Clarifying Pricing Practices

by:

Joe Patti

Colleen Dilenschneider made some really important points about misunderstood concepts that lead non-profit organizations to make poor decisions and policies. The “Six Concepts that Visitor-Serving Organizations Confuse at Their Own Risk,” she discusses have subtle distinctions that can be difficult to clarify.

It is somewhat akin to the differences between PR, Marketing and Advertising. Even if you have taken the 101 course in any of these subjects, others around you may use the terms so interchangeably that you may find yourself having to stop and say, “No, that is advertising, not marketing.”

Among the concepts she mentions are Fads vs. Trends, which I had cited her on before; Market research vs. audience research; High-propensity visitors vs. historical visitors and key performance indicators vs. diagnostic metrics.

Personally, I don’t frequently get into regular discussions about visitor propensity or indicators vs. metrics, but they are worth reading about because you may think about issues related to those general terms and she makes some great observations.

What will cause me to keep this post bookmarked for future reference were her observations about Admission Pricing vs. Affordable Access and Discounts vs. Promotions.  The points she makes are great for getting pricing conversations in board and staff meetings re-oriented and properly focused.

In terms of Admission Pricing vs. Affordable Access, she says:

Admission pricing is the cost of admission for folks who visit your organization. It is an intelligently determined price point that contemplates what high-propensity visitors (people who are interested in visiting cultural organizations) are willing to pay in order to take part in your experience…. Admission price is an economically-sound business imperative for many organizations and admission pricing is not an affordable access program if your organization relies on paid admission in some capacity.

Affordable access (that is effective) is generally rather expensive for cultural organizations and it takes real investment that is usually made at least partially possible by gate revenues…When organizations lower their optimal price point in hopes of “being more affordable” or “reaching underserved audiences” they aren’t truly doing either of those things…Successful affordable access programs are targeted so that they truly reach folks who are unable to attend – not people who would generally pay full price but are just looking for a deal. Admission pricing and affordable access are two completely different means of access that play completely different roles in the sustainability of visitor-serving organizations.

Her thoughts on Discounts vs. Promotions run along the same lines:

Discounts are when an organization offers free or reduced admission to broad, undefined audiences for no clearly identifiable reason. Discounts do a lot of pretty terrible things for visitor-serving organizations. Simply, offering discounts devalues your brand….When an organization provides discounts, it often results in five not-so-awesome outcomes that you can read about here.

Promotions offer a targeted benefit for certain audiences for an identifiable reason. The biggest difference between promotions and discounts may be how they are perceived by the market. Promotions celebrate your community. Promotions demonstrate why an organization is offering free or reduced pricing in the communication of the promotion…In the end, one approach is more about an organization’s flailing attempts to hit specific attendance numbers at the expense of its brand and mission (and long-term ability to hit those numbers), and the other is more about your organization’s relationship with target audiences and communities.

As I suggest, the issues covered by these four concepts often come up in organization discussions and the lack of clarity between them often yields ineffective results.

Dilenschneider’s post started me thinking about what other concepts and practices might be confused and in need of clarification. A couple of ideas have come to mind, but I haven’t fully developed them yet.

If anyone has any suggestions or has thought about similarly confusing concepts they have already created distinct definitions for, I would love to hear them.

Of Thee I Sing (Baby)

by:

Joe Patti

On this fairly tense Election Day, I wanted to offer a little levity by drawing attention to the 1931 Gershwin brother’s musical, Of Thee I Sing.

The university theater department presented it this year because it is a satire of the presidential elections.

The plot is somewhat prescient in that Presidential candidate, John P. Wintergreen, is induced to run on a platform of “Love.” His campaign committee comes up with the stunt that involves him marrying the girl who wins a beauty pageant held in Atlantic City.

I might be too eerily similar to our current situation except that Mr. Wintergreen falls in love with a secretary he meets backstage at the pageant based on her ability to make great corn muffins. They are indeed great corn muffins since they also convince the Supreme Court to rule in Wintergreen’s favor when the pageant winner sues for breach of contract.

Given that the domestic skills of women are valued and repeatedly praised in the show, the pageant winner is rejected partially because she can’t cook, I think it is safe to say they didn’t envision a woman running for president at the time.

Just as a bit of trivia, President Cleveland and Buchanan were single when elected. Cleveland married after taking office, Buchanan remained single throughout his term.  I think it may be difficult to envision an unmarried man running for president these days too.

Here is a jazzy version of the title song by Ella Fitzgerald for ya,

https://www.youtube.com/watch?v=qN5-xbKAGn8

Funding Requests As Panhandling

by:

Joe Patti

I have been listening to On The Media’s series on the way poverty is covered in America and suddenly came to the realization that the language associated with the poor has many similarities to the way Non Profit With Balls blogger Vu Le describes funders perceive non-profits.

Proud of this realization, I went to Vu Le’s blog to grab some passages to cite…only to realize he made that exact point back in July.

As I was thinking about the parallels over the weekend, I really started to wonder if arts organizations need to find another tax structure to organize themselves under so that they didn’t have these negative associations to the work they did.

Granted, this is sort of abandoning the issue rather than trying to shift the perception. Arts organizations metaphorically moving out of the tax status neighborhood doesn’t help social service organizations who are painted with the same brush as the impoverished people they seek to serve.

Except that the perception can infect the social service charities as well which shows how unhealthy it is.

