2013 Will Be The Year Of Presale Tickets

2013 Will Be The Year Of Presale Tickets

presale tickets

presale tickets

2013 will be the year of presale tickets, more so than ever before. Presales provide an influx of capital well before an event occurs which can be a powerful tool for venue owners and event organizers. If you think your event is too small for a presale, read on to learn the benefits of presale tickets.

Liquidity Event

In 'Managing cash flow in the small firm: what does the academic literature tell us?' Tim Mazzarol cites scholarly work on small business capital strategies that he considers crucial. Mazzarol make three recommendations:

  • First, you should monitor your cash conversion cycle by tracking debtors and creditors and setting measures of how long it should take to receive payment from customers and make payments to suppliers.
  • Second, you should also recognize that cash flow management is an integral part of your firm’s financial system and will impact on its working capital requirements and overall financial performance.
  • Third, there is a potential relationship between the firm’s profitability and its working capital requirement and each firm may have an optimal level of working capital.

As Mazzarol notes, many small business face the challenge of short term liquidity. To date, gaps in capital have been filled by banks with short term liquidity loans. However, after the 2008 economic collapse the cost of short term lending has greatly increased. A common strategy for businesses to raise capital, without borrowing, is to have what is known as a liquidity event.

According to Investopedia, the most common liquidity event is an initial public offering (IPO) which raises much needed working capital, very quickly, at a pre-determined point in time. The IPO's cash influx enables a business to purchase resources, equipment and personnel and doesn't come with a lump sum due date like a bank loan.

For venues, a "liquidity event" is not an IPO, but a ticket presale.

Ticket presales are usually associated with an event that is in very high demand. But 2013 may see that change with presales becoming the norm, with or without the event being in high demand. Why? Three words: Cash on hand. A presale pull in funds in advance of an event and adheres to the Mazzarol recommendations.

Like an IPO, ticket presales occur at a specific point in time and they cause the same rapid influx of cash to purchase equipment or increase event staff. Unlike an IPO, which is offered just once, ticket presale liquidity events can be offered over and over. The savvy venue owner can think of a presale just like a mini IPO, if you will.

Grab The Bull By The Horns


American Express and Citi have been running national TV commercials (above video) for their high profile ticket presale programs. Financial institutions use presale tickets as a member benefit perk, to attract new customers and prevent the "churn" of their highly valued existing customers.

In the specific example of Citi's Private Pass, the program has proven so popular it has been expanded from the original context of music concerts to now include just about any type of ticketed event one can imagine.

The AMEX and Citi presales have a limitation though - sales volume. AMEX and Citi have minimum requirements for events with ticket inventories needing to be in the five and six figure territories for those giant financial institutions to realize the benefits.

Smaller venues and events need not worry about the minimums by taking the bull by the horns and offering their own independent ticket presales. Doing so will garner all the same benefits (raising capital, gauging demand, etc.) but without third party entanglements or minimum ticket inventory requirements.

One such independent effort is the wildly popular multi-cultural festival Burning Man. Known as the Secure Ticket Exchange Program (STEP), Burning Man's presale is a conscious effort to raise capital ahead of the event, quell ticket scalping, and provide the means to gauge demand as early a possible. From the STEP announcement:

[We] are launching the Secure Ticket Exchange Program (STEP) on February 29th to facilitate such transactions. STEP will provide a secure, hassle-free, and centralized tool for selling unused tickets or buying tickets being offered, while helping all of us avoid scammers, scalpers and counterfeiters...Registration will place you in a first-come first-served queue, and you will be offered a ticket when one becomes available through the system. You may only purchase one ticket through STEP; this ticket is non-transferable and can only be held at Will Call.

It is important to note that Burning Man's STEP presale was only just introduced this year and is considered a model for many other independent small and mid-size events. The details of STEP can be reviewed on the Burning Man website should a venue owner wish to use it as a guide track for their presale.

Ancillary Benefits

In addition to the influx of cash, presales have ancillary benefits, including...

Insurance costs - Insurance costs are on the rise for all small businesses, not just venues and events. Safety, security and legal liability evaluations made by insurance companies include on-the-spot observations. Should a long line be formed in front of a venue, it may mean higher rates. Presale tickets reduce, if not eliminate, long lines at the box office.

Capacity and equipment - After a presale, attendance can be estimated and, using the cash on hand, the event's facility and equipment needs can be more accurately planned. If an event is making use of a rented space, the earlier the capacity equipment is known, the less likely of a chance of a bidding war. Commercial property is a highly contested resource. Waiting until the last minute to sign a rental contact may end up costing thousands more than it would have if a presale was conducted weeks in advance. The same reward for shopping early applies to equipment (chairs, public address systems, barcode scanners, etc.). Those services often reward an early commitment with lower prices and a wider array of choices.

Known unknowns - Former Secretary of Defense Donald Rumsfeld was famous for saying "There are known unknowns, things that we now know we don't know." in the context of war. Running a successful event has many unknown factors. The sooner you have a sense of demand, the expected number of guests, the unknowns get easier to manage. The best way to gauge demand is through an orderly presale, especially when the ticketing software you use provides the proper tools to offer presale tickets.

Sophisticated Presale Tickets For Any Event

nightly deposits from presale ticketsThundertix has a suite of tools to use to sell presale tickets including the ability to reward loyal customers with exclusive access and tiered pricing. These sophisticated tools are cost effective and available for any sized venue or event.

In addition to customized presales, we give you access to the presale funds right away with nightly deposits. Combined, these two features make it easy for you to create a "liquidity event" of your own.

What do you think? Will 2013 truly bring about the need for any event, of any size, to start selling tickets in advance. Are there even more important reasons to have a presale than the cash on hand it generates? Let us know in the comments below.