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Visiting For The Gift Shop

June 15, 2022

by:

Joe Patti

Whenever I have visited a museum that forces you to go through the gift shop before you can exit, I have viewed the design as a cynical cash grab. As I think about it, while I have frequently purchased gifts for others at museums, they weren’t institutions that forced you to exit through their retail spaces.

So it was with interest and curiosity that I read Colleen Dilenschneider’s post about the strong link between museum gift shops and museum memberships. This is definitely not something I had considered before. If you have a gallery or museum type organization, take a close read of her piece because she includes a number of caveats about reading the results in a certain manner which I am definitely not going be able to accurately reflect here.

Dilenschneider suggests that museum retail may be a strong element in re-engaging with members and the community at large in the post-Covid next normal. Many lapsed members intend to renew next time they visit and members are 15% more likely to have first visited the museum for the gift shop than non-members. So the retail space may be what draws lapsed members back first.

One thing she mentions is that gifting objects from museum retail spaces are often closely tied to self-image.

Critically, we know that people believe that visiting a museum makes them better friends, neighbors, and parents. Purchasing an item from the gift shop can reinforce perceptions that someone is the type of person who supports their community by way of supporting an organization, purchases unique gifts for friends and family, and leaves their home to have educational experiences. This factor may be even stronger for members.

While she can not definitively say self-image is stronger motivator for members, data shows that members make purchases from museum gift shops in higher percentages than non-members and tend to spend more on those purchases than non-members.

The fact that they may get a discount is ranked relatively low in importance as membership benefit.

Members consider benefits such as supporting the organization, free admission, priority access, and positively impacting the museum’s mission significantly more important. Nearly a quarter of members are having a retail interaction. Instead of assuming they’re there for the discount, consider that those interactions can be an important touchpoint of engagement for strengthening this community of supporters.

On the question of “Are members important to retail or is retail important to members?” Dilenschneider says that there are myriad interrelated factors comprising the museum experience. People’s motivations shouldn’t reduced to a single simple question. Rather as she mentions in the last line quoted above, museums/galleries should focus on using the retail touchpoint to deepen relationships with members and an opportunity to potentially cultivate non-members into members.

While Dilenschneider provides examples of two museums that do encourage membership sign ups in their retail spaces, I suspect this might be accomplished in well-designed, soft-sell manner. I am just thinking about all the stories of people who attended a performance once and resented being barraged by phone calls and mailings about subscribing and donating.

Audience Relations, State of the Arts

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So You Want To Name A Stadium…

June 14, 2022

by:

Joe Patti

Via the Marginal Revolution blog I came across a piece analyzing the economics of stadium naming. The basic conclusion was that if you see a corporation buying naming rights for a stadium, you should sell your stock because most of the time the company ends up under performing.

What got me to read through it was the promise that by the end I would know:

How to decide whether a company you run or advise should buy the naming rights to a sports venue (e.g. high school stadium, college stadium, major league stadium, etc).

I was hoping there would be some differentiation between the benefits of sponsoring a high school or college stadium vs. major league stadium which might point to a possible benefit to a company for sponsoring performing arts venues and interior spaces. Unfortunately, the article only deals with major league stadiums and doesn’t cover college or high school at all. There is a promise of a more detailed analysis if you subscribe to the author’s newsletters.

Overall the analysis is interesting to read due to the context of why different company’s stocks under performed. Banks and financial institutions were bailed out by the US government. Energy companies profiled were involved with all sorts of scandals or were part of a sector that just broadly under performed.

There were two examples of companies that beat the overall trend and did better: Qualcomm which stepped in when San Diego was desperate for funding to complete a stadium expansion. As a result, Qualcomm paid much, much less than they might otherwise have.

Target was the other example. Their deal apparently included additional enhancements that sponsorships generally don’t. Among them were appearances of NBA players at stores and potentially merchandise deals.

I have never really paid much attention to stadium naming news, but the insight the article provided about some of the arrangements and how beneficial it has been to the company stock† sheds light in an easily digestible format into an area which isn’t widely reported on.

†Since I frequently mention that not all measure of value are relevant, I feel I should point out that just because the stock for many of these companies didn’t do well doesn’t mean the naming arrangements weren’t valuable to the companies in other ways.

