Rethinking Arts Facilities

As noted in one of our earlier October blogs, a recession economy is exactly the right time to plan. And it may just be a terrific time to rationally rethink community goals and needs for new arts facilities. Feasibility studies done now may actually lead to smarter and more viable arts facilities than those done in the heady days of a flush financial market. Why? A recessionary economy brings new need for partnerships, creative problem solving, and right-sizing for civic construction ventures.

There are a myriad of wonderful performing arts centers, theater complexes, and museum facilities out there to use as models of wise budgeting and solid operations.

Trends we see and like:

1) A new interest in performing arts centers “attached” to high schools. Not every city and town has the population to afford a major stand alone PAC. But they can build outstanding halls that provide their students incredible opportunities and that also provide residents with buildings that otherwise couldn’t be afforded in capital or operations. Some of these halls are free standing. Most have distinctive and professional-quality entrances and box offices. Many include black box theaters. Some are even multi-theatrical complexes. The truly great ones are every bit as workable for professional performances as for student events, and as a result are booked almost every day of the year. We’re thrilled by all that we see happening in the wonderful and affordable ($5 million) Bothell (WA) North Shore Performing Arts Center, which has been a joint venture between the Bothell School District and a private sector group. And for magnificence, the new Lake Zurich High School (IL) Performing Arts Center couldn’t be topped.

2) Facilities on community campuses. These are particularly workable in mid sized and smaller communities, but have applicability to larger cities as well. Bloomington, Minnesota’s modest but absolutely lovely performing arts facility shares a building entrance with the city council chambers. Rooms used by community arts groups for rehearsals in the evening can be used by the fire department or planning office for meeting space during the day.

3) Multi-jurisdictional and entity partnerships in making facilities happen. Today’s projects require creative partnerships, sometimes involving all or most of the following even before private giving or bond financing come into play. municiipal and or county goverment, school districts, colleges, and developers. In operations, it is fabulous to see models ranging from THEARC in Washington DC all the way to the proposed Pinedale Community Center, in Wyoming. Put together by multiple nonprofit, education, and civic groups, these are models where the arts – including state of the art performing arts halls – live side by side with afterschool education programs and diverse community service agencies. They put the arts in the heart of every day community life.

We still love the major arts facilities that are community architectural icons and centerpieces. But we are drawn to the above trends as wonderful solutions that are also financially much easier to capitalize and operate. They are the type of solutions that are worthy of consideration, not only due to the present economy, but because they really work! The books balance, users are delighted, and quality arts are at the heart of community life.

Keeping Boomers Buying Tix Even When They Hurt

Forbes just ran an on-line interview with its publisher, Rich Karlgaard, talking about why this recession has created so much fear. The fear, he says, comes from the ranks of the 77 million Boomers in the US who are inching to retirement (they hope) and have no memories of this kind of financial chaos. He points out that the last big recession was in the 70s, during the Carter years, when few Boomers had anything to lose anyway, and so sailed through it largely untouched. Back then, the inflation rate was 11%, unemployment was pushing 8%, recession hung over everyone like a fog that wouldn’t go away, and our parents were seriously hurting. Their world is one we don’t really remember.

They were going to the arts.

Today the Boomers have the same household financial worries our parents faced in the 70s. So it stands to reason that Boomer arts participation patterns should be like theirs.

In the arts, we should be checking up on the models from the 70s in marketing to today’s Boomer arts audiences. And we should be asking, “How did our parents afford the arts?”

Tickets and events were carefully planned and selected. Ticket purchases were budgeted into the monthly and year-long household budget – they were rarely spur of the moment impulse purchases, unless they were priced so inexpensively that they could be a guilt free treat. (The $3 movie packed theaters in the 70s.)

Arts going also involved checking out lots of free events – and free events generally did quite well as a result. Packed choral concerts. SRO chamber music on college campuses. Adventurous contemporary music, experimental theater. A lot of it was free, or close to free, and they sought it out.

Our parents were very discount responsive – the original coupon clippers! And they were very willing to save up for the big event in lieu of going for the sake of going, unless the deal was too good to pass up.

These are old concepts, but there are plenty of new applications from this to use right now.

Then, subscriptions were what saved you significant money and let you carefully plan in advance. Today, flex subscriptions need to save us with discounts just as deep, and with perks formerly provided only to full season subscribers. Series offering flex subs at the same time as full subs are finding happy customers. Boomers know full well that ‘tradition’ has dictated only giving full subscribers the best choice on tickets and the best treatment. Now, when organizations give them the same benefits and attention – and an understanding that their work schedules demand incredible flexibility – Boomers are more willing to make a plan and buy that multi-event flex subscription.

Special offers to these flex folks are winners, too. Quite a few organizations have found that it is better business to offer repeat customers 50% off (or more) event tickets to fill the house (and build loyalty) rather than perks such as restaurant discounts that had been in vogue in past years. When budgets are tight, Boomer arts goers want incentives to go to the arts! Focus on what they really want! This is particularly important for presenters and series that have product that just doesn’t stand out and grab Boomers. Presenters around the country report that this year these “nice” but not “wow” events aren’t selling. Boomers are saving up for the big event of the season, just like their parents did back in the 70s. So give them a break: let them get huge discounts on those nice events when they also buy the wow events. You’ll get them coming back.

