Don’t Take Them For Granted

A lesson from the big boys in the for-profit world. My sister works in the new business department of Deutsch Inc. (as seen on The Apprentice) In the last couple months they have lost two accounts because new people took over management positions and simply decided to move their business to agencies with which they had preexisting relationships. There was no attempt to meet with the folks at Deutsch to discuss anything, just a call saying the business was being moved elsewhere.

It wasn’t a matter of poor results either. The first company, DirectTV had actually seen the largest increase in business ever since those godawful ads with celebrities reading half-literate testamonial letters began airing. Yesterday, Snapple became the second company to dump the agency and Deutsch did everything for them including designing the bottles and labels and writing those fun facts that appear under the cap. (I actually contributed a couple!) Deutsch would like to replace them with another beverage account but it is tough finding one that Pepsi or Coke doesn’t own.

A less or two here for non-profits. The first is obviously not to take your customer’s loyalty for granted. This is not to say Deutsch did. By all accounts they served their customers well. However, as you can see, some times it doesn’t matter how good a job you do and how much value you offer a customer. It just takes one opinion leader to turn a large segment of your customer base in another direction. Obviously, this can make your job easier in some respects if you can identify the opinion leader and harnass his/her influence for your own ends. But you can also encounter an easy come, easy go situation too.

Another lesson that isn’t necessarily illustrated by the Deutsch example but bears discussion is not to take your audience for granted in general. One of the things that constantly annoys me, and I am sure I am not alone, is seeing lucrative offers for subscribing to a service or magazine. Unfortunately, I can’t take advantage of these offers because I have been a loyal customer for a decade. I really resent the fact that companies will do all sorts of wonderful things to entice me to be a customer but they don’t do anything to reward my loyalty much less entice me to remain a customer. Even worse, when I originally signed up, they weren’t offering any incentives so I missed out entirely.

The only time I get offered special deals, it is to buy something I don’t need from a partner. This makes me strongly suspect they are getting a cut of whatever I buy due to their referral. Do companies really think they are rewarding me by giving me a deal on something I may or may not want when they know for certain I value what they offer?

It is so much more expensive to get new customers than it is to retain current ones, it is worth at least recognizing a person’s loyalty. Given the power and ease of use databases provide, it would be so easy for arts organizations to reward loyalty. If person buys X number of single tickets in a year, they get flagged for a free ticket or a discount. They have been buying tickets regularly for 10 years? Their tickets are mailed in a thank you card with a gift certificate for dinner.

Certainly, you may do all this work and they may still be seduced away by an impulse to do something different. An arts administrator’s job is to make it easy to at least partially ignore those seductions.

Ticket Discrimination

A short entry today because I had a job interview.

I came across an article recently about a study done on multi-tiered ticket pricing for theatres. The concept is similiar to how airlines price their tickets so that some people are paying a premium while the person next to them paid next to nothing.

A study was performed by Phillip Leslie, a professor at Standford University’s Graduate School of Business. He looked at the 1996 Broadway run of Seven Guitars to determine if the production’s 17 category pricing structure was beneficial to consumers or not. He found that it wasn’t particularly beneficial or harmful to consumers on the whole, though the producers did realize a 5% larger profit than they might have.

The article goes on to discuss the benefits of some decisions the producers made and how they could have made some more money given consumer purchasing habits. There were a couple sentences that caught my attention in the piece:

“Price discrimination is a practice used by companies that generally don’t know a lot about what consumers are willing to pay. “It’s something firms do when they lack good information about customers,” says Leslie.”

When a performing arts organization sets their prices, they are essentially setting a maximum price they feel their regular audience will be comfortable paying. They do surveying and communicate with this group directly and indirectly so they know at least a little about them. However, they don’t know much about those who don’t attend and they are the people multi-tiered pricing would be structure to.

In an entry last week I referred to the PARC survey that discovered the people who find price to be the biggest impediment are those who actually attend performances with some frequency. It might be beneficial if arts organizations could find a simple tiered pricing structure (airlines need a lot of computing power for their categories) that didn’t ultimately hurt their bottom line.

Those who are frequent attendees will be more familiar with the process of getting discounts and thus receive a “reward” for their devotion. Those who are not as familiar will end up paying a more premium price. Some people may end up paying as much as the market will bear rather than the top amount the theatre assumed the audience will pay.

