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Embracing The Feedback Loop

August 13, 2013

by:

Joe Patti

A few months back, Seattle based artist Clayton Weller, wrote a piece addressing what he feels is a self-limiting outlook held by many artists that theatre is dying and there is no money out there. He confesses to having embraced the same outlook until he worked for a start up company.

Now he advocates for every artist to work for a start up in order to adopt their more nimble outlook. (my emphasis)

When you say the word “business” to someone, especially an artist, they automatically assume you’re talking about something stuffy, rigid, uncompromising, and [insert horrible adjective].

You say “business” but they hear “bureaucracy.” THEY ARE NOT THE SAME THING!…

To eschew something because it can be done poorly, is a disservice to yourself, and might rival einsteins famous definition of insanity (look it up plebes!).

[…]

Talking directly to people, iterating ideas before execution, creating a feedback loop with measurable data; it all makes perfect sense.

By doing this you create a real connection with your customer (audience) and develop a product (art) people will not only tolerate, but will clamor for. In terms that an artist would use: your art becomes relevant.

That’s a big deal.

The average artist does NONE of these things. Not only that, they intentionally avoid them. They lock themselves away to pursue their secret “vision.” When they receive negative criticism, they blame their audience (customer). WHAT?!?

For me this addresses some age old debates about artists being more business minded and selling out vs. thinking you know what audiences/customers should like. (the most negative extremes of the spectrum)

Obviously, I like his point about not dismissing options because other people don’t do it well.

I think the complicating factor is the fear is that you too won’t do it well and the process will dominate your time and take you away from your creative work. Or worse, make you resent your creative work for making it necessary to become involved in the business side. For some it may not be a wholly irrational fear.

Still, I think regardless of your fears and regardless of your views about what constitutes selling out and remaining true to your art, the feedback loop Weller mentions is a useful process.

Failure and missteps are things you will face, especially when you are working in the arts. Proper feedback can help minimize this over time. If nothing else, the process can help you identify the proper people to solicit for feedback.

If you start a flow chart from the simple proposition that you want to support yourself with your art. You can ask, do people say nice things about my art? If the answer is yes but they don’t pay for it, you either need to find other people to get feedback from or figure out a different way to monetize your art from the people giving you feedback.

Likewise, if there are a lot of people who criticize your work, but still won’t buy it after you make the changes to the areas in which they say you fell short, then you may need to find other people to solicit feedback from.

Obviously it isn’t as completely clear cut as that. The problem may lie in your execution not being very good. My point is that you can’t depend entirely on your family and friends or trolls for feedback. It is necessary to identify people with the level of discernment you seek whose feedback you can trust and work from there.

You just need to recognize and own the potential implications of appealing to 1,000 versus 100,000. You can make a lot of money from those 1,000, but you need to be producing to a certain standard. Meeting the expectations of 1,000 can be just as burdensome as that of 100,000.

Art(ist) Education, Business Models, Working In The Arts

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Info You Can Use: Flex Subscriptions And Your Subscriber Base

August 12, 2013

by:

Joe Patti

I have been pondering whether we should start offering a “Choose Your Own” subscription series in future years. In my past jobs, we never programmed with an eye to filling slots in a series so we offered “Choose Your Own” discounts without any problem. Now I am working in a place which has historically had a number of series and I am looking to offer an additional flexible one.

Since this blog is about discussing practical aspects of arts administration, I thought I would share some of the issues I have been taking into consideration both to solicit some feedback, but also give a sense of the thought process you need to engage in when making these decisions.

The numbers I am using in my example aren’t the actual ticket amounts and they are equal for all events in a series for sake of simplicity. The discount for buying the full season relative to the sub-season pricing is the same though.

Currently we offer a full season of nine shows ($290) and three sub-seasons of three shows each: Broadway ($150); Variety ($105) and Classical ($75).

My idea for a flex subscription is to offer the sub-season pricing if to any three shows or more shows of your choice.