Fundraising, Marketing/PR, State of the Arts

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This Place Has Rats. But They Will Be Gone Soon!

June 13, 2022

by:

Joe Patti

I know for a fact that for at least 30 years now, market textbooks and classes have made the distinction between marketing and advertising/promotion the first definition provided. That has pretty much been a useless effort because people generally think of the terms as synonymous.

I don’t expect to move that needle much at all today, but I thought I would share a recent post Seth Godin made on the topic to get readers thinking about their own practices.

If an exterminator puts signs and banners in front of a fancy house when they’re inside killing rats, that’s promotion. But it’s not good marketing.

Marketing is creating the conditions for a story to spread so you can help people get to where they hope to go. Marketing is work that matters for people who care, a chance to create products and services that lead to change.

[…]

If you have to interrupt, trick or coerce people to get the word out, you might be doing too much promotion and not enough marketing.

I especially like this first illustration he uses. While it isn’t a universally applicable example of the difference, it does make the point that what is good promotion doesn’t necessarily create an environment that is in everyone’s interests.

In the same way, a message of “come see this show” is different from “this is a place that provides an opportunity to share experiences with family and friends.” The latter is part of a narrative about attaining what people aspire to rather than selling a single specific product.

Audience Relations, Marketing/PR, State of the Arts, Working In The Arts

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Upgrade Your Theatre Seat For More Legroom?

June 8, 2022

by:

Joe Patti

I caught a story on NPR’s Marketplace yesterday that discussed the way airlines use premium seating. One of the people interviewed mentioned that airlines craftily use the separation of time to get people to upgrade. Because the flyer is offered the opportunity to change to premium economy around the time they check in, months or weeks after they purchased the ticket, consumers view the upgrade payment as a different transaction from the initial seat purchase rather than thinking about the total amount they have spent.

Of course, that got me thinking about how this could be applied in the arts realm. While there are performing arts venues that employ dynamic pricing to extract additional revenue from ticket sales, by and large most organizations don’t have the interest or the computing infrastructure to implement that sort of ticketing.

However, many venues have ticketing systems that are capable of providing the view of the stage from a particular seat or notes about which seats have more leg room. There may be other characteristics about the performance space people value that can be integrated into seating choice as well.

An email can be sent out a week before the event with information about how to prepare for the visit, including parking, restaurants, etc., and offering an opportunity for an upgrade in terms of sight lines, leg room, or whatever.

The offer of the upgrade doesn’t have to wholly be driven by a profit motive. It can be offered as a loyalty incentive to help fill houses now and in the future. Because you have been a loyal attendee or purchased well in advance, you can upgrade from the $35 seat to a $60 seat for an additional $10 rather than $25.

If you know that part of your audience base are price sensitive, last minute purchasers, you have just freed up a cheaper seat that can be sold and incentivized loyal patrons who plan in advance to continue to do so.

While I was thinking about all this, I recalled an instance where a person on my staff suggested that a renter do something of an inversion of the usual seat pricing approach and price seats up close less than those further back. I was a little conflicted about this because while we as insiders felt that seats in rows G-L are among the best seats, pricing should be based more on what seats the buyer thinks are the best.

But I also wondered if people have been trained by the way things are priced to think the highest priced, closest seats are the best? Given their choice in a general admission setting at a live, non-festival experience, people rarely head immediately to the front and fill in as close as they can possibly get. More often than not, the front 2-3 rows are virtually empty by the time the show starts unless the event is close to sold out.

Is there a psychological element inherent to reserve seating events that changes the calculus for people? If the front few rows are priced less than those behind, do people think the venue management are fools and they are getting away with something by paying less? And is that necessarily a bad thing if it has people watching closely for when tickets will go on sale so they can grab those great seats at a cut rate? Will they relent and buy slightly higher tickets if the cheaper ones sell out before they get there?

Of course they need to be confident those seats did sell and weren’t held back to manipulate sales or weren’t grabbed by resellers. This approach wouldn’t work well in places that are subject to scalpers with an automated purchase process.

Arts Facilities, Audience Relations, Pricing

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