Drupalcon pricing structure

Drupalcon North America has been announced and will be held in Washington D.C from August 4th to the 7th, 2009. Ticket prices have been announced as well as the ticketing scheme. Frequent Drupalcon goers probably noticed something new at Drupalcon Szeged, a tiered pricing scheme. In Szeged we started ticket prices out at 80 Euros and incrementally raised them to 250 Euros on the day of. In Szeged this was based on timeframe. Tickets purchased in June were priced at 80 Euro, a month later prices raised to 125 euros and so on until the day of the conference.

In D.C we did something similar but based this time it is based on actual ticket sales.

• first 100 @ 125 USD
• next 300 @ 175 USD
• next 400 @ 200 USD
• all others @ 250 USD

Why?
We introduced pricing schemes for Drupalcon Szeged as a direct result of Drupalcon Boston. In Drupalcon Boston we had expected 600 people to show up but just a month before the conference we barely had 400 paid registrants although 1,000s had registered online. This presented the Boston team with a real challenge as they were facing several hundred thousand dollars in costs. The Boston team had to make a lot of decisions, should they scale back? push people to buy tickets? do more marketing? What?

Scaling back is not an easy option when you are facing fixed costs such as the rent of a conference center, projectors, audio equipment, Internet, WiFi, etc. Without getting into the gory details of fixed vs variable costs (for the curious they are outlined here) lets just say that Drupalcon Boston was staring down a decent sized loss. Fortunately the Drupal community is awesome. In the last few weeks leading up to Drupalcon Boston ticket sales started to surge. Sales hit 600 tickets. Another 100 tickets were made available and those were quickly snatched up. The doors were shut but people still kept asking. Eventually the conference ended just over 900 people.

So what's the problem with this?

The Boston Drupalcon team was sweating bullets when sales has slumped and only a few hundred had confirmed their presence by purchasing a ticket. Several costs are variable, such as T-Shirts, lunch boxes, etc. but they require several weeks advanced notice. At Boston they were adding people by the tens just days before the event; which is simply not enough time to handle the extra load or keep the variable costs under control.

This is why the tiered pricing scheme was introduced at Drupalcon Szeged. The attempt was to get people to buy their tickets early which provides us with two items

1. Cash Flow
2. Accurate attendance numbers

Cash flow
Cash flow is an extremely important item to manage in a conference of this size. The conference venue is over $30k USD and they require cash up front. There are also expenses for Internet connectivity, catering, audio gear, etc. etc. all adding up to nearly $200k USD. Unfortunately these people don't wait until the conference starts to get paid, they want their money as soon as they can get it. The conference thus then relies on the money from tickets to help cover these costs to the best of its ability. The sooner we get the cash from ticket sales the sooner we can pay the suppliers and the less sweat and hair we loose.

Attendance numbers
Holding a conference for 400 people or a conference for 1,000 people changes a lot more than costs. The dynamic changes as well as the logistical challenges. In some respect the tiered pricing scheme worked very well for us in Szeged as it allowed the team to adjust the venue for the number of people. We originally expected 900 people in Hungary but ended up with just over 500. We saw a huge surge in ticket prices at the beginning and then a sharp taper off of sales. Although there was a bit more ticket sales towards the end the team was able to get a fairly firm grasp on the fact that we were not getting the 900 we expected and they adjusted items for 500 attendees.

Wrapping up
The entire purpose of the tiered pricing structure is to get cash in the door as soon as possible and to determine the audience size. If your considering attending Drupalcon please buy your ticket early. This way we can count your attendance and be prepared for your presence. Also this is not the only we way we are encouraging people to buy their tickets early. This year we started marketing earlier and also lined up a few presentations before the site launched. We also have a few other tricks up the sleeve.