That might break out as follows:

Instead of buying a series, people would pick and choose from among all the series. Because they are picking and choosing willy nilly, we can’t guarantee them the same seats will be available at every performance, but they still get their seats before single tickets go on sale and at a discount.

Usually the idea behind flex subscriptions is to give people who can’t make it to all the shows in a series the ability to benefit from an advance purchase discount. It is seen as a plus if you can get someone who has historically been a single ticket buyer to commit to attending multiple shows in advance.

But the important issue is the need to factor in the likely behavior of your audience. If there are a lot of single ticket purchases for three or four shows across multiple series in the days right after single tickets go on sale for full price, you need to ask if you think more people will pick up this practice or if you will only end up giving a significant discount to the same group who typically buys tickets at full price months in advance of the show. You could end up losing money in the process.

The same for those who buy the classic series and then one or two tickets to the Broadway series at full price of $65. If there are lot of those, you may end up giving up quite a lot at a $15 difference per ticket.

In our case, our biggest series base is in Broadway with far fewer in Variety and Classic. It wouldn’t represent a significant loss if the Variety and Classic people who buy Broadway tickets at full price received a discount.

My biggest concern is that we may lose full season subscribers to a piecemeal flex series. Every year there is a Broadway show people aren’t crazy about so if Full season subscribers didn’t like one show and picked the other 8 individually, that would represent a $10 loss per subscriber. Not a big deal individually, but if many people made that choice it could be problematic.

The same with the Broadway series subscribers. If they dropped one Broadway show and picked up one Variety or Classic show as their third, that is a loss of $15-$25 per subscriber.

Now the easiest solution to keeping Full Season subscribers from becoming “slightly less than Full Season” subscribers is to place the “Choose Your Own” on the same footing as the other sub-series and limit it to any three events. That way you don’t have to worry about people defecting to a 7 or 8 event subscription.

But if you are in a situation like I was in my last job where you don’t have a large subscriber base, you can go all out and offer discounts on as many shows above the minimum as people care to buy. You have a fair chance of picking up new subscribers.

I will confess I was pretty gung ho about flex subscriptions and the philosophy of giving people the most freedom to choose in return for making that choice in advance. Organizations that kept their audiences tied into a designated series were adhering to a dated concept of audience relations! But as I say, that was when I didn’t have a fairly reliable subscriber base.

Now that I am in a situation where I am doing an analysis of the pros and cons in preparation for pitching the idea to an organization with an established subscriber base, I find myself being a little more pragmatic. (Though note I am still trying to introduce a flexible scheme.)

So what about you? Thoughts about this? Are there packages you have put together to entice people to subscribe that worked? Some that back fired on you and made you lose income or subscribers?

Audience Relations, Boards, Business Models, Info You Can Use

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Have A Fulfilling Experience Being An Artist

August 7, 2013

by:

Joe Patti

Earlier this week, Sydney Arts Management Advisory Group listed an artist residency program that really appealed to me.

Only Australians are eligible to apply, but I just really liked the way the Asialink program at the University of Melbourne listed the expectations for their program.

You can’t use the residency for research or academic study. Instead, (my emphasis)

Each resident is offered a specific amount of funding and initial contacts in the host country. It is then up to the individual to make as much of the experience as possible and to plan and manage their own program.

Key attributes are the ability to cope with sometimes unusual or difficult situations, and to work successfully in a challenging environment while maintaining good working relationships.

That is basically it. The criteria is to have a plan, take advantage of the opportunity, be able to cope with strange situations you may encounter. You have to show that you worked on your project when you return and submit an accounting about how the money is used.

Coming from a higher education environment which emphasizes research and publishing in order to keep your job and an arts environment which has lengthy grant proposal and reporting requirements, this is refreshingly brief and liberating.

Applying will take some work and preparation, and certainly the opportunity isn’t for everyone, but the process doesn’t seem terribly onerous.

