By Douglas Young
From Dimensions
November/December 2015
In the 1980s in the United States, the traditional science center business and mission models worked well. Science centers were the most prominent source for informal science learning with financial support from governments and donors and a quasi-monopoly on IMAX films, science store merchandise, and interactive exhibits. A science center’s exhibit department would devise interesting exhibits, and the marketing department simply advertised that content to whatever audience might be interested. From today’s perspective, those were relatively simple times.
Things began to change in the 1990s thanks to two primary forces: escalating competition and growing customer sophistication. In science centers, these forces for change have had the most dramatic impact on the marketing department, which still has to perform traditional functions (e.g., advertising, branding) but also has new functions (Gordon & Perrey, 2015), which I discuss in this article from my perspective as a long-time strategist and trustee of Arizona Science Center, Phoenix.
Forces for change
The first force, competition, has increased dramatically with such sources of informal science learning as Google’s search engine, online education platforms like Khan Academy, on-demand media streaming, apps, podcasts, and educational channels on cable TV. Therefore, science centers have more competition both for visitors and donors. Children and adults interested in educational experiences can also go to enhanced traditional competitors such as children’s museums, zoos, or aquariums. Competition also comes from pure entertainment and sports, which compete for people’s time. As a consequence, consumers now have more choices for spending their time and money than they have had in the past, whether the competition comes from for-profit or nonprofit entities. The second force, growing customer sophistication, is reinforced by the internet, which allows consumers to compare services and prices among the competing alternatives.
The combination of these two forces has shifted power from producers to customers. Because of this shift, I use the word “customer” in this article rather than “visitor” or “audience.” Customers will go to the competitor that best meets their specific needs—including desired pricing, branding, messaging, communication channels, etc. Companies and organizations that try to be “all things to all people” end up not being relevant to anyone.
Science centers must respond to these forces for change by developing an internal understanding of their customers’ perspectives, researching their customers’ needs, and implementing this customer focus across the entire organization. Hence, the marketing department has a new role to play.
Marketing and strategy in the new era
With government funding becoming scarcer and competition for donors more intense, science centers in the United States and elsewhere are increasingly reliant on earned income to sustain operations. The key to success over the next decade will be focusing on new era marketing. The central attributes of this new era include
• Becoming customer-driven. Science centers must transition from being driven by their products—exhibits, traveling exhibits, films, etc.—to being driven by their customers. Although products, when advertised, still draw families with school-age children, science centers often lose these customers as the children become teenagers, thus hurting customer retention. Adults tend to visit a science center when a new exhibition interests them but are less likely to be regular visitors. In effect, the exhibitions (the “product”) choose the customer.
In the new era, science centers must choose their customers first and then find appropriate products. Science centers still need to think about how to make scientific subjects popular, but they also need to take popular subjects and make them scientific. This won’t be hard, because popular subjects such as sports, dating, crime, and even business have all become data-driven and more scientific. For example, professional sports have changed dramatically with teams applying statistical analyses (popularly known as “Moneyball”) to enhance their ability to compete.
• Segmenting the market. Different customers have different needs, such as desired communication channels, messaging, and pricing. The process of segmenting the market to understand these needs usually begins by looking at the current customer base and using data to understand customer behavior. For example, some science center members are donors who want to give money, while others are frequent visitors looking for a substantial discount. It makes no sense to have only one type of membership—one size does not fit all.
Data become important, because a science center’s customer base is complex. It typically includes individuals, corporations, educational institutions, teachers, volunteers, etc. Each of these categories can be divided further: individuals include adults and children; adults might include tourists, grandparents, and students. Furthermore, each of these customers may have different roles. One individual can be a visitor, donor, trustee, and member.
• Choosing which customers to serve. In my experience, customers vary widely in their value to a company or nonprofit. Often, companies have 80% of profits coming from 20% of customers (the Pareto principle). Science centers see this principle in capital fundraising where the rule of thumb is 90% of funding comes from 10% of donors. With visitors to a science center, it will also be true that a smaller proportion of visitors account for the majority of its mission and profitability margin.
Since no entity can be all things to all people, science centers must select which customers to serve—and, more controversially, which ones not to serve. Customer segments that are “low mission–low margin” can be “fired” if their outcomes cannot be improved. In addition to mission and margin, other selection criteria could include loyalty, the ability to bring other visitors, and other ways of contributing to the science center’s mission.
Choosing customers is also critical for a science center’s strategy because they determine which products and services will be offered. The products and services, in turn, shape the center’s mission and margin outcomes. Bringing greater focus can also simplify and improve a science center’s operations; for example, firing customers who don’t serve the mission and are unprofitable will leave more resources to invest in activities that will enhance the mission and/or margin.
• Conducting customer research. Surveys and focus groups are still used to understand customer needs and behavior based on what people say. Data analytics—gathering data and using math and statistics to analyze them—are needed to see what people do. Analytics can also be used for other purposes including finding growth opportunities, refining marketing campaigns, qualifying customers, predicting what donors could contribute, experimenting to optimize different operations, and pricing according to the actions of competitors and changes in consumer behavior. (See Bhandari, Singer, & van der Scheer, 2014.)
• Adding value to your target customers. For science centers, adding value really involves enhancing the mission. Competitors will always target your customers, particularly the best ones. To retain those customers, science centers must strengthen their relationships with them by better meeting their deeper needs—that is, adding value. In my experience, it is very hard to increase value and produce measurable outcomes if customers only interact with a science center once or twice a year. There have to be more opportunities like summer camps, afterschool programs, or teacher training that bring people in on an ongoing basis—a relationship, not just a transaction.
There could also be a career readiness program for middle and high school students to introduce different science, technology, engineering, and math (STEM) careers and then give hands-on classes, take field trips to employers, and facilitate internships. Such a program would likely keep more students involved in STEM, minimize the number of students who graduate from high school but don’t find employment or pursue posts-secondary education, and keep older students and their parents involved in the science center while helping to improve students’ futures. All of that is “adding value” to the individual while improving mission outcomes for the science center.
Science centers can compete effectively for customers in the informal science market. However, they must invest in hardware and software to gather and manage data, and they also need to invest in marketing and analytics expertise. The process can take several years and requires a culture change. As Chevy Humphrey, president and CEO of Arizona Science Center and immediate past chair of ASTC, says, “Science centers have to make this investment in order to compete, but we should view this new era as an opportunity, not a problem. The investment allows science centers to improve their mission model as well as their business model.”
Douglas Young is a strategy consultant in Scottsdale, Arizona. He has been a trustee of Arizona Science Center, Phoenix, for over 30 years and was chairman of the board of trustees from 2010 to 2012. He holds a Master of Arts degree from the University of Oxford and a Master of Business Administration degree from Harvard Business School.
REFERENCES
Bhandari, R., Singer, M., & van der Scheer, H. (2014, June). Using marketing analytics to drive superior growth. McKinsey Insights.
Gordon, J., & Perrey, J. (2015, February). The dawn of marketing’s new golden age. McKinsey Quarterly.
About the image: Visitors learn about the properties of solid, liquid, and gas through liquid nitrogen demonstrations at Arizona Science Center. Photo by Alexis Macklin/Arizona Science Center