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Developing your mixed economy model
Consultant Colin Mulberg outlines how to maximise earned income while staying true to your principles.
The Covid-19 pandemic and cost of living crisis has brought into sharp relief the need for many museums and heritage venues to maximise their earned income to keep going in the short-term and to build future resilience. The predicted recession means that there will less public investment in the sector, costs will rise, and visitors will certainly make fewer visits overall and spend less when they do.
Yet for many organisations, staff and volunteers, income generation feels like it goes against the grain of their charitable aims and their relationships with local visitors and communities, especially if a visit and much of what they offer is free. Even for places that have a history of charging, there are many audience groups that cannot simply afford to pay, and more people are likely to fall into this category as the cost-of-living crisis bites.
However, it does not have to be all or nothing – charging for everything or not charging for anything. Many venues are adopting a flexible, mixed economy model to still serve their local communities while talking advantage of income opportunities.
In its simplest terms, a mixed economy model looks at charging for some activities while others are given away at a discount or are free, to particular audiences or at specific times. A venue chooses a mix that suits it best and can change the mix when situations change.
A good starting point is to look at your standard visit to define which elements should be included to make it a great, compelling, and attractive offer. This standard offer should deliver good value to a range of audiences.
The next step is to then explore what other elements could add value to a visit, that visitors might be willing to pay for. Some of these may already exist (e.g., special tour; demonstration; family activity) and others may need a new approach – for example, the National Motor Museum at Beaulieu charges extra for special rides in a reconstructed Chitty Chitty Bang Bang car, celebrating the famous film.
In many cases it is possible to make more of things that you are already doing. Zoos are great examples of this, where they advertise animal feeding times – popular with visitors and it happens anyway. You may be able to make more of existing provision, by extending an existing offer to different audiences – for example, a special talk or course with some audiences paying and with some places for other audiences receiving a discounted or free ticket. Or an activity can be repeated with one session paying and other sessions for targeted audiences at reduced rates (e.g., community groups).
Another way to tackle this is to develop enough audience insight to uncover what your audiences are interested in, the types of experiences they are after and in what circumstances (e.g., specialists/enthusiasts; families). You can then determine which offers are attractive to each key audience and will also generate income.
It is helpful to review your offers to visitors with fresh eyes. This could be by using staff or volunteers from different areas or who can ask questions about audiences that are less familiar to them, or by buying in a little outside help. Researching the standard offers and extra value experiences available from nearby and comparable venues may also generate ideas.
There are a range of tools that can be used to promote a mixed economy, including priority booking, targeted discounts, incentives to return (e.g., book an upcoming event) and discounts (e.g. for shop or café). Brighton and Hove Museums are one of many venues to give reduced admission to residents in local postcodes. Allowing Friends/Members to buy lastminute unsold tickets for events at a discount is another possibility.
Flexible ticketing can also help, such as ‘early bird’ or off-season discounts to spread out loading to quieter periods. A Carnet of tickets (e.g., 10 tickets) could be more attractive to some audiences, as they can be used as visitors want, but still encourage repeat visits. This may give some visitors more flexibility than the usual one-off entry or year membership. Carnets can also remove the issue with different family tickets that have fixed combinations of one or two adults and set numbers of children. Introductory offers can be helpful when trying out new visitor offers and building up an audience.
A mixed economy gives venues a way of increasing earned income while still building relationships with priority audiences. If desired, income from one audience can be used to subsidise provision for other audiences. Flexibility is key – a venue is not locked in to always charging or never charging but can target and control where income is earned and used.
Colin Mulberg is Director of Colin Mulberg Consulting, specialising in improving the visitor experience for museums, galleries, and historic properties/sites. Click here to visit Colin Mulberg’s website>>