In late 2021, Dollar Tree ended over 35 years of offering everything in the store for $1 per item.  Bowing to increase logistic and labor costs, the Fortune 500 firm increased the price of every single item in their stores at all 15,000 locations.  Most items were increased to $1.25.  Since making the price increases, Dollar Tree has been met with outrage from their core audience.

So why does an increase of a quarter make a difference in this case?  Although this is a pretty large price increase by percentage, the issue has nothing to do with money.  It could have been a nickel and the issue would be the same.  The issue is that the entire Dollar Tree brand is based on one consumer promise.  They promised their audience that no matter what, everything in our stores will be a dollar.  When they increased their prices, they broke the central promise that fueled their customer loyalty, and in so doing, they broke a trust.  To their loyal audience, breaking this trust feels like a friend breaking a promise.

As an aside, my first personal experience with this issue came from my wife’s niece.  While talking in the car on a shopping trip, the eight-year-old girl said, “We (my family) do not go to Dollar Tree anymore, it’s not a dollar now.”  Her family had a tradition of taking their kids to Dollar Tree as a family trip.  It wasn’t just the words that came from her mouth, it was the annoyed tone, like an experience that she enjoyed has been taken away from her.

What does this have to do with our museums?  Each one of us has made brand promises to our loyal supporters.  Some are written firmly in our mission statement and communications, some are in our museums experience, and some are more intangible.  Point is, its critically important to understand what your audience perceives as a ‘promise,’ because if you break one, you will feel it in your visitor numbers and your finances.  Have a brainstorm session with your key team members and talk about what promises you have made to your audience.  It’s an important discussion because it informs the bigger picture discussion about who you are, why you matter, and what you provide.

One last note on Dollar Tree, let’s consider some ideas on how Dollar Tree could have avoided their current reality.  It all starts with the language.  First, talk to the loyal customers that keep you in business.  Make them aware that they are important, and you consider them in all of your decisions.  Explain that you need to increase prices on some items, but you care about your long-term loyal customers, and as such, you are going to create a loyalty program.  Then offer them a loyalty program that allows them discount opportunities.  By taking this step, your loyal customers feel appreciated and special, instead of feeling betrayed.  Second, don’t increase prices across the board.  Increase the prices on a fraction of items more than .25 and balance that out by keeping many other highly visible items at $1.00.  Within the items kept at a $1.00 should be at least a handful of high volume ‘comfort’ items that everyone buys.  They essentially become lost leaders, but ultimately, they keep people coming in the store.  Having half the items in your cart cost a dollar as they always have and the other half cost $1.50 is a completely different emotional experience than having the price of every single item increase. *

Back to museums, it’s important to understand the promises you are making to your loyal supporters.  Avoid the mistake Dollar Tree made by focusing on this important brand element.

*If you want to learn more about why this is true, Google behavioral psychology, pricing theory.

 Article by Museum Consultant, Frank Bennett.  Originally published at