Your Museum, Pricing, Value, and the Price of a Sandwich
Regardless of where you are located, how busy you may be, or what goals you are attempting to achieve, you won’t get there by continually discounting. First, you won’t win a price war against all the other attractions in your area, and you will run out of money attempting to do so. Second, the idea of sustainability is diametrically counter to the concept of discounting. It’s a battle that doesn’t have a winner as everyone ends up not making enough money. Third, and most importantly, the way we tell our story determines the value of our offerings. Instead of discounting, get better at telling your story, and people will pay the price you are asking without hesitation.
All price perception, regardless of product or service, is based on context. People will perceive the value of your experience based on both the price you charge and how you communicate its value. If you are continually discounting, it will lower the perceived value of your experience. If your museum was a high value, in-demand service, you would not be discounting. What would you think of Disney World if their advertisements were discount-driven instead of value-driven?
If you have spent time in any of the commodity-driven industries, you will see first hand how much value is all in the prospect’s mind. In cosmetics, there are lipsticks sold for over $50 that have the same ingredients as others that sell for $3. Often they are produced in the same manufacturing plants. The only difference is the brand and labeling it’s sold under. Many generic canned foods are processed in the same manufacturing plants as their much more expensive branded counterparts. Lobster was considered ‘the poor man’s dinner’ until the 1880s, now we pay a premium for it. This is true in literally hundreds of industries and products.
In 2008, in a research project published in the Journal Proceedings of the National Academy of Sciences, researchers presented a variety of wines to a group of testers informing the testers of the price of each wine. The wines ranged from $5 to $90 per bottle. As the price of the wine increased, the group said they enjoyed the wine more. They even did an fMRI brain scan, which showed higher spikes in the pleasure centers of the brain when they drank the higher-priced wines. The only thing is, the wine inside the bottles was the same. The difference was in the perception of the product base on price and presentation.
Back to museums, it’s easy when we are struggling to decide to lower prices, instead, improve your messaging and brand story. Treat the beautiful exhibits and programs within your walls with the respect they deserve and put yourself on the way to long-term higher profits. Determine your value, and then communicate your story like you are exceptional. Keep in mind, you are offering experiences that, if done well, will make a lasting impact on people’s lives. That should cost more than the sandwich they purchased for lunch.
A lot of the way we talk about ourselves starts with our perceptions. Think about some of the most respected brands you follow. The reason we respect these brands is because of how they present their story. Much like the wine, we value these brands because they value themselves. Think about the Louvre, The Guggenheim, and Chicago Museum of Art in the museum space. Outside of the museum space, there are many great examples. Why is Augusta National Golf Course so exclusive when there are thousands of golf courses. How did a horse race track in Northern Kentucky become a global brand? What about the Summer Olympics? Pay attention to how they tell their stories, and you will understand why we perceive them as premium brands. You will never see any of the discount.
Citing: Hilke, Plassmann, John O’ Doherty, Ba ba Shiv, and Antonio Rangel, “Marketing Actions Can Modulate Neural Representations of Experienced Pleasantness. Proceedings of The National Academy of Sciences 105, no.3 (Jan. 2008): 1050-54
Article by Frank Bennett
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