Standing Room Only 2nd Edition

Onsite Insights

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Typically, arts organizations are encouraged to focus on annual goal setting and longer-term strategic planning. Although long range planning is always crucial to set the course for the organization, during uncertain times it is also wise to set monthly or quarterly goals and develop plans and tactics accordingly. In this way, managers are poised to be both proactive and reactive to rapid environmental changes.

Nonprofit performing arts organizations across the U.S. have been facing a trend for several years of decreasing subscriptions. This is largely a function of consumer preferences, although many savvy marketers are effectively building back their subscriber base.

There has long been an assumption in the arts marketing field that single ticket buyers will eventually become subscribers. In my research I have found the opposite to be frequently the case. For example, at one major U.S. orchestra, forty seven percent of single ticket buyers have been purchasing single tickets on a regular basis for eight years or longer. These people enjoy selecting which programs to attend and making their purchase decision far more “spontaneously” than subscribers who schedule concerts up to a year in advance.

I advocate that arts marketers anticipate and respond to the needs and interests of single ticket buyers. This involves such tactics as letting the public know that tickets, (even good seats!), are often available on short notice and permitting ticket exchange for a small fee. Those who have done so—and advertised in their promotional material that tickets can be exchanged for another performance—have achieved significant success without any negative implications on the loyalty of the subscriber base, as many managers fear.

Since the advent of high technology, marketing to single ticket buyers is much less expensive than ever before. The biggest challenge for marketers is engaging new patrons and getting them to come back after their first visit, as 80 percent of first time attenders never return. Marketers must learn how to develop relationships with their audience members, to learn what they need and value, and to focus on methods for bringing people back into their halls.

Many organizations have learned to compensate for the loss in subscribers by attracting single ticket buyers. It is much more challenging to sell tickets multiple times a season that to sell a subscription all at once, but this is the reality that marketers face in the current environment and for the foreseeable future.

Please see Standing Room Only: second edition for extensive discussions on this topic.

Other than subscribers, who purchase tickets for the season well in advance, more than half of arts consumers typically plan their live performance attendance within 10 days of the event, and three quarters typically plan within several weeks of the event. Arts consumers who are single are 30% more likely than their married counterparts to plan late (i.e. within a week of the event).

Source: National Arts Consumer Segmentation Study, 2001, Audience Insight, LLC.

As subscriptions decline and single ticket purchases become more attractive for an ever-growing segment of the population, it is necessary for arts marketers to design offers that appeal to the infrequent, last minute ticket buyer. Although arts marketers prefer selling tickets well in advance, the reality is that they must capitalize on the preferences of potential ticket buyers or they will lose the sales all together. Too often, marketers rely on discounted price strategies to lure ticket buyers. (Many strategies for accomplishing this can be found in Standing Room Only: second edition).

Here is one of my favorite examples of great customer service.

A long-standing subscriber to the North Carolina Blumenthal Performing Arts Center in Charlotte ordered eight tickets to a performance as part of her special birthday celebration. When her family arrived at the theater, other people were sitting in several of “her” seats. Unfortunately, the seats had been double sold – one set through the box office; the other set through Ticketmaster. Since it was impossible, just before the curtain was rising, to determine which set of tickets had been sold first, management decided to follow squatters’ rights, and allow the people who arrived first to retain their seats. The woman’s family members were placed in equally good seats, but scattered throughout the hall in pairs.

Two days later, Judith Allen, president of the Center, received a letter from the woman saying that her birthday celebration was ruined when her family had to be split up in seats around the hall. As a result of her great disappointment, the woman was canceling her subscription and writing a letter of complaint to the editor of the local newspaper.

In response, Judith Allen sent the woman a bouquet of flowers accompanied by a note acknowledging that although she couldn’t recreate the woman’s birthday celebration, she would like to offer her eight seats together for another production in the near future. Enclosed with the woman’s appreciative acceptance of this offer was her subscription renewal for the following season. When the family arrived for the performance, a staff member met them at the door and showed them to their seats. Shortly thereafter, the woman sent Ms. Allen a contribution of $500, her first donation to the Performing Arts Center, even though she had been a subscriber for many years. The next season she increased her contribution to $1,000.

Judith Allen firmly believes that in this era when it is increasingly difficult to attract new audiences and develop among them some level of loyalty, the most crucial task of managers and marketers is to build and nurture one-on-one relationships with current attenders. Deepening the bond with current patrons and going well beyond expectations in serving them is the best way for the organization to guarantee that it will grow and maintain a healthy base of patrons and contributors, no matter what the competition may be.

Judith Allen reported that her responses to this patron were inspired by material she read in Standing Room Only.

