The Silver Lining of Forced Experimentation
How museums can monetize new virtual offerings and grow membership.
Update: You can now register to join the Writer Roundtable with the author of this post, Rosie Siemer. The roundtable is scheduled for Thursday, June 11th at 2pm eastern. We’ll go explore how membership is changing due to the pandemic — What are the opportunities? What are the risks? What strategic questions should cultural organizations be asking today?
While we don’t know how the COVID-19 pandemic will reshape the museum sector, one thing is certain: it will be different.
Some implications of the crisis are already clear. In particular, visitor and member behavior will likely be forever changed. But amid the upheaval and distress, there is a silver lining. The pandemic has presented museums around the world with a rare opportunity: forced experimentation.
Forced experimentation uncovers new opportunities
In my new book, Museum Membership Innovation, I share the story of the 2014 London Underground strike which caused a partial shutdown of the network for 48 hours. In the chaos of the shutdown, commuters were forced to find new routes to get to work. As it turns out, the circumstances of the strike provided an ideal opportunity for researchers at Oxford and Cambridge universities to study the effects of what’s known as “forced experimentation,” or the requirement to make a change due to unexpected circumstances.
During the shutdown, researchers were able to study individual commuters’ behaviors. Remarkably, they found that during the strike, one in 20 commuters discovered a more efficient route to work that they then continued using even after the disruption had ended.
I imagine you can think of a few examples of how your own behavior and habits have changed due to the coronavirus. As museums everywhere adapt to the unprecedented challenges of the pandemic, the potential for new products abounds. Being forced to experiment has exposed new and previously unseen opportunities for museums to connect with, empower, and serve audiences.
Membership models upended
Before March 2020, museums had an established business model for membership. As a crucial source of recurring revenue, membership has long represented a cornerstone of financial support for cultural organizations. But with the core benefits of traditional membership (namely, free admission and events) directly tied to people walking through our doors, what will museum membership programs look like in a post-COVID-19 world?
In response to the pandemic, museums have been quick to develop new digital content and virtual experiences to be able to continue to deliver on their missions while their buildings remained temporarily closed.
Generally, we’ve seen a varied and unscientific approach to pricing these new virtual offerings. Some museums have priced their new virtual offerings equivalent to their in-person programs, some are giving members exclusive or priority access to content as part of their current membership, still others are charging a pay-what-you-wish fee.
But most museums are providing access for free.
Importantly, as museums begin to evaluate the potential for monetizing new virtual offerings, they will need to objectively examine pricing. To quickly generate cash flow, there is a danger in anchoring pricing for new products based on existing products (e.g. tickets or traditional membership). Doing so risks underestimating the value of such experiences for customers and missing an opportunity to maximize revenue over the long-term.
I encourage museum leaders to carefully consider how new virtual offerings may fit into a holistic revenue model that will support your institution’s long-term financial health. As you begin to explore what the future will look like for your institution, the following questions can help to guide your strategy:
- What are the areas where we are seeing especially strong participation from members/non-members?
- Once our doors reopen, will we continue to offer the plethora of virtual experiences and digital content that has allowed us to connect with audiences in new and meaningful ways at home?
- Can virtual offerings help to offset losses from declines in membership and ticket revenue going forward?
- Are we prepared to scale virtual offerings and evolve them into a revenue-generating product all its own?
- Is there an assumption about our membership program that we can test to better understand what tomorrow’s audiences will value?
- Could we package our new virtual offerings in a way that would allow us to upgrade current members with an add-on to their existing membership?
- Is there an opportunity to create a more affordable membership category that would better meet audience needs given the current crisis?
- How do we know what people would be willing to pay for a new virtual offering? (Hint: Never ask customers directly what they would pay for a new product.)
- How will perceptions of “digital is free” affect willingness to pay for virtual content in the future?
- How might we design and market an entirely new membership program that is completely virtual?
Relevant and virtual: Inspiring #museumfromhome examples
A few of my favorite examples of creative one-of-a-kind virtual experiences and digital content include:
- the Denver Botanic Gardens’ introduction of online Therapeutic Thursdays to guide visitors in connecting with plants in everyday life
- the Phoenix Museum of Art live streaming a storytelling of “Hey Mama” celebrating Black mothers just in time for Mother’s Day
- the robust library of educational and fun science activities available at Frost Science@Home, including a collection of DIY Science Toolkits,
- and the San Antonio Zoo’s innovative Drive-Thru Zoo experience that gives audiences a chance to connect with the animals while maintaining safe social distancing measures.
Ways to gauge what to charge (and what people will pay) for membership
Should a museum charge for these new “sorry we’re closed” offerings? The answer to this question is at the heart of the often-overlooked practice of pricing strategy. To be sure, this is a critical moment of opportunity for museums—the chance to define a new product category that does not have a pre-existing price associated with it. However, once prices for these new virtual offerings begin hitting the market, it will be difficult (if not impossible) to raise them. If museum leaders rush to attach prices to new products (or offer them for free) without an intentional strategy, the damage done to long-term revenue will be irreversible.
To develop a sustainable business model, there are a few proven methods museums can use to reveal a customer’s true willingness to pay for a new product.
- In-depth interviews. By positioning the interview as a customer satisfaction survey, an interviewer can explore price-related questions in a way that helps an organization to understand what customers value and gain insights into how to serve them better. An experienced researcher can use in-depth interviewing to uncover those aspects of a product that customers are willing to pay a premium for. By acutely listening for underlying motivations, interviews can inform opportunities for museums to address barriers to participation and better meet audience needs—the things worth paying for.
- Multivariate testing. Using specialized software, multivariate testing allows an organization to validate a hypothesis by testing several variables at once in a real-world setting. For example, a museum could test different options for packaging a set of virtual experiences, including messaging, benefits, call-to-action, and price thereby determining which combination of attributes is most attractive to actual customers.
- Conjoint analysis. Designed to uncover perceived value by simulating the trade-off decisions customers make in the real world, conjoint analysis can aid in new product design and help to optimize pricing by revealing which attributes customers value most.
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From forced experimentation to intentional design
This is a prescient observation that will undoubtedly be true for the museum industry overall as we confront the reality that audiences may never again participate in the same ways that they once did.
What does that mean for the future of membership?
As futurist Jane McGonigal likes to say, we have the potential to “make the future” by asking ourselves “What are the levers that you can push on…and move [the industry] purposefully in the direction that you want?” Today, we have an opportunity to find the upside of this crisis and embrace forced experimentation to intentionally design the membership program of tomorrow.
Let’s get to it!