This may be the structure which replaces the waning popularity of a subscription series. In order to make a tiered pricing structure work, especially one based on market demand, organizations would have to stop publicizing their prices. The only way to learn about discounts would be to be in an organization’s database to receive brochures, email, etc. where the discount prices were published. The core audience for an organization would then consist of people who are loosely interested in the production series rather than the devoted subscribers.

A multi-tiered system would put more responsibility on the shoulders of the consumers. Instead of knowing that they can always get half-price tickets the day of the show and knowing what half-price will be, the price might be half the current top price.

If tickets start out being offered at $25 and the show isn’t selling well, the theatre might email their core that tickets are now $20 two weeks out, if it still doesn’t sell well, 3 days out they might drop it to $12.50.

However, if the show start selling well, the theatre might raise the price to $35 and two weeks out email their core that discount tickets are $30, but then three days before might be selling the discount tickets at $40. Or perhaps they email their core a week out that it looks to sell out so get tickets now. (A claim they have to be very careful about making lest it appear to be hype to drive sales when the seats end up only 2/3 sold.)

Since people are making decisions about entertainment at the last moment these days, the only way it seems an organization can respond is by providing audiences with the information they need to make decisions. If the changing price structure drives people to your website so they can check which way the pricing is going, it provides the organization with an another opportunity to communicate additional information to them.

Changing pricing is a delicate matter and is as much public relations as maximizing revenues. The person who attends 2 productions out of 12 and barely gives a thought to the organization’s well being might become mightly offended that you are charging so much for a last minute ticket after the loyalty he has shown in the past.

In an early entry, I noted Ben Cameron’s observation that we may be entering a time when there is a shift in the social contract. This change in pricing structure might become a reflection of this shift.

Yeah, Something Like That

I am afraid I found another subject to preempt the articles I bumped yesterday. Last night I was watching Looking for Richard on the Sundance Channel and realized it was a good illustration of how arts organizations can make their offerings more accessible to the general public. (It is playing about 5 more times this month.)

The movie stars Al Pacino making a documentary about filming Shakespeare’s Richard III. I was really excited to come across the movie because I realized it was a good example of everything I have been writing in regard to letting people see/know about the the production process.

I had never seen Shakespeare’s play, nor did I know much about it other than Richard’s physical deformity and the “kingdom for a horse” line. Since Pacino’s purpose was to make the play and the process more accessible and transparent to general audiences, test then was how well it communicated this information to me.

I was rather impressed by his efforts. The movie was sort of a stream of consciousness mix of explainations, casting and rehearsal scenes and portions of the actual play. The pacing and shifts were probably well suited to the short attention span of audiences.

They did a good job explaining the play. There were people discussing the historical perspectives and voice overs commenting on hard to understand changes in the plot. There was commentary by Sir John Gielgud and other notable British actors about why Americans actors are intimidated by Shakespeare.

The movie provided opportunities to see rehearsals where the actors discussed and sometimes argued about the play and the choices each was making about their character. It also offered insight into the variables considered when deciding what actor would be best for what part.

They also got into the language, how to act Shakespeare, iambic pentameter and what it sounded like. They talked about how audiences have difficulty with the language and essentially said people are not required to understand every single word as long as they got the gist and understood the power of the words.

For the most part, it was well done. Even if you didn’t know Pacino has a history with the play, his manner clearly indicated he was asking questions for the benefit of the audience’s comprehension. Theatre’s don’t have the resources to offer such a slick presentation prior to opening night (though could certainly film and edit a similar piece to offer as a resource). However, the film does illuminate the general elements that would be valuable for an audience member to know. This means more than just covering these topics in a study guide, but also in blog entries and perhaps thinking aloud in rehearsals that are open to the public. Obviously, some of the material would best be covered in a discussion prior to or after a show or rehearsal. It would probably sound stilted for an actor to be musing aloud about the challenges of the text in a postmodern world.

Speaking of educational resources, I found this website maintained by the Richard III Society which contains a viewers guide and lesson plan for the movie.

Storming the Barriers

Since I was talking about the PARC survey yesterday, I thought I would continue today with a discussion of barriers to attendance and give a few thoughts about dealing with these problems.

The top three cited barriers to attendance were: Hard to Make Time to Go Out, Preference to Spend Time in Other Ways, and Cost of Tickets. However, there were some interesting lessons from nearly all the barriers.

