Data & Analysis
Here’s what this means and why it matters for cultural organizations…
There are a whole host of reasons why cultural professionals seem to put their fingers in their ears whenever realities surrounding admission pricing come up. From what I can tell, these reasons seem to have something to do with personal values, unproven beliefs, and – perhaps more often than we’d like to admit – inertia.
After all, if we admit that admission price is not a primary barrier to visitation to cultural organizations, then it means facing down even more daunting data-informed, actual barriers. Those beasts – like establishing content relevance, reconsidering opening hours, and getting smarter about special programs and exhibits – can seem big and nasty.
Even though data suggest that the market may value them less and visit less often if they were all free, even I sometimes wish that I could enjoy cultural organizations and the hard work of passionate professionals without charge! The thing is: Free admission is not a cure-all for engagement, even when it is financially viable for an organization.
In the most successful organizations with which IMPACTS works, effective admission pricing enables affordable access programs for underserved audiences that actually work. Very often, charging a data-informed admission price doesn’t make organizations less accessible. It makes them more accessible.
Sometimes when I write about admission pricing – or cite studies or famous ideas related to behavioral economics or pricing psychology – I get angry letters. And I get it. While I understand the potential intellectual merit of the conversation, it’s so much easier to “I think” how cultural organizations should theoretically operate in fantasyland than it is to actually keep them solvent and sustainable.
My job, folks, is the latter.
And on that note, let’s embrace that lovely and well-established link between economics and psychology and talk about price recall.
Researchers have long identified consumers’ lack of knowledge of prices with studies indicating that less than half of consumers are able to accurately recall prices for goods purchased on a regular basis. There is no reason to believe that the experiential marketplace – including visitor-serving enterprise – should be exempt from this economic research.
“Consumers don’t think how they feel. They don’t say what they think and they don’t do what they say.” – David Ogilvy
This quote is at the heart of behavioral economics, and also at the heart of the curious, nerdy work that we do at IMPACTS. Simply put, we humans tend to be biased and unaware of it, and it’s a bit of work to get to the bottom of how people really think and behave.
IMPACTS collected data from recent adult attendees to 44 visitor-serving organizations in the US (i.e. museums, zoos, aquariums, performing arts organizations, botanic gardens, and historic sites). The organizations represented in the study spanned the US, and included a representative range of adult admission prices – including those with free admission.
1) Only half of recent visitors to cultural organizations accurately remember admission cost
Overall, 56.0% of adult visitors attending within the last three months were able to accurately recall the price that they paid for their ticket. For those who really did pay any admission price at all, only 53.4% had accurate recall.
“Accurate recall” need not be to the penny. In this study, rounding up or down to the nearest dollar counted as accurate recall. The goal was straightforward: Uncover the percentage of visitors that accurately recall the admission price that they paid, and assess the related findings.
While things can be considered more or less affordable, data suggest that after about $10, “affordability” becomes binary. In other words, something is generally considered to be affordable or unaffordable with little perceptual nuance. This is an important takeaway for organizations that find that their data-driven price point is, say, $20 and decide to instead charge $15 “to reach more people.” This kind of approach may simply leave money on the table.
Yes, 21.7% of people who attended free organizations don’t remember that they didn’t pay anything. This means that they – in essence – “made up” that they paid something. This finding may sound ridiculous if you’re unfamiliar with behavioral economics, and rather unsurprising if you are. The mind is an incredible, powerful thing. It’s important not to discount this finding; visitor perception is visitor reality. These perceptions are what make their way into word of mouth endorsements, and they play an important role in driving the visitation cycle.
But it does go to show that we humans are not reliable narrators of our own experiences, and it may be especially beneficially for cultural organizations to keep this in mind when they think about admission pricing.
2) Those who have a terrific experience have similar price recall to those who have a terrible experience
Let’s first look at how visitor satisfaction correlates with price recall accuracy. After all, one might guess that a person who had a great time might be more likely to accurately remember the organization’s admission price. Similarly, a person who had a terrible time might remember the admission price point more accurately.
And what do you know? Visitor satisfaction doesn’t correlate much with price recall accuracy. In fact, people who had a terrific experience (overall satisfaction ranging 80-100) were about as likely to be accurate in their price recall as those who had a terrible experience (overall satisfaction <40).
Let’s take this a step further. How much does value for cost influence cost recall? In other words, how much does the amount of value that someone believes that they got as bang for their buck correlate with recall accuracy?
We might again guess that those with higher value for cost perceptions may more accurately remember admission price. (“What a great deal for the amount that I paid!”) Moreover, a person with low value for cost perceptions may be likely to accurately recall price. (“What a terrible value for the cost!”) After all, this metric connects actual cost with the perceived value for the cost!
People who believed they got a great bang for their buck (value for cost ranging 80-100) were about as likely to be accurate in their price recall as those who felt ripped off (value for cost <40).
