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I read an article in our local Dutch newspaper (NRC) today about ‘Work no. 850′ by the artist Martin Creed in the Tate Britain. Every 30 seconds a single runner will sprint the length of the empty Duveen Galleries. This performance/exhibition started on the 1st of July and it the English media gave a lot of coverage about. (The news of this artwork reached the continent by Carrier pigeons today so now I can blog about it). But whatever you think of this artwork one thing struck me that there is a special website where you can apply to run, or in other words, to be part of this work of art.

From a marketing view I think it is rather brilliant. First this artwork is very controversial, a lot of free publicity guaranteed. Secondly this is really reaching out to your Audience. No more passive art consumption, everyone has a chance to be a part of this collaborative artwork. I think for most runners this work of art is a memory they would not easily forget. In this way it enhances the bond someone has with this museum.

For more information watch this Youtube clip from artreview.com.

N.B.: People get paid to run. I wonder if they would have managed without paying. Or maybe even the other way around. Let people pay to run.

In the beginning of 2008 the Tropenmuseum participated in a coupon action with ETOS one of the biggest drugstore companies in the Netherlands. For every 15 euro’s spend at ETOS you would get a coupon. With this coupon the second ticket at several theme parks (and a museum) would be free of charge. In three weeks there were 450.000 coupons distributed to customers of ETOS. Eventually several hundred spend there coupon at the Tropenmuseum.

Almost every week I am called by a company, or a PR company who is representing that company, if want to participate in a coupon action. Most of the time a company is searching for a nice offering for their customers. No money is exchanged between us and the company who offer the coupons. It is a so called barter deal. The benefit for us is extra exposure to that specific customer base. I turn down a lot of requests to participate. I have made some criteria to consider when asked to participate in coupon action:

1. Brand strength of the company handing out the Coupons. Can this brand lift your own brand up or bring your brand down? Participating in a coupon action with a mom and pop store is probably not a good idea.
2. Products/services the company offers. Heineken is a strong brand, but would we do coupons targeted at children if they would ask us?
3. Reach of the coupon action. What is the size of the audience for this coupon action.
4. Targetgroup. Is the target group extending beyond your normal customer base?
5. Other companies who are joining in. If the coupon is valid for several other museums, theme parks or any other leisure activity are they on the same brand/value level as you.
6. Can our staff handle anymore actions. All those coupons have to be checked at the cashier. To many actions drives them wild.
7. Action conditions. Is it a small discount (20%) or a huge one (second ticket for free)

When you choose to participate I have also made a practical checklist to use when the coupons are designed. These items on this checklist are not always needed but choose wisely when you don’t put them on the coupon.

1. Logo of your museum
2. Picture of the museum/exhibition/event?
3. Address
4. Opening times
5. Barcode/Action code
6. End date of the action
7. Action conditions

A final tip: Always approve the final design of the coupon.

This is part 3 about the optimum entrance fee. This post elaborates on my previous posts about the optimum entrance fee. A lot of you probably know the basics of Price elasticity. And even if you don’t know anything about it you experience your own price elasticity a lot of times.

A perfect everyday example is the rising worldwide gas prices. A few days ago I bought a (big) Volvo. I went to the petrol station to fill up my car. When the car was filled up I went to cashier. I was in a shock when I heard the amount I had to pay. It was 74 euro’s (108 us dollars) for about 47 liters (12 gallons) of gasoline. Next time when I take the car I will think twice about it. Those high gas prices make me reconsider using my car. This approximately how basic price elasticity (of demand) works.

‘A certain percentage change in the price of a product/service changes a certain percentage of the demand for that product/service.’

