Determining the Optimal Pricing Strategy

Chicago Botanic Garden

Opportunity:

The Chicago Botanic Garden existed as a free admission facility but was interested in determining the financial opportunity and upside that could be gained by implementing a per-person admission fee. Winning the RFP process based on our holistic approach to the engagement, Canopy Strategic Partners (formerly known as The Tenby Group) first conducted an admissions study in 2018 resulting in a favorable financial outcome of additional net income per year. In 2020, the Garden again partnered with Canopy to conduct a reassessment as part of an effort to proceed cautiously and with full due diligence, and to also test new and more specific pricing concepts to determine the likely implementation outcomes. Corollary considerations to the admissions program, including membership fees and benefits; parking prices; and pricing for “up-charged” experiences, were also tested during the reassessment.

Solution:

Canopy’s team facilitated a robust primary market research study querying a large sample of constituents on concepts and prices, the results of which Canopy used to create a dynamic projection model, connecting the research to the changing trajectory of the facility’s operations via any combination of 19 input variables. Canopy also conducted an internal analysis of the Garden’s existing historical operating data and metrics.

The results determined that the optimal strategy was an “all-inclusive” admissions package, which included access to many of the Garden’s guest amenities with the admission fee. Canopy then projected that model across numerous distinct attendance scenarios (ranging from conservative to aggressive), which concluded that the Garden would stand to earn significantly more income over time by implementing any per-person fee, regardless of the amount, especially with continued improvement to the Garden and guest experience. To achieve this financial success, the model depicts an initial dip in attendance, with a rebound to the current level by 2030.

Result:

While numerous projection scenarios were tested, the most likely outcomes resulted in net operating incomes of between about $1 million and $4 million per year above a projected baseline wherein the current status quo pricing paradigm was maintained. In addition to the financial benefit, the work identified additional advantages: a per-person admissions scheme would allow greater flexibility in future pricing strategies, increased ability to capture guest data, greater membership sales opportunities, and enhanced membership value. With the addition of a paid admissions fee and the corresponding free admission benefit for members, there would be an increase to both the perceived and actual values of a Garden membership.

The Garden implemented Canopy’s findings in early 2022, having delayed launch due to the pandemic. To date, financial impact is as projected in the Canopy model, with attendance initially declining, but overall the Garden is on a much healthier financial trajectory.

“Canopy’s response to our RFP stood out because of their holistic, comprehensive approach that no other vendor had thought about. This is why we chose Canopy – they really answered our call in a way no one else did.”

– Harriet Resnick, [former] Vice President Visitor Experience and Business Development

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