Neither overall satisfaction nor value for cost perceptions significantly influenced the accuracy of the price recall rate. Just because somebody had a particularly great or terrible time – or believes that they had a great or terrible time relative to the admission price they paid – doesn’t mean that they are much more likely to be accurate in recalling the price that they paid.
3) Regardless of reported satisfaction, people recall paying less than actual cost
Now, this is interesting: Those people with an inaccurate recall of the price that they paid generally recalled a price that was lower than the actual paid price. Indeed, overall, people inaccurately recall a price that is only 90.0% of the actual price that they paid. And this is true across the board for satisfaction level!
That’s worth repeating: People who did not accurately recall admission price generally believe that they paid a lower price than they actually paid.
It’s lower. Not higher.
Here’s how to read this chart. Let’s say, for example, that an organization’s actual price point was $30. (This is only an example. As a reminder, the 44 organizations represented in the study had a range of price points.) Those who had an unsatisfying experience (i.e overall satisfaction <40) recalled paying – on average – only $25.68 (or, 85.6% of the actual $30 price). Those who had excellent experiences (indicated by overall satisfaction ranging from 80-100) recalled paying $25.05 (or, 83.5% of the actual $30 price).
Are these differences astounding to you? No, probably not. But the point is important: Visitors are generally bad at accurately recalling the admission price that they actually paid. And they generally report having paid less than they truly paid.
Despite being a known phenomenon in other consumer areas, there are two reasons why price recall data may surprise cultural leaders:
A) Myth: Seek primarily to be worth a potential attendees’ money.
The reality? Visitor-serving entities benefit by primarily seeking to be worthy of potential attendees’ time. Time is more important than money for likely visitors and the US composite market alike. (Yes, folks. Even lower-income persons who profile as unlikely visitors to cultural entities value their time more than their money. I’m not sure where alternative assumptions arise, except that they seem popular in some conversations.)
Not only that, the primary reasons why those with reported interest in visiting organization still do not attend all revolve around time, not money. Time is limited and precious. Once given, it cannot be reimbursed in the same way as money.
This misunderstanding – that money is a bigger barrier to visitation than time – may be at the very heart of engagement problems confronting a host of cultural organization types.
B) “It’s too expensive” is a lazy thinker’s blame game
While cultural leaders are arguably among the least lazy category of folks with whom I’ve had the honor to interact, we really seem to love this blame game.
The problem with the “It’s too expensive” phrase is that it’s both the lazy survey respondent’s answer, and the lazy cultural professional’s excuse. When we turn a blind eye to pricing psychology and economics, “because of admission price” is a safe place to hide from bigger issues facing the industry.
It’s the lazy survey respondent’s answer: If you ask people why they didn’t do something, “it’s too expensive” is an easy answer. And it’s perhaps the best answer when you’re asking them why they didn’t do something like visit a cultural organization (which data suggest provides education value that is believed to make themselves and especially their children better people). It’s a socially acceptable answer to a question that can be confrontational. Who wants to imply that they don’t want the best for their kids, or they never liked Mozart, or they just think fossils are boring? Who wants to explain the nuances of their holiday schedule, say they’d rather be at the park, or blame the traffic on I-94? These matters are often far more complex and require precious time to consider – it’s simply easier to cite a cost concern and move on.
To get a clearer picture of actual barriers, fill in the sentence “Too expensive for…” It’s too expensive for…what? For spending an hour in rush hour traffic? For taking the day off of work? For missing dinner with your kids? For doing something that just doesn’t interest you?
Fill in the sentence to overcome response inertia and uncover other barriers to visitation.
It’s the lazy professional’s excuse for lack of critical thinking: While “If you build it, they will come” is a great movie quote, it doesn’t apply to the solvency of real-life cultural organizations. And if we’re honest, any organization that has put on a free event or program and suffered limited attendance already knows this hard reality.
Admission price is not a primary barrier to engagement among likely attendees to visitor-serving organizations. But it certainly can be a convenient distraction from the more pressing (and daunting!) barriers to visitation such as lack of content interest, shifting a traditional internal culture to better match today’s audience expectations, or a pattern of unwise investments.
Despite being priced just as favorably when compared to other leisure activities, cultural organizations seem to be ultra sensitive in their hearing when it comes to pricing. But, just because people talk about pricing doesn’t mean that it’s proportionately influencing their behaviors or perceptions. Consider instead: People often talk about pricing – regardless of their value for cost perceptions and overall satisfaction levels. And, when they do talk about pricing, about half of the time they get it wrong!
It’s tricky. Cultural organizations are generally trying to become more data-informed entities that consider market research and the expectations of their visitors, members, and donors. And, yet, there seems to be a different approach when it comes to admission pricing and creating effective access opportunities.
To run impactful cultural organizations, we may need to do better than simply asking our audiences about things and taking them at face-value. Success isn’t simply asking your audience. It’s knowing your audience – and, in some cases – knowing them better than they know themselves in order to influence behaviors that benefit our organizations and strengthen our communities.