So remember the 70s! As you plan, imagine Boomers who – like their parents a generation ago – are suddenly more frugal than frivolous, and more willing to clip a coupon than to overspend spur of the moment. And, like those folks in the 70s, they may not come as often, but they will be first in line for the tickets to the truly special performance. Treat them right, and they’ll become fans.

Cultural Planning in a Recession Economy

The days ahead look challenging for arts and cultural development. Does it mean this is time to stop planning?

It is the VERY time to plan.

Resources are tight.
There are tremendous shifts in financial systems and attitudes.
Priorities change.
Urgency to focus on successful outcomes is increased.

These are key reasons not to put off policy or cultural development planning in challenging financial times. With limited resources, we need to clarify absolute priorities for cultural development action, policy, and related funding. And, we need to listen to changed perceptions and attitudes from community leaders and residents.

What are some of the important tasks in immediate cultural development planning?

First, focus on success. We’re in for a very different number of years. What will success – a vibrant cultural community, healthy cultural organizations, engaged creative businesses, engaged audiences – look like in this different economic world? Don’t shape policies on staving off crisis. Shape policies for a new reality, and yes.

Next, focus on the key outcomes that need to be in place within the next 12 months if the successes you outline are going to happen. What are the policies, the programs, the support systems that need to be in place? These may be radically different from what are now in place, so be prepared for real changes.

Now, put resources where they will really make a difference. What are the two or three most important and substantive outcomes you have to see to get to success? Put your resources squarely behind these.

And, keep your eye on the long term. Position things now to be ready for opportunity when the financial world pulls out of its slump. Remember, cultural entitites and projects that have succeeded in the years sinc 9/11 were those that had planned and prepared during dark times so they could move forward as soon as confidence was restored.

Don’t stop planning. This is the very best time to plan.

The 5th P of Arts Marketing

All good marketers know the 4 classic Ps of Marking: product, price, place, and promotion. Today there is a very important 5th P that absolutely has to be added to the classic 4. What is it? Participation. And I don’t mean participation by buying a ticket, being in the audience, or entering the museum. I don’t mean participation as attending a talk-back after a play or a pre-concert lecture about today’s concert choices.

I’m talking about the P of participating pre-ticket purchase, and post-event dialogue. It is a marketing P that you have the power to control and use to boost revenues, increase audience size, and retain interest and loyalty. You can use it across all age groups, and it works just as well with first time single ticket buyers as with long time fans. And, it is a marketing P that you can utilize with no budget!

In this political season, who out there is immune from the adrenaline rush of on-line instant surveying, checking out blog posts, and responding fast and furiously to someone else who just logged in a comment? Harness these same tools for your arts marketing success. The more opportunities you provide for participation in advance of ticket purchase, and then after the event, the more you will keep the interest and loyalty loop working to your advantage.

There are three essential ways to stimulate pre-purchase and post-event participation.

1) Learning.
2) Dialogue.
3) Opinion.

Learning participation is what happens when curiosity is stimulated. Take the dynamic web content of the San Francisco Symphony’s Keeping Score. (www.keepingscore.org) Here, a series of separate web sites – each devoted to a single work of music or composer – all link to or flow from the Symphony’s main web site. Part of the Symphony’s larger multi-year project, inclusive of video documentaries, radio, and guides for teachers, it is a powerful demonstration of how effective it can be to immediately engage someone in learning. Even a first time visitor to the SFO web site can excursion into a great learning experience that leads back to a ticket purchase.

Web sites, email blasts about upcoming events, e-zines, and direct mail can all work toward the same goal of stimulating advance learning participation.

In addition to the multiple web sites option employed by the SFO, we like E-zines – a regularly scheduled “magazine” of content – that can be a powerful step up from simple email postcard reminders. Try alternating email and e-zines, or getting email patrons to click over to an e-zine. E-zine buyers will get more drawn in by participating in learning, and will be more motivated to buy tickets. Keep your e-zine-ing manageable. Don’t set an impossible schedule. Monitor your box office around e-zine release dates to find out what content, length, and style works best for your audience.

Dialogue participation is what your organization can gain through blogs, social networks, and community sites. A blog linked to an arts organization web site can create dialogue participation opportunities on a daily or weekly basis, with virtually no cost to your organization. Suddenly, you aren’t constrained by a static web site. Use your e-mailings and snail mailings, along with your website prompts and hyperlinks to move your audience/prospective audience right over to your blog. Use your blog, in turn, to stimulate dialogue. Ask questions. Facilitate discussion. Not everyone will go to the blog, and fewer will join the dialogue. But for those who are passionate, opinionated, or just want to weigh in, dialogue creates community, belonging, and ownership. Major corporations world-wide are using dialogue communities the way they used to use focus groups, gathering perceptions and advice they put to use in future brand, image, message, and even product development. Your organization can use the same technique for continuous research as well as a powerful affiliation-building method.

