Driving increased revenue by integrating price elasticity into pricing decisions for UK Cinema group
Opportunity synopsis
Our client was making pricing decisions without an understanding of elasticity, this created frustration, missed opportunities and an inability to connect action with outcome.
We helped to build a new pricing strategy that integrated the unique industry P&L drivers with film and cinema level elasticity modelling and testing. We also built a bespoke customer cohort prediction model to quickly understand the longer term impact of pricing decisions on customer frequency. Most crucially for long-term value we helped to integrate this new pricing approach into their decision making culture helping them to start recapturing market share.
Maximising profit by integrating price elasticity into pricing decisions
Bespoke pricing modelling and testing
New elasticity based pricing model developed that understood the increased profit generated by volume over value
Complex film demand prediction and cinema level dynamics understood and integrated into pricing strategy
Elasticity tested through deliberate testing to verify and refine
Integrating new pricing process into culture
Supported move from gut → evidence based decision making culture
Developed iterative price testing process to continually refine the model and strategy
Led training for team on new concepts and decision making frameworks
Outcomes
Realised incremental EBITDA within 12m
+7%