The elasticity depends of course on the offered product. I am reconsidering buying gas for my car but would I ever reconsider buying drinking water…even if the price gets sky high? Probably not, water is a basic need and without I will die. How does this work with Museums? According to this article by Frey and Meier a raise in admittance fee doesn’t effect the admittance very much. Actually research suggests that a raise of 10% only suppresses demand with 2% (the elasticity is 0,2). The demand for museums is inelastic. The opposite of inelastic demand is elastic demand. The demand for a good is relatively elastic when the quantity demanded does change much with the price change. An example could be a luxurious product like a Shirt with a small crocodile on it. When they raise their prices with 10%, demand could for example drop with 15%. The elasticity of this product is 1,5. This means:

- Inelastic demand; Elasticity has a value between 0 and 1.
- Elastic demand; Elasticity has a value between 1 and infinity.

How would this work out for a museum. A museum in Amsterdam has an entrance fee of 8 euro’s (for this case there are no special prices or discounts). They have 100.000 visitors a year. Management of the museum is short on cash. The president of the museum wants build a new exhibition hall and needs extra money to finance it. The president gives the marketeer director the assignment to set the entrance fee at their optimum revenue level. His exact words were “Show me the money!”. The marketing director of this museum knows about inelasticity of 0,2 of museum admittance prices. He takes out his excel spreadsheet and comes up with the table and chart underneath. To get the highest revenue the museum should set it’s price at 24 euro’s. Attendance will drop by 40.000 to 60.000 a year.

Is it that simple? Just raise your prices until you get the highest revenue. Actually it is not that simple. Price elasticity is determined by several factors.

Frey and Meier wrote in their paper that: ‘Zoos, science museums and natural history museums show the largest price sensitivity (compared to art museums), probably due to stronger competition from other leisure pursuits.’ What thy are saying is that price elasticity depends on substitutes. A museum can set his price as high as it wants. But museum visitors will compare the prices with other leisure activities like going to the cinema or going to an amusement park. If a museum sets a relative higher price than those activities, visitors attendance will decline progressively. And it also works the other way around. A low admittance fee will also raise attendance progressively.

Time is a factor that influences price elasticity. People remember old prices better when the prices are just raised. So raising prices too much will make visitors stay away because of the big difference between the old price and the new price.

Another factor is income: someone with a low income will respond more drastically when a price changes then someone with a high income. Most of the museum visitors have high incomes so a price change will not influence their demand very much. To help low incomes attending a museum most museums differentiate their prices between high and low income (f.e. student passes).

And finally, permanent or temporary price change: a one-day sale will result in a different response than a permanent price decrease of the same magnitude.

I want to end with some concluding remarks. Price elasticity is an important factor in setting the right price. If a museum management is very keen on raising revenues they should raise their entrance fees every year a bit. The demand for museums is very inelastic and most of the museum consumers have high incomes. But while setting the price they should consider substitutes and offer a good solution to low incomes.

Other Sources:
- wikipedia price elasticity of demand
- about.com price elasticity of demand
- Net MBA business knowledge center

After writing my blog article on star appeal that was finished at 23.39 I went to bed for some good night sleep. Right before my eyes shut down totally I was thinking about my article and saw that I mixed up some things. My conclusion was that not all celebrities are equal in the museum world. There are two possible ways to measure celebrity appeal. The first way is the image of the star: is he well known? Does he have a positive or interesting angle to offer to the exhibition? Is his brand name so well known that this immediately means the exhibition has to be good or interesting? The other way is artistic value. Artistic value means that the artifacts or collection associated with this person are esthetically or historically appealing.

While considering this I came up with a star appeal matrix loosely inspired by the bcg matrix. This star appeal matrix has two axes. The first axis is the strength of the image of the person. The second axis is the artistic value of the artifacts which are linked to that person. As you can see below some of the dots are already filled in. The chart has four quadrants.

- Mice, this is the lower left quadrant. In this quadrant you will find the nobodies or artistic wannabe’s. The have a lack of any artistic or pr value
- Question marks, this is upper left quadrant. In this quadrant you will find artists with high artistic value. They are very good at what they do but are not a household brand. They can probably grow into stars but with bad luck return to mice.
- PR kings, this is the lower right quadrant. In this quadrant you will find artists with a lot of PR/marketing value. The artists are well known brand but lack artistic value for the museum.
- Stars, this is the quadrant in the upper right corner. If you can make an exhibition with objects who are related too, uses by or made by these persons you have a blockbuster exhibition.

