Boosting Demand in the "experience economy"

Nonprofits have been slow to embrace marketing science, but the success of the Georgia Aquarium shows the potential upside. After huge success following its 2005 opening, attendance dropped precipitously and revenue fell accordingly. All experience-based businesses - aquariums, museums, theme parks, and the like - face this challenge: After an initial rush of traffic, they generally see a decline in attendance as the experience loses its novelty. A marketing analysis revealed that the aquarium relied too heavily on mass media and that a modest increase in overall spending; better targeting of radio, TV, magazine, and outdoor advertising; and a slight decrease in online spending could have a big payoff. All told, the new plan called for a rise in media spending from $2 million (the annual average in 2011 and 2012) to $2.7 million in 2013. That ran counter to the don't spend more money constraint, but the board had enough confidence in the plan to approve the budget. The next question was how to allocate the spending within markets. The new plan was implemented in 2013, and it has already had a dramatic impact: Attendance has climbed by 10%, revenue by 12%, the number of new pass holders by 12%, and pass renewals by 10% over projections based on trends through 2012. In raw numbers, the plan turned a $700,000 increase in media spending into revenue that exceeded predictions by $8 million - a nearly 12-fold return on investment.