Pricing commercial parties & group events for maximum ROI

by Frank Price

Frank Price is the founder of Birthday University and FL Price and Associates training firm. He is an occasional contributor to our Leisure eNewsletter and one of the presenters at Foundations Entertainment University.

Folks Want Value

Now more than ever, value (as perceived by the customer) will dictate most buying decisions and especially return visits. Anxiety and conservatism caused by the uneasy economy did not cause families to stop having party celebrations or organizing group events; it caused them to be more prudent as to how and where they were willing to spend the money they budgeted. Some parties got smaller, some looked for something new (variety) and others went ahead, but were more critical asking themselves; "Will it be worth ... what I'll have to pay?

Until recently, consumer's (especially family consumers) time or there lack of, became as important as the cost of the service in their buying decision. In today's economy, where every family leisure decision is carefully budgeted and calculated, intangible value, how they felt throughout their visit, and was it worth what they paid, determines whether they come back. These feelings are measured by value perception.

Value cannot be seen or touched, but is much more on the mind of your clients than it used to be. They literally can't afford to make a mistake with their money. It's too painful, not only to make a bad choice for this special, once a year celebration, but to over pay for a bad choice is unbearable in today's tight economy. Value equals the perceived benefit (how they feel) divided by the price.

Value = Perceived Benefit / Price

You can create value in two ways:

  • Lower the price with discounts or coupons.
  • Increase the perceived benefit of what you deliver in their terms, not yours.

In the commercial birthday group events world, lowering your price accomplishes two things:

  • If you are the lowest price option, you will capture approximately 27% of the market who buys on price alone. Although in the end they may still be unsatisfied that the party or event perceiving it was not special, because it lacked excitement or wow value, even though in your mind they got what they paid for.
  • Your low priced offering will define your party / event experience as lower quality offering. According to the unwritten principle, "The law of the price", people tend to trust higher priced items as being better, just because they cost more. In a study that offered the same $10 wine, re-bottled with a $90 price tag produced results to support this. Check out the study: It means that if it's less expensive it must not be as good and definitely not the best. No one wants to admit being cheap, when it comes to a party for their child, even if economically pressed.

It's a Lose-lose Scenario

Your business literally can't afford to produce the best quality party / event when your price is too low. Expenses are virtually the same to run the event, no matter what you charge. It requires the same amount of labor effort and occupies the same amount of space on your busiest day(s) of the week. It "Dis" eases your business by cutting directly into your profit margin.

No matter what they paid, if in the end they did not perceive a positive value and walk away unsatisfied, they will not come back for another and definitely opt out of your "WOMMA". (Word-of-Mouth Mom Army)

Adding greater value (especially intangible value) is critical for long-term growth. When your program blends or is inferior to your competition, you will eventually be defined as the "Not good enough for me or my child's party" and overlooked by the 73% of the market who desires to give the absolute best for their children on this special day and are willing to pay for the memory, even in a tight economy.

Tangible Value

  • Multiple attractions for a variety of age groups.
  • Change often, everything must work.
  • The overall look and feel of the facility, including your employee's.
  • Is it clean, fresh and up- kept?
  • Positive sensory ambiance, festive party rooms.
  • All-inclusive party packages, everything required to eliminate frustration and get the results they desire.

Intangible Value

  • Adding back the "TLC" (tender loving care)
  • Employee team interaction.
  • Party child was assured the center of attention.
  • Moms feeling in control, even though they do not do any of the work.
  • Mom/Dad are taken care of and feel appreciated. Their needs are met
  • Unexpected surprises along the way.

When you add value and save time, you can charge more...So Raise Your Price!!!

The economics of birthday parties and family events are similar to that of all other businesses. As each offering moves up the economic ladder, the perceived value, as well as its price increases. History has taught us that the manufacturing of goods is tangible, delivering a service is intangible, and a personalized experience is memorable. (Read Pine & Gilmore's The Experience Economy, Updated Edition. It's tough to get through, but worth reading) Each economic evolution added value, saved time and improved the end result and thus consumers are willing to pay more for it.

All-inclusive birthday party and family event offerings have increased their appeal to parents seeking to save time, energy and solve their inability to entertain children with expected modern day fun. These celebrations are such a special time for families, it's only natural to create special long lasting memories. Unfortunately, it's just as easy to create lasting negative memories when not careful.

Frank W. Price is the founder of Birthday University and FL Price and Associates training firm. For more BU class information or custom development and training of your group programming concepts, contact Frank at, or 919.387-1966