The director of a mid-sized theater with an extremely limited advertising budget purchased an ad in the Friday arts section of her local newspaper to highlight the fact that her upcoming play was a “Midwest premiere!” Getting the rights to this play by a highly respected playwright was very important to her in developing her credibility as an artistic director of merit and the reputation of her organization in the theater community.

However, this ad was totally ineffective in selling tickets. Prospective audience members were most likely looking for the ad to answer questions such as, “What is in this for me? What will this theater experience be like? Creating an ad that is relevant for the target market is key.

Arts marketers often analyze how many seats in each price category in their house have sold for various performances. But for the seating areas that typically sell out – usually the prime seats – do marketers know how many more tickets they could have sold, had more been available? Such information is an important key to pricing strategy and to re-scaling the pricing structure of the house, when possible.

In preparation for their move to a new venue in 2004, managers at Chicago Opera Theater (COT) analyzed ticket sales in various sections of the hall they had performed in for nearly 30 years. They found that the highest price (A level) tickets typically sold out, the middle price (B level seats) either sold poorly or were the last to sell for popular operas, and the lowest price seats (C level) were moderately popular.

For the new, larger venue, COT allotted as many A level seats as were justified by their location relative to the stage, and raised A level prices about 15 percent. To appeal to enthusiastic, non-price sensitive patrons, COT created a new level of A+ seating, nestled within the A section and priced about 20 percent higher than the A seats.

Patrons were informed that a limited number of these seats were available, that these special seats were being offered to subscribers and donors before the general public, and that patrons could “keep” these seats for as many years as they wished to renew.

The response was phenomenal! Some people faxed in their orders the day they received the information. Many former A subscribers upgraded to A+ tickets. Within a month, approximately 80 percent of former subscribers had renewed for the new season, which was 10 months away.

Pricing strategy developed by Joanne Scheff Bernstein in her role as marketing consultant to COT.

Regular, frequent, deep discounts can be a dangerous race to the bottom.

What most arts attenders care about is value; not price. One way to increase value is to lower prices. Another way, and usually the better way, is to increase value through better communications and increased benefits.

It is true that deeply discounted tickets can often drive ticket sales. (For some people, price is not a factor at all and they would not attend even if admission were free). It may well be that people will purchase tickets at a meaningfully reduced rate that they would not purchase at full price. And some people may be willing to take the risk of trying something new and different if the price is right, possibly creating new long-term audience members. Most discounted tickets, however, are sold to people who would have paid full price to see the show.

There are serious concerns to be considered before undertaking or continuing a discount strategy. First of all, arts organizations cannot afford to keep ticket prices low indefinitely. Typically, eared income only accounts for less than half of revenue and contributed income sources are also challenged. If people expect that prices will be slashed 10 days, a week, or less before a performance, they will be “trained” to wait for bargains before they purchase tickets, or possibly, not purchase them at all. Arts marketers need to carefully segment their target markets and use price discrimination strategies – in other words: just make special offers available to people who would not be likely to buy without these special offers.

See Standing Room Only: second edition for a comprehensive analysis of pricing strategies, including dynamic pricing, revenue management, and more.

Although arts organizations need to concern themselves with filling the hall for tomorrow’s concert, they must also allocate funds to attract new audiences for both the near term and the future.

Many arts marketers bemoan the number of gray-haired people in their audience. Given the great amount of discretionary time and income older people often enjoy, mature audiences are valuable to arts organizations and their needs and interests should be met.

In today’s environment, it is foolhardy not to have an informative, up-to-date and easily navigable website that includes online ticket ordering and a comprehensive marketing plan for email messages, Facebook, Twitter, and so on.

Used well, email marketing and social media are cost-effective and powerful and can be used by all arts organizations, no matter what their budget. However, like all other marketing tools, they require strategic and creative planning. Sending out an occasional email message or blasting patrons with a series of frequent email promotions when, for example, the organization wants to announce a special program or sell a large number of tickets to a production that has not sold well to date, will not sustain interest and loyalty for very long. Repeating the same content with each medium will get tiring to patrons before long. Each organization should develop an overall plan for high tech marketing, just as it does for advertising, regular mailings, public relations, and other marketing efforts.

The marketer should always keep in mind the recipient’s perspective. Why would people want to receive this information? How can we ascertain that our messages are relevant and provide value to the recipients? How will the recipients benefit? Furthermore, the marketer needs to consider how benefits provided dovetail with other marketing offers, such as those offered through subscription brochures, “Friends” organizations, and advertisements.

It is up to the marketer to deliver something of special value to the customer in each message.