I am sure there are other grant programs like this, but I have come across few which state they expect you to have a fulfilling experience.

It makes me a little envious and wish I lived in Australia since the program includes Arts Management experiences.

I offer this in hopes it will inspire others to emulate them. And if some entity is offering something similar and Americans are eligible, I hope someone tells me about it!

Art(ist) Education, Working In The Arts

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Info You Can Use: When It Is Okay To Punish Your Customers

August 6, 2013

by:

Joe Patti

A couple weeks ago I wrote a post in which I decried the practice of many companies who offer better rates to new customers but provide no reward to long time customers.

Right on cue the next day, MIT’s Sloan Review published a piece that analyzes the transactional relationships people have with different types of business and discusses which can get away with treating long term customers poorly.

They acknowledge the fact that it can often be more costly to find new customers than to retain the ones you have, but note this is not true for all types of business. They use examples of cable and cell phone companies who provide services that are difficult to change versus a highly variable situation where someone may prefer to shop at Lowe’s, but will often purchase from Home Depot because it is move convenient to the drive home.

Lowe’s and Home Depot have to constantly work to retain customers and attract new ones while cable and cell phone companies can get away with raising rates mid-contract. The article authors say even if you are getting an offer to buy a new phone at a discount from your current service provider, it isn’t as sweet a deal as a new buyer is being offered.

Despite using the common terminology of “subscriber,” performing arts organizations don’t have the same luxury to treat current customers poorly that cable and cell phone companies do. I am sure it is no revelation that performing arts organizations operate in a far more competitive environment.

While depressing to contemplate, it was interesting to read the rationale that punishing customers makes good business sense.

Some customers are worth more than others and some customers are a greater drag on resources than others. Even if you don’t act on it, cultivating the ability to identify what policies are causing you to lose money can be valuable.

There might be some good lessons for arts organizations here. For example, some banks have started charging people to use lobby services and for receiving statements in the mail and made using ATM and receiving statements electronically less expensive because it costs more to maintain a physical presence and pay people.

Perhaps performing arts groups should make it more expensive to buy tickets in person versus online, rather than vice versa, as is the case in many places these days.

On the balance sheet, the answer is clear. However, since cultivating relationships are often viewed as the most important function arts organizations can fulfill for their community, perhaps it is better not to provide disincentives to personal contact.

But is that relationship something your customers value or is it something you have decided they value?

You should know the answer to this because if they do value good relationships and service, that is more expensive than just having someone at a desk. The training and retention of staff who provide good service and the database to support them requires a greater investment than just having someone available. If people don’t really value personal service, then maybe it is wiser to push them toward online ticketing and reduce ticket office staffing.

So here is the conclusion the authors came to:

“Specifically, we discovered that, most of the time, rewarding and acquiring new customers creates the most value. Under select circumstances, however, attention should shift to the retention of existing high-value customers….In markets that have a high degree of both flexibility and value concentration, companies should focus on rewarding their own customers — in particular, their best customers.”

The examples they use of high flexibility and value concentration is retail shopping, rental cars and airlines where people have many options to choose from and return customers will often spend greater amounts than just casual shoppers. They suggest reward programs for high frequency customers.

I translate that over to the arts as trying retain and reward subscribers and donors. The arts already acknowledge that these groups are high value individuals and need to be provided preferential treatment. So we have been doing something right all along!

Except that the authors don’t really address the question of what to do when your customer base is aging out. The article really just deals with optimizing your income from customers based on where your product/service falls on the continuum of flexibility and value.

There is an assumption that you have a product for which there is a demand. They address the question of how to treat your customers when you get them, not necessarily how to get them.

It is encouraging that the article validates the basic model many arts organizations use with their customers. The challenge that is still before us is offering a product people want and an rewards program that they value.

Audience Relations, Info You Can Use, Management Philosophy, Marketing/PR

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