As we all struggle with revenue shortfalls, many museums are reducing the price of core offerings as an effort to bring in short-term dollars.  Before cutting the price on your core offerings, consider a few fundamental pricing principles in order to maintain your brand and programming long-term value.

In a 2008 Stanford University study, participants were given a number of wine samples.  Before they drank each wine, they were told how much the wine cost retail.  They started with wine that sold for bargain basement prices and gradually went up the ladder to wines sold for hundreds of dollars.  When asked how each wine tasted, the majority of participants said the more expensive wines tasted better.  At the end of the study, each participant was told that every glass of wine was exactly the same. The only variable was the price presented to the participants.  This study, and many like it, demonstrates that our perception of cost is subjective, includes many variables, and is far from logical.

The following is an oversimplification, so I need my neuroscience friends to cut me some slack just this once.  When we are deciding if a purchase is worth the price, a few mental processes occur at once.  The medial prefrontal cortex balances potential gains and losses; the nucleus accumbens creates dopamine if we decide the purchase is beneficial (widely known as the purchasing dopamine rush). The insula registers discomfort if we decide it is a bad purchase.  The insula’s role will also be important in the next section when we talk about discounting.

Your core audience has attached value to the offerings they consume.  After we make purchases, we justify the price we have paid in our minds.  They perceive your current prices as warranted and reasonable for the value they receive.   This perceived value is influenced by the amount they paid for the items (tickets, member programs, events, etc.), similar to how the wine drinkers in the study discussed above.

If you simply decrease the price, you potentially create a few problems.  First, it isn’t easy to increase the price later once you have dropped it.  You may be thinking, ‘our audience will understand because it’s a pandemic.’  While your audience ‘may’ logically understand the necessity of your price cut, they will feel uncomfortable with the cut.  This is where the insula comes back in.  When you cut the price, it triggers a pain response, and they will attach that response to their overall perception of your museum.

Think about how much you paid for your last car.  Once you have this number in mind, think about how you would feel if you saw that car for 30% less a month after purchasing it.  Many of your supporters will have that same ‘punched in the stomach feeling.’  In addition, they will feel like the value of your offering went down with the price.  It’s difficult to recover from this mistake as people feel it emotionally.

It is possible to offer discounts without also devaluing the offering.  The key to effective discounting is in how you structure the discount.  When you change a price, you also have to change the offer terms.  Here are a few examples:

  1. Reframe the offer. For example, instead of decreasing a ticket price by $5, sell two for $50 for a limited time.     By bundling the offer and limiting the offer time, the offer is perceived as special, and people’s perceptions of the value are not impacted.
  2. Offer a special price to a loyal supporter group. For example, “Members Only:  All Museum T-shirts $10 off through January 1st”.  By making the offer unique to a VIP group, people will not perceive it as a value related discount.
  3. Attach discount to an event: For example, “$5 admission in honor of our city’s 100th anniversary – one week only.”
  4. Offer a discount on a specific day: For example, “Tickets $5 every Tuesday in November.”

If you only take away one thing, the most important considerations are time limit.  Regardless how you structure the discount offer, it has to have a definite end, otherwise, it’s not a special, and it’s a new price.

Lastly, we want to take a page out of our fundraising playbooks.  A nonprofit fundraising best practice states, ‘You never discuss hardship in fundraising communication.’  Potential donors want to fund successful organizations, and tend to avoid organizations that may not have a future.  When organizations have attempted to fundraising using hardship language, they almost always see limited results.  The same is true for discounting.  Do not add hardship ‘reason’ language to the offer.   For example, ‘we have put tickets on sale for xyz amount due to the pandemic.’  You don’t need a reason you are doing a special offer.  Go straight to the offer without the additional narrative.

Follow these guidelines when discounting core offerings and you will maintain program value and brand equity while increasing revenue.


Article by Frank Bennett, originally published at

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