Can a Pay As You Stay Pricing Model support your Museum’s re-opening?

 

When museums re-open after the shutdown due to the Covid-19 pandemic, getting back on the public’s agenda seems tbe a priority for all marketing efforts. In many aspects, the public has to be informed about the very basics of your museum practice all over: What’s on show? Has the program changed? Are there new opening hours? How many people are allowed in? What are the restrictions to a visit? Do I have to wear a mouth and nose cover? And so on… 

 

The list of barriers to museum visitss, which we’ve studied in arts managements for the past decades, has not only grown, but weights have shifted, with general access and specific health concerns being a stronger force these days. Possibly, it’s more difficult to get people to the museum since using public transport is not advisable. If a face mask is mandatory, that might repel visitors with respiratory problems.People might fear that social distancing rules are violated if access is not managed properly. And the task does not end there: When entering the museum, visitors will be presented with new house rules, such as keeping distance, restricted use of elevators, stair cases, small spaces and facilities, new signs and directions, disinfectant everywhere, masked staff and many others. Visiting a museum is more complicated now.

 

If we reflect this situation using basic marketing theory, it means it’s important to accept that our >product< (the museum’s selling proposition, the value of a visit), our >promotion< (the ways of attracting and staying in touch with our communities), our >place< (getting people to and through the museum) and our >people< (meaning contact to staff, education programs, access to services) are not quite the same as before. But what about >pricing<?

 

 

The weeks of shutdown have left cash registers empty. Safety measures, digital programming, equipping staff to work from home and many other items are driving operating cost up. At the same time, visitor numbers  - and with it revenue - are probably lower than before.

 

Regarding admission prices, three scenarios appear to be the obvious options: 

 

One of these three options may work for your museum. It seems most plausible to prioritize operations in the first days and weeks of re-opening. Once you feel comfortable running your show(s), and as the situation becomes clearer with time, you can start looking into the pricing options.

 

This is what we do at the Weserburg Museum for Modern Art in Bremen, Germany. For now, prices stay untouched, but we’ve recently been looking into alternative pricing models to serve our audiences. One of them might be on point in this current situation.

 

 

In December 2019 we started testing a novel approach to our museum’s pricing. In this model, which we call "Pay As You Stay”, visitors payed a flexible price resulting from the time spent in the museum instead of a fixed day rate. Visitors hence paid not when entering, but before leaving the museum, turning admission prices into exit prices. The idea of applying this so called per-per-use pricing, known from car sharing services or parking lots, to museums was first published in an academic paper by Bruno S. Frey und Lasse Steiner in 2010. The authors argued that museum visitors would be more satisfied with their visit if a fluid pricing structure would attach the price paid to the time spent. Such a model could also lower the financial and time barriers and allow for short visits. The choice would be in the visitors’ own hands, thus leading to a higher perceived price fairness. Such benefits might be counteracted by the risk of feeling pressed for time, a higher need for explanation at the front desk or a discomfort with the process of paying after the museum experience. 

 

Being convinced of the benefits, the Weserburg, to our knowledge, was the first museum to apply the exit price idea to practice. We installed a "1 Euro per 10 minutes” formula, which resulted from the average time spent at the museum - about 90 minutes, as observed before the experiment - and the regular ticket price of 9 Euros (4,50 Euros for reduced rates). These 9 Euros were set as the threshold price, i.e. visitors could not pay more, regardless of the time spent. This, we believe, was a crucial aspect for visitor satisfaction. Understanding that they could only benefit from the pricing model, visitors happily went along with it and many appreciated the "fresh idea”. The four-week testing phase was accompanied by a visitor survey to learn more about the visitors and their perception of the pricing model. 

 

The results were unexpected: visitation increased by over 40% compared to the already well-visited previous year, revenues were stable despite lower average prices paid, and the visitors’ feedback was nothing but positive. They stayed an average of 17 minutes less than before, driven by an increase in short visits. Many stayed just as long as they normally would, and, to our surprise, almost nobody felt pressed for time. It simply does not seem to be a museum visitor’s logic to haste through an exhibition in order to save money. Visitors rather left when they felt they had gotten their value - possibly opposed to regular pricing days, when they might stay longer than they actually like in order to "fully utilize” the price they’ve already paid. Three out of four confirmed that the model led to a price they perceived as fair. 

 

All in all, the experiment confirmed the theoretical benefits of this pricing approach with empirical findings. It must be stated that the sample was rather small and advent season is a special time. Hence, we started to repeat the experiment in March 2020, but were interrupted after two weeks by the general lockdown in Germany. At the time, there was no special exhibition on show, missing what was a strong motivation for many visitors, as the December survey showed. This second test phase started with promising results: visitation was again significantly higher than in the previous year. Visitors also spent more time in the museum than in December. This led to higher prices paid compared to the first test phase, thus revenues were even about 10% higher than the year before. The number of survey questionnaires collected during those two weeks was rather low, so the results should be interpreted with caution. What became visible, however, was the importance of communicating the experiment. Fewer visitors knew about it compared to December, when press coverage was extraordinary. While every second respondent in December stated that they had heard about the pricing experiment and 10% said it strongly motivated their visit, during the second test only one of three said they knew about "Pay As You Stay”, and hardly anyone said it was the reason for their visit. 

 

 

Flexible pricing models such as "Pay As You Stay” put control over prices into the visitor’s hands, at least partially. But other than in the "Pay As You Wish” model, they cannot detach the price choice from their behavior. This might be a significant, yet so far underestimated benefit of the model in the current situation. If a visitor does not feel comfortable wearing a mouth and nose cover for long, or feels that the museum is too crowded, or prefers not to use the facilities, or any other reason why they might want to keep a visit short, they can leave without the uncomfortable feeling that they’ve not made use of what they’ve paid for. But they will also not leave the museum without revenue. The model also helps if the museum cannot display all of its exhibitions or has to keep certain areas closed - the time-based pricing model regulates this simply by the visitor’s decision to spend just the amount of time they feel suited. 

 

Museums just opening are busy implementing, enforcing, and adapting their safety measures to make a visit is as safe and pleasurable as possible under the current circumstances. But once we’ve got operations under control, we could start trying something new. Let’s keep in mind that in this very phase of slowly returning to pre-corona life (if at all), we are not tackling the usual barriers, but concerns about health and well-being, about enjoying the museum visit despite all the restrictions. A regular day rate price means paying for access to the whole museum for the whole day. That may not be what visitors are looking for at this time. It’s the right time to let them decide how long they enjoy the visit. If prices reflect that, the museum should be sure of their visitors’ satisfaction. 

 

At the Weserburg Museum of Modern Art, we will return to "Pay As You Stay” pricing as soon as operations are running stable. The findings of the first two test rounds provide plenty reasons to do so.