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Variable Pricing to Shift Demand and Increase Revenues

One of our local snow ski areas has started offering a “no wait” pass for snow skiers on busy days. The pass costs $20. This $20 comes on top of the normal day pass the skier has purchased. This additional pass allows the skier to avoid lift lines by going through the “ski school” entry. Other ski areas have begun charging substantial fees for “close-in” valet parking, while letting most skiers park for free at a further distance from the lift lines.

This variable pricing both reduces demand pressures on some services and increases revenues. These variable price mechanisms have become much more common over the last few years. We see them in airlines, at hotels, sporting events, movies and plays and other venues.

Now the concept has come to art museums. Some years ago, some of the largest art museums in the country learned that it could charge substantial admission fees for special shows. Now some museums are bringing the variable pricing concept to day-to-day operations. Some museums are considering charging a premium for the first hour of every day and on weekends when demand is greater than at other times. Others have noted that special exhibitions become more crowded as the exhibition comes to its ends. So, these museums are considering increasing prices as the end of the special exhibition nears. Others are considering charging a fee for those museum-goers who purchase their tickets online in order to avoid lines.

Really, not bad ideas when you consider that many of these museums are under severe financial pressures these days due to the poor economy and falling attendance. And, across-the-board price increases are likely to drive even more patrons away. These, and many other pricing concepts, are available to help you develop your new pricing ideas. Please see the many brainstorming pricing ideas at www.strategystreet.com/improve/pricing.

Posted 5/11/09

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