In regard to Cost of Tickets, the survey found (bolding is mine):

We draw three conclusions about cost of tickets. First, as might be expected, the cost barrier is associated with household income level. In short, households with lower levels of income are more likely to cite cost of tickets as a barrier to greater attendance. This relationship is strongest in Sarasota. The relationship is weak in Boston, where a quarter of respondents from the wealthiest households still say that cost is an inhibitor for them.

Second, the tendency to claim cost of tickets as a barrier to performing arts attendance is substantially unrelated to education level, age, or whether there are children in the home…Oddly, the positive sign indicates that respondents with more education (who are also those respondents who tend to have higher incomes) are slightly more likely to cite ticket prices as a barrier than their less educated counterparts. While the low level of Somer’s d implies a weak relationship here, we nonetheless suspect a complicated
association among income, education, and the attitude toward cost of tickets in explaining attendance at performing arts events.

Third, unlike most other barriers, cost of tickets is cited by a greater percentage of attenders than nonattenders or frequent attenders. This generalization is not true in Sarasota, where frequent attenders are most likely to cite cost as a barrier, but it is a clear finding in the other four communities.

I found it very interesting to learn that people who attend often and have higher levels of income and education are more likely to cite cost. It almost makes me think that people who enjoy attending performances might come more often if the price was lowered except for the barrier of hard to make time to go out.

The study found that hard to make time to go out was “Overall, attenders and frequent attenders are almost as likely as nonattenders to say that hard to make time to go out is a substantial barrier. The main factor that makes this a big barrier for more people is the presence or absence of children in the home. Whether the children are younger or older, respondents in households with children are much more likely to say that time keeps them from the performing arts.”

These results might suggest that a daycare (or nightcare) center might remove this as a barrier for some people. The Utah Shakespearean Festival ran one in conjunction with their performances when I worked there. Satisfying older children might be more difficult. While programming can certainly be aimed at entire families, adults occasionally want to be engaged by more mature subject matter.

In a related question, family obligations was cited as a big barrier to attendance by those with children and hardly at all for those without. The ages of those indicating it as a big problem fell between 25-44 which may partially explain why mean audience age tends to be around 50. That is the time when the nest empties and people can indulge their inclination to attend.

Parking, as one might imagine was cited as a bigger deterrent in cities where parking was a problem. Unsafe and Unfamiliar location was cited as a big impediment less than 10% of the time. However, the researchers noted that the least educated, least wealthy and oldest respondents were more likely to rate this as a substantial factor. “Washington, D.C., is notable because more than twice as many nonattenders cite this factor as a barrier than attenders. This suggests that the issue is substantial enough to keep some people away who otherwise might be inclined to attend performing arts events.”

Some of the results here were very interesting to me. It was no surprise that older attendees might be turned off by unfamiliar or unsafe locations. However, the results also suggest that people with the most education and most to lose if they were mugged or had their car stolen were less aware of the danger than those with less material wealth, but apparently more practical education in the matter.

The response of Insufficient Publicity or Information About an Event was very interesting. The survey found that the older the respondent, the less likely they were to cite lack of information as a barrier. This suggests to me that dissemination of information over the internet, email, cellphones, pagers, etc may be important to attracting younger audiences. Younger demographics don’t get their information from print media as much as their elders do. Certainly, they aren’t listening to the same radio stations as the long time patrons are.

While advertising electronically and moving ads to the hip stations won’t automatically bring youthful hordes to the seats, these channels can support a campaign that communicates the value of attendance to this demographic.

One of the other big response categories was related to enjoying other things. The survey makes a sort of “no duh!” statement that “a big reason why some people do not attend the performing arts is that they prefer to do other things.” It is one of those questions that has to be asked if you are going to administer a valid survey, but which doesn’t yield earth shattering answers.

The response that there was “No One to Attend With” wasn’t a major factor overall in not attending. It was a big problem for those with lower education and those who did not attend. Lack of Appeal and Feeling Uncomfortable and Out of Place as barriers were also tied to education level and non-attendance, though the relationship to education level was slightly weaker. This information made me think that an offshoot of the docent program Drew McManus suggested might be helpful for this demographic. In addition to providing a relaxed format of education, assembling a group who are all nervous about attendance could be enabling as it eased their anxiety and provided a source of companionship for the future.

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