Understanding, Managing, Earning
What is a Service Fee
A service fee is an additional charge that a customer pays when placing an order to purchase tickets or other services. This fee can be fixed or tied to the price of the service. For example, when booking a hotel, a customer may pay an additional 5% of the room rate for booking on the website, just like when purchasing tickets.
Who controls service fees
Usually, agents (ticketing systems, box offices, ticket platforms) charge a commission from both the buyer and the organizer, reaping double benefits. This leads to the final ticket price not being entirely dependent on the event organizer. In most cases, agents control service fees because they provide them with income. As a result, the total commission can reach 15% or more.
Cost and Loyalty management
Personalized service fees
Modern ticketing platforms provide organizers with the ability to manage the size of the service fee. Organizers can set different fees for their events and for different agents, depending on the agreements organizers have with these agents.
Setting a zero service fee
To increase customer loyalty and stimulate sales, organizers can set a zero service fee when working with a professional ticketing platform. In this case, they can cover the cost of platform usage from their own income. This approach helps attract more customers and increase the competitiveness of the event.
Flexibility in management
Professional ticketing platforms offer organizers full flexibility in managing service fees. You can easily adjust the fee size according to their needs and sales strategy. This allows organizers to maximize resource utilization and revenue from events.
How ticket systems make money today
Ticketing systems, building their business based on the backend of a professional ticketing platform, can also choose any business model and change it according to the market and their strategy.
- Some take percentages from both the organizer and earn from the service fee paid by customers.
- Others make bright offers to organizers, stating that the organizer will not pay from their own income, and the ticketing systems will only earn from the service fee paid by customers.
- Still, others work the other way around, gaining loyal customers through a zero service fee for customers and earning on the percentages paid by organizers.
Each chooses their business strategy and can change it depending on market conditions.
Conclusion
Managing service fees when selling tickets is an important tool for anyone who sells tickets. The flexible possibilities of setting the fee allow not only to optimize costs but also to create unique offers for the audience. Understanding and skillful management of the service fee helps attract more customers and increase profits.
However, in addition to compensating for the costs of working with the platform, organizers and ticketing systems can also earn from the service fee. This becomes possible thanks to special features of the ticketing platform. You can adapt the size of the service fee according to market conditions, demand for tickets, and the level of competition. Properly configured service fees can become a significant source of additional income.
In the end, smart use of service fee management capabilities allows not only to increase the efficiency of your business but also to create additional sources of income. Reasonable management of service fees becomes a key element of sales strategy and helps achieve success in the event market.
Marina Bakanova, Co-Founder ArenaSoldOut.com