In one On the Media episode, Linda Tirado is interviewed and discusses how her family’s belongings were destroyed when their apartment was flooded. Eight months pregnant, she calls a social service organization looking for a chair so she would have a place to sit.

She was told she could have the chair, but she would need to take a resume writing workshop before she could pick it up. The charity wanted to make sure she was trying to better her situation. The only times the workshops were available were when she had to work so she would essentially end up putting herself in danger of being fired for want of a chair.

That is what personal responsibility means to somebody on welfare. It means here are these stupid hoops that we’re gonna make you jump through and then we’re going to give you a solution that absolutely won’t work for you. It’s that kind of just over and over beating your head against these ridiculous regulations and these double-blinds that don’t make any sense. And the whole thing is set up specifically to humiliate you as much as possible because what we need poor people to do in America more than anything else in the world is know their place.

Compare to a similar passage from Vu Le’s post:

The No-Free-Lunch: There have been idiotic proposals by clueless politicians designed to punish the poor for violating whatever ridiculous expectations are set out for them. Like taking away food stamps if their kids don’t get good enough grades or if they’re not volunteering or seeking out employment, despite the fact that there are only so many volunteer and paid positions to go around. In our sector, our funding gets threatened if we don’t comply with various requirements, such as working toward “sustainability.” A colleague mentioned a grant that won’t pay for staff wages and other indirect expenses, and applicants have to demonstrate that they will be completely self-sustaining within a year. That gave us all a good chuckle.

If people see non-profit arts organizations in the same light as welfare recipients, is it any wonder they don’t want their kids going into the arts? If they aren’t going to be constantly asking their parents for support, they will be asking society for support and what self-respecting parent wants that right?

I am not sure people equate the two in exactly that manner, but there is possibly a greater stigma associated with non-profits than we expect. Because people’s perceptions of poverty often has a very strong emotional element, merely surveying people about their attitudes may not be effective since they may not be entirely aware of how much their unconscious associations influence them.

About five years ago, it was relatively common to see people talking about the need for arts to adopt a different corporate structure. Many different options were debated but to my knowledge, no one ever restructured or organized a new arts organization under one of the alternative models. (Though we would really only start to see proof of concept now after five years of operation.)

While the idea that arts organizations need to distance themselves from those that society looks askance at may be immediately satisfying, not only does it not really appear to be viable, it doesn’t really solve the greater issues that arts organizations and non-profits in general face.

I have written before about the effort to build public will for arts and culture which seeks to change general societal perceptions about the arts. I have to imagine that a shift in the negative associations people make with the way arts are supported and funded would integral part to that.

How Much Would You Pay For A Selfie With Me?

by:

Joe Patti

Some concepts have been banging around in my head for a little while that haven’t quite firmed up yet. I am hoping writing it down and getting some feedback from others might help to start develop it.

I have begun to think that as time goes on, the most valuable commodity a public figure/artist, etc might have is their time, not their performance or merchandise.

In a talk Seth Godin gave at Carnegie Hall, he mentioned that when he goes to book signings, fewer people are buying books (around 28 minute mark).

Instead, they want a selfie with him. Since getting a selfie eats up so much time, he has tried to hire a professional photographer who can supply the images to people, but they insist on taking a picture with their own phone. He says the picture itself is worth nothing, it is the ability to reflect on the experience and share it with friends from your own handheld device that has value.

Obviously, one must provide some sort of notable experience or product that inspires people to want to take that selfie with you in the first place. It could very well be that increasingly the most valuable element will be that opportunity to meet the person and take a selfie. The challenge may be how a person manages that to their benefit whether it be monetarily or preservation of their sanity.

There was an article on Vice about how meet and greets as currently conducted suck for everyone. Fans frequently pay hundreds of dollars for the opportunity to meet with someone, but they only get a second with them. Many fans try to squeeze in more time through various tactics, among them trying to grab a selfie when it isn’t allowed. For their own part, the artist is under pressure to participate in interactions with hundreds of fans in a small period of time. In general, all parties can end up dissatisfied.

My first thought is that these artists or their management are trying to make as much money as fast as they can. There has already been some minor backlash so I wonder how much longer this might be sustainable. As the Vice article says, the more famous one gets, the more of you the fans feel they are entitled.

Is there a better way to handle this knowing that the personal interaction and selfie may be viewed as the most valuable part of the experience? Instead of $350 tickets to a performance, does it make sense to charge $150 to everyone and $750 to a meet and greet that only admits a limited number of people but guarantees you longer interaction time?

The problem with that is 1- scalpers will probably still be able to ratchet the tickets up to $1000 on the secondary market unless a solution is found and 2- A high meet and greet price limits access to wealthier people. ($750 is already about a median price of what people are paying for meet and greets so an extended meet and greet pass could easily start at $1500+.)

Many public figures/artists are philosophically opposed to putting up different types of barriers to fan interactions with them. Whether it be limiting numbers, time period or charging for access.

Ultimately, for a lot of public figures I think it may bear examining what part of the experience is most valuable to people and adjusting the experience accordingly.

Unfortunately, while I do get recognized at conferences and other gatherings as the genius blogger I am, few people have been asking for a selfie with me so perhaps I am just coming at this from a place of selfie-envy.

Anyone out there have any predictions on what the nature of public figure-fan interactions will look like in the future? Ideas on how to manage it with things like policies and emerging technologies?