No relevant science is used in determining the spot of the persons in this chart. I just made up the numbers to give an example. But I think it is possible to make a chart like this. It could for example be useful in choosing for a certain exhibition. Do you want for example to make an overview of the work of Madonna (the singer) in your museum? It will give you a lot of PR but the risk is your museum will be taken less seriously. Or do you want to show the bright young and upcoming artist who nobody knows. This matrix could probably also be used for themes instead of persons.

Links about the question marks in the chart:
Khosrow Hassanzadeh
Rogerio Reis

In one of my previous posts I talked about ‘art matters‘. I explained that the content of the exhibition is one of the factors to consider when setting the admittance price. Actually the three examples I used can be determined as blockbusters. It were ‘King Tut’, ‘Bodies the exhibition” and ‘Rembrandt Caravaggio’. What at least two of those three exhibitions have in common is star appeal: King Tut and Rembrandt & Caravaggio.

At the Tropenmuseum we had two exhibitions at the same time that had a big amount of star appeal. We had an exhibition about beads called ‘Beauty and the Bead’ and an exhibition about Che Guevara called ‘Che, a commercial revolution’. At first sight beads don’t have any star appeal (when first hearing about the exhibition it sounded rather boring to me…I instantly got an image of grey ladies making awful beaded necklaces). But what gave them star appeal were the garments with beads that were worn by recent stars. The exhibition had garments worn by such celebrities as Diana Ross, Madonna, Grace Kelly and Marilyn Monroe.

I probably don’t have to explain the star appeal of Che Guevara. It is one of the most famous icons/symbols about revolution in the world. The exhibition about Che Guevara generated a lot of free publicity. When the exhibition opened almost all the press writing about arts in the Netherlands had an article about it. The year 2007 when those two exhibitions were on display Tropenmuseum had a record attendance. It was the best attendance in the last 10 years.

I am always amazed about how these kinds of things work. Why do people want to see clothes of a celebrity? I once had lecture about this subject. The professor told us that one of the main reasons people want to be near a star (groupies/fans) or for example cherish an autograph is that a bit of that stardom becomes a part of their identity. I can show my ‘Johan Cruyff’ autograph to my friends and a part of me becomes Johan Cruyff. Mainly also because my European friends will respond in an enthusiastic way: “You are so Cool, you have an autograph of Johan Cruyff”. Telling you I have seen a dress worn by Marilyn Monroe…makes me Marilyn Monroe.

It can also work the opposite way. A rather famous example is ‘the man with the golden helmet’ by Rembrandt van Rijn. I saw a documentary once (I forget the name of it) which showed how in sixties and seventies this painting was the centerpiece of the Gemäldegalerie In Berlin. Like the ‘Mona Lisa’ is for the Louvre or the ‘Night Watch’ for the Rijksmuseum. It even had a separate room where people could watch and admire it. In 1985 it was discovered that the painting was not by Rembrandt. Immediately the painting lost all its (star) appeal. And now it is hanging sadly in the corner of museum. Did the painting at all change? No it didn’t but yes it did. I had lost its meaning, its emotional attachment. In this Time article from 1985 you can read how shocked this columnist was.

So having an exhibition with some or all of the artifacts who can be linked to a star appeal makes it probably more successful. You can go for a household brand like Rembrandt or Picasso or for some lesser gods. But are Museums also capable of making stars?

I have not researched that thoroughly but my Intuitions says they probably can. Of course this depends also a bit of the star power of the Museum itself. If the MoMA would decide to make an exhibition of some obscure but modestly talented painter I think his star will rise (sky) high. But even for a less famous museum this is a possible. A museum is supposed to be the one with knowledge about GREAT ART and BAD ART. Most of the people who visit a museum are not art historians. They are just plain museum consumers who want to be surprised. So if a museum can present them with a talented artists and also let the whole world know he is the hottest artist in Town maybe the museum can pull it of.