next month.
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Importance of having a ticket pricing strategy for nonprofits
The right ticket pricing strategy means higher ticket sales and larger profits. Unfortunately, most charities and nonprofits holding fundraisers don’t know how much they will raise until after the event is over. This is a challenging situation especially if you want to meet your financial goals.
6 tips to help your nonprofit outline a pricing strategy:
1. Start with your fundraising goal/target amount
The number one thing you need to remember is the amount of profit that your organization intends to make through the fundraiser. This should be top of mind for you as you decide on your ticket price. Don’t forget to calculate the costs of the fundraiser to get a very clear understanding of how to price your tickets.
2. Consider audience demographics
A big part of running a nonprofit charity means understanding your target audience as much as possible. Knowing how much your specific demographic can afford to pay for a ticket is a big factor when deciding on the ticket prices. If you’re trying to sell a $100 ticket to people with limited funds or a $5 ticket to affluent people, it may not work out. Factor in your demographics when setting ticket prices.
3. Evaluate early bird pricing
Create two price points for the tickets when planning a fundraiser—regular and early bird. Early bird pricing can be in place usually a month or two in advance. It allows your donors to save ticket costs by $5, $10, $15, or even $50 and provides an incentive to your guests to purchase early and save money. It also usually leads to a higher number of sales. Additionally, without last-minute ticket sales and the rush, your team will be able to plan and execute better as you inch closer to the event.
4. Plan your budget and tally your expenses
It is very crucial to have an expense budget for your fundraiser. Without it, chances are that you might not be able to see impactful profits or any profits at all. If you are planning a physical event then you should include the cost of the venue, catering, decorations, etc. With an online fundraiser, consider the cost associated with marketing, running the online program, and partners or service providers assisting you in reaching your goals. It is the break-even cost you need to earn back through ticket sales plus the profit.
5. Plan the prizes
As a general rule of thumb, the higher the value of your prizes, the more you should be able to charge per ticket. For prizes that have an approximate cash value of $1,000, can have tickets priced at $2 to -$5 (depending on the number of tickets expected to be sold). Costlier prizes of up to $2000 to -$3000 can have ticket prices of $10 to -$15. And with large cash prizes or bumper prizes like cars and homes, ticket prices can be as high as $100 to -$1000 or more.
6. Decide on the number of tickets
Ask yourself how many tickets you will need to sell to cover your costs and also reach your financial goal? Think in terms of the number of people who will need to purchase the ticket to make it happen.
This might depend on a couple of factors such as the number of people that are part of your community and network. Do you have enough volunteers to help you sell the maximum number of tickets? Will you run any marketing campaigns before the fundraiser to increase outreach? Factor all of these elements in. A tip to keep in mind is that people will usually buy multiple tickets if there is a quantity discount attached to them.
Deciding on a pricing strategy can be tricky and depends on a lot of variable factors. But getting it right is a crucial factor that your success depends on.
