Colleen Dilenschneider and the folks at IMPACTS experience released some more great research last week. This time regarding tolerance for online transaction fees. (subscription required)
High-propensity visitors to cultural organizations will likely tolerate online transaction fees up to $4.95…provided the organization charging this fee has been deemed competent and successful in terms of the guest experience, the online purchase experience, and favorable reputational equities. Critically, these data may be more insightful for market leaders considering implementing transaction fees than for those organizations which could be struggling to meet their audiences’ expectations.
Before you click away having decided that is all you need to know. There is more to consider. Number one, notice they use the term high-propensity visitors which means people who already have an inclination to attend exhibit or performance based experiences. Tolerances can differ for people who have less of an inclination for the experience. The other thing to note is that the organization must have already earned the confidence of audiences in terms of quality of difference experiences and reputation.
There are other factors like perceived value —which they take pains to note is not the same as price. An experience can be viewed as expensive while also being perceived as having high value. Readers may recall a post I made in August where IMPACTS found that free and low cost organizations often receive lower satisfaction score and intent to return responses. So low price does not always result in high satisfaction or perception of value.
Looking at perception of value, willingness to recommend to others, and intent to return, intent to return seems most impacted by online fees followed by perception of value and willingness to recommend.
Overall, intent to return begins to decline at the $3.00 mark, value perceptions begin to decline at the $5.00 mark, and willingness to recommend visiting to a friend starts to decline at the $6.00 mark. Depending on myriad factors concerning content, programming, reputation, the online purchase experience, and broad value perceptions, the ill-advised deployment of a transaction fee may risk a negative impact on an organization’s market potential and its ability to attract guests.
One other thing they called out – labeling additional fees as “convenience fees” elicits increased negative perceptions. Purchasers don’t necessarily see it as convenient for them.
There is a lot more nuanced analysis and cross-refencing to earlier posts they have made in this recent post so it is probably worth taking a closer look if you want to know more.
