Variable Pricing - Increase Revenue While Capturing Data

By Stacey Lucas, Children’s Museum of Atlanta

The Challenge

Children’s Museum of Atlanta, like most organizations with the word “Museum” in their moniker, has a very long history of not collecting data from guests. In general, Museums have fostered a “walk-up” culture, sometimes collecting zip codes but rarely collecting full data sets of their guests. Without accurate data, patrons become a “moment in time” as opposed to a potential return guest, member, or donor. 

Like most organizations with heavy walk-up volume, CMA prototyped several potential solutions including “enter to win” data capture forms and floor surveys. The results showed that these methods were time consuming, parents with young children were not interested in doing “one more thing,” data could not be tied to a specific transaction in the data base, and relying on team members to input hand written data was a morale killer. In short, these tricks were a lot of work and yielded little results.

The Solution – Part 1

Deep down, we all knew the answer to capturing data. We needed guests to order their tickets online so that all data was both captured and tied to a specific transaction. This would call for a huge behavioral shift from our guests. But, with the help of an Audience Building Roundtable grant from The Arthur M. Blank Family Foundation, we saw an opportunity. 

In November 2016, CMA launched FastPass, a way for guests to skip the line and walk directly into the Museum by purchasing tickets online. Connecting the launch of FastPass to the holiday season provided an opportunity to capitalize on a time of year when the Museum was often at capacity. Patrons, both members and non-members, were grateful for the opportunity to walk directly into the Museum without the hassle of waiting in line.

We found, over the first year, that although online purchases increased during the Museum’s peak times (school holidays, rainy weekends, and summer) they decreased during “regular” days when school was in session and the Museum was not at capacity. During that first year, online sales increased 12%. Although pleased with this result, we knew we could do better.

The Solution – Part 2

In December 2017, with the holidays upon us once again, we took a step back to evaluate our challenge. We were beginning to see a shift in guest behavior but knew we had to level up in order to capitalize on our moderate FastPass success.

We knew from our FastPass experience that guests were more likely to purchase tickets online during busy days. FastPass offered a convenience. We began to wonder if that convenience, coupled with the fact that the Museum underwent an extensive renovation less than two years earlier, warranted a different pricing model than the single priced admission model the Museum was currently utilizing. If so, what would that pricing model look like and, in addition to capturing data, could a new pricing model significantly increase ticket revenue?

On December 18, 2017, CMA launched our new Variable Pricing model, which capitalized on the holiday season, a newly renovated museum, and increased, robust programming. 

How It Works

Under the old pricing model, all ticket admission prices regardless of day, time, or whether the purchase was made online or on-site were $15.95. Under the new Variable Pricing model, each day the Museum is open is assigned one of the following price points based on several criteria including past attendance history, school schedules, and special programming or events.

  • A calendar is available online that guests may make their buying decisions at a glance.
  • Buy Online and Save is messaged in all marketing, including direct mail, print, email, radio, and paid social media campaigns. FastPass is still an active program and remains a secondary incentive for purchasing advance tickets online.
  • All discounts are based off of the on-site price. Online discounts have been discontinued.

The Results:

  • Taking what we had learned from FastPass and building on it with a new pricing model has been extremely successful for CMA. Since launching variable pricing on December 18, 2017, we have seen the following results:
    • Online admission transactions have increased 74% over the previous year. 
    • Online admission revenue has increased 70% over the previous year.
    • Traffic has increased on Value Days, attracting price-sensitive parents who are home on the weekdays.
    • As part of the online check out procedure, guests are now asked if they would like to make a donation to the Museum. As a result, online donation transactions have grown by 160% resulting in an 80% increase in donation revenue over the previous year.
    • We have seen a significant spike in Membership sales, both online and on-site during Peak Days. Overall, Membership household purchases tracked 20% higher than same time previous year generating 26% more in membership revenues.
    • We now have data! Our guests and donors are no longer “moments in time” and we are seeing results. Most significantly, the Museum’s multi-buyer rate (guests who make more than one transaction in one year) has increased from less than 1% to 10%.

Lesson Learned

  • Sometimes, you just have to jump. Although theatre companies have been practicing dynamic and variable pricing for years, museums have been slow to implement this structure. We did not have the luxury of relying on many peer organizations for advice and best practices. We had to decide what would work for CMA given our particular resources, structure, and user. Which leads me to our second lesson learned….
  • Cross functional teams get results: Did I mention we took this project from idea to launch in two weeks? This time constraint forced us to pull from the Design Thinking training we received through the Audience Building Round Table workshops. Team members from operations, marketing, and programming worked in sprints in order to meet deadlines and prototype ideas. As a result, we relied on an agile development approach and launched this new pricing model knowing we would need to make adjustments based on user experience. The risk paid off and we launched Peak Pricing at the start of the December holiday season. 
  • Don’t undervalue your product.We learned that our guests, even though they are younger and have small children, are willing to pay for a top-quality experience. We needed to lean in and take advantage of the Museum’s renovation, increased early childhood programming, and exceptional customer service.  Now, if a guest comments that peak day pricing is too high, we look at what we can do better so that the cost of admission is worth every penny.

Next Steps

  • Over the next few months, we will be relaunching our website. Variable pricing has changed how guests interact with our website and we see great opportunity for better telling our story, driving awareness, and maximizing admission, donation, and membership revenues. 
  • We will continue to use data to further adjust our pricing in the months to come. Ultimately, we hope to get to a true real-time dynamic pricing model based on weather reports,  time of day traffic patterns, past data, etc. However, that is a little further down the road. For now, we will build on the progress we have made while continuing to provide meaningful and fun experiences to Atlanta’s families. 
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