Opinion participation is the easiest and fastest way to stimulate ownership and investment. If your organization sends out emails or snail mails about upcoming events, you can – and should – be inserting questions on a regular basis. Post-event follow up is important, too. Keep the questions short and to the point. Don’t be afraid to ask “why?” Don’t go for a 15 page survey. Stick to a single topic, and a couple of questions – for example, focus on box office/admissions one time, on the event experience another. Remember that the goal is to gain the interest and involvement of people who are responsive because they’ve given their opinion. Thank them. Let them know you really use their input.

The outcome of these three approaches is an involved, more educated, opinionated, and caring audience member. It is increased ticket sales, increased frequency of attendance. It is word of mouth that translates into box office success.

Remember, build participation in advance of ticket purchase, and again after the event, to reap the rewards of the 5th P of arts marketing.

Recession, Loyalty and Frequent Attender Perks

With the back-drop of huge financial instability that is being felt by non-profits everhwhere, we just finished off an audience analysis study for a highly respected university presenter. They’d asked us to sift through data about ticket purchase patterns over the past four years to see what trends could be used to shape expectations of things to come. They know the economy is having real and dramatic impact on their revenues, but just how is the impact of a scary economy playing itself out? They wanted to know what to expect in the next six months or year of financial turmoil. What does it mean for marketing the arts?

We found some amazing trend data on what is happening right now, this season, that could be important to many presenters:

1) For this presenter, subscribers had always been able to pick the number of events they went to each year – a pick your own subscription package. We found that over the past two and a half years, the average subscriber had cut back the number of events they came to by 18%. That trend started last fall, and really can be seen with renewals from this summer.

2) The average size of the subsription party (household, friends going to the shows together, etc.) has shrunk by 8% from two years ago.

3) The single ticket audience has stayed more stable. The average number of events attended by STBs we examined has shunk by 6%, but the average size of the single ticket party, while down from a peak in 2007, has actually increased since 2005.

Subscribers who planned their season of entertainment while sitting at their desks and looking ahead to their finances basically have cut back their spending pretty dramatically, by shrinking the number of events they attend. They have also reduced the number of people in their party: someone has dropped out of the group of friends who always subscribed together, or a family member who used to come along stays home instead.

Meanwhile, single ticket buyers are still splurging, just a little bit less often. Their purchases are less planned, more spontaneous, and they reward themselves.

A lot of the volatility in the profile of lost/reduced subscriptions comes from households hardest hit by the economy. Those with the most limited discretionary spending – that includes households that have committed high levels of their budgets to mortgages and transportaion as well as middle and lower income households – are those that have basically dropped from subscription ranks or have cut back the most on frequency. But there is still good and consistent growth in single ticket sales among households not as badly hit, including renters and younger singles and couples.

One of the many take-aways from this is the importance of creating and rewarding loyalty, for subscribers and single ticket buyers alike. The secret lies in finding ways to get the single ticket buyers to come a little more often – just one more event – and keep their party size stable, while encouraging subscribers not to drop four events: give them back an event (or the equivalent) and then reward them again so they can add back yet another event.

Retail and the travel and hospitality industries are all racing to bolster their revenues through stepped up loyalty reward programs. They are forming cross-marketing strategic alliances that put real benefits in their consumers’ pockets. Holiday Inn just sent me a $50 spending card for Home Depot as an extra reward for staying five nights at various HIs last month, on top of the points I already get from them. You can bet I’ll keep booking rooms with them with tangible extra rewards like that! (They’re a terrific model. They have the highest ranked customer loyalty program in the hospitality industry.)

Imagine sending every one of your ticket buyers a loyalty card. (Or better yet, send them a post card to get them to sign up on line to get more of their email addresses.) Make it enticing and easy to get to the next perk level. Focus on getting them back for another event, and on making it easy for them to bring along another person. Then reward them, again, with another perk or benefit, maybe through a strategic partnership with a sponsor. (Let them choose between three or four different rewards/partner benefits. They get to choose what matters most to them, and you get valuable information on what motivates different households on your database.) Keep them enthused about your venue, so they don’t decide to spend less and just go to a movie at the mall. Give them better customer service as much as you can. And be sure to let them know what their loyalty means to you.

Do the math. It takes a lot less money to keep loyal customers and slightly enhance their current attendance than it does to get a brand new attender through the door. And everything you do to reward loyalty now will pay back over and over in the tough months ahead. Those rewarded and loyal attenders will tell their friends to go to your holiday events. They’ll use their reward points toward a pair of main floor center seats for a show in February. They’ll apply those points to bringing the kids for a family show in May. Suddenly, you have sold a lot more tickets. And when we pull a little out of the recession, your added bonus is that these newly rewarded and loyal buyers will be those who are the most willing to write a contribution check.