Pricing decoys across theme parks & visitor attractions

The brief

Merlin Entertainments Group are the world’s 2nd largest visitor attractions operator after Disney, with 105 attractions receiving over 60m visitors each year. Operating across four continents including theme parks (including Alton Towers, Thorpe Park, Chessington, Heidepark Germany, Gardaland Italy), plus six LEGOLAND parks, eight resort hotels, The London Eye, The Sydney Eye, Madame Tussauds, Dungeons, Sealife and others.

The ‘Merlin Annual Pass’ offers access to all Merlin Attractions in a market for a whole year for a single price. Historically passes were promoted as a way to save money on full ticket prices, acting like a savings scheme.

But passes were being used more and more by passholder customers. Average ‘yield per usage’ was below the average yield from other visitors to attractions, holding back revenue growth and making attractions feel ambivalent about passholder visitors.

So Merlin needed to change the dynamic to make the product more commercially worthwhile.

Strategy

Passholder customer research told us that passes were highly valued, with high satisfaction scores and very high value for money scores. Passholders felt that they had a connection with Merlin, acting like a community particularly through social media – praising and advocating Merlin and the attractions.

So our strategy proposal was to reposition Merlin Annual Passes as premium products, adding value alongside their core benefit of savings on full ticket prices. We set out to add value through adding rational benefits such as discounted ‘on-park’ secondary products, and through adding emotional benefits to encourage a sense of affiliation with Merlin. A sense of belonging to something without calling it membership.

Actions

We replanned pass products as a basic ‘Standard’ product, an upmarket ‘Premium’ product, and a new VIP product at a high pricepoint.

In pricing psychology, this makes use of Good-Better-Best together with Goldilocks pricing. Plus it applies both high pricepoint and low pricepoint anchors, with the high pricepoint in particular acting as a decoy; and it draws on Extremeness aversion to favour the Premium pass ‘middle product’.

Plus we invested in new ‘Privilege packs’ for Premium and VIP passholders which gave them added value benefits such as discounted upsells, together with emotional benefits including a sense of exclusivity and of being affiliated to Merlin. Plus we upweighted the role for passholder events such as previews and passholder exclusives.

The big difference

By the end of year 1 we’d returned +12% growth in pass sales volume and +17% growth in revenue. By part way through year 2 we delivered further growth of +20% year on year, driven by +23% growth in average yield per pass.

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