In early October, Laura Beussman blogged about demand-based pricing for arts and culture organizations. Her blog talked about several different ways arts and culture organizations could ease into demand-based pricing, including scaling the house, peak load pricing, targeted discounts, and dynamic pricing.
Dynamic pricing was particularly interesting to me.
After all, we’re all used to dynamic pricing when it comes to sporting events, concerts, and airlines. So why is it such a stretch that places like museums and zoos would also use it?
In 2014, the Indianapolis Zoo introduced dynamic pricing.
Curious about their model, I reached out to Dennis Woerner, the director of marketing for the Indianapolis Zoo, and asked him to talk to tell me more about their pricing system. In spring of 2014 the Indianapolis Zoo opened the Simon Skjodt International Orangutan Center. With the opening of the orangutan center, Zoo administrators knew attendance was going to experience a significant increase. In order to preserve their visitor experience, the Zoo had to do something to manage this new volume.
Enter dynamic pricing.
According to Woerner, the decision to move to a dynamic pricing model was years in the making.
They started with their own data.
In 2005 the Zoo opened their newly renovated Dolphin Adventure Dome, causing daily attendance to spike to over 15,000 people on high traffic days. Woerner explained that the Dolphin Dome opening helped establish a threshold for the ideal visitor experience. They learned that when daily Zoo attendance spiked above 11,000 people, visitor satisfaction declined. They also knew that the new Orangutan Center was going to bring more than 100,000 new people into the Zoo.
In order to preserve their visitor experience, the Zoo needed to spread their traffic across the entire week and beyond peak visitor season.
They began to build a dynamic ticketing model.
Woerner met with representatives from sports teams, including the St Louis Cardinals and the Cincinnati Reds, as well as Zoos from around the world to talk about their pricing models. In the end, the Zoo settled on two specific mechanisms with which they could spread out attendance.
- Tickets are less expensive on low traffic days (week days and off-peak season)
- Tickets are less expensive the further in advance you buy them.
Ticket prices are determined using years of attendance-impacting data, including attendance rates and weather data, and change on a daily basis, with a manual price cap set, based on consumer behavior.
They got in front of the issue.
Woerner explained that Zoo administration knew that dynamic pricing was going to impact more than just the ticketing team. Staffing across the Zoo was going to be impacted by this change, so the entire Zoo team was brought together to address issues specific to their areas.
Woerner also knew that in order to get customers to “buy in to” the new Zoo ticketing model, he was going to have to get in front of the issue in the media. New ticketing information was integrated into media around the new Orangutan Center. Education on ticketing was available through social media, websites, traditional media, etc. Everywhere he could talk about ticketing, he did.
Dynamic pricing at the Indianapolis Zoo addressed the critical issue of attendance administrators were hoping to address. However, it also had a couple of unexpected benefits.
According to Woerner, there were three powerful outcomes of their transition to dynamic pricing:
- Zoo attendance shifted to a more balanced distribution between weekends and week days.
- The perceived value of the Zoo membership program increased – member attendance rates jumped from 44% in 2013 to 50% in 2014.
- More consistent staffing opportunities were available at the zoo.
As Zoos and other arts and culture organizations explore dynamic pricing, Woerner has two pieces of advice: understand your customer behavior better than anyone and don’t be afraid to over-communicate. Communication is key.
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