Research we Need (in Marketing the Arts)

Its time to notch up the science behind marketing the arts. Are your brochures tuned to elicit real responsiveness? Is your web site similarly tuned? Your post cards? Your promotional flashes in any form? Have you used consumer research to maximize your promotions?

I’m constantly surprised by inadequate visuals and graphic elements that are used to sell the world’s most visual and emotional of all products – the arts. My guess is that a lot of the poor field-wide promotions are due to: 1) A reliance on in-kind design or a utilization of lay graphics teams; 2) A lack of belief in marketing as a science, and as such, a portfolio of proven approaches that WILL make a difference if correctly used.

I’m happily posting a link here (see below) to the expert writing of Jean-Pierre Lacroix, President and Founder of Shikatani Lacroix and author of (among other booiks) The Blink Factor (1990), a book that has been on the “favorites” portion of my book shelf since it was published.

In his recent white paper on promotional packaging, Lacroix shares some critical elements of consumer responsiveness that will benefit any arts promotion. For example, he writes that “while consumers typically read from left to right, top to bottom, the research indicates that words are recalled better if they are perceived from the righthand side of the individual, or in the case of packaging, the right side of the face panel. Pictorial or non-verbal cues are more successful if coming from the left-hand side. Brain laterality will only affect material on the outer sides of the pack. There is no evidence of laterality for centralizing elements of packaging.

“In addition, based on other packaging studies, 40% of all communication consumers absorb is visually
oriented, and 80% is driven by the use of color and shape. These insights support the need for
promotional packaging flashes that complement consumers’ absorbtion of information, leveraging how
information is viewed and retained.

“For some packs’ copy, such as brand name or flavor description, it is important to enhance recall and
research suggests that these elements should be placed centrally or on the right-hand side of the pack.
Pack flashes function as pictorial devices despite containing verbal elements, and therefore should be
positioned on the left hand side. Nearly twice as many respondents who saw a promotional flash on the left-hand side of the pack were able to correctly recall the promotion. In addition to its visual effects, packaging also communicates its shape, size, weight, and texture through its tactility.”

Go read the balance of his white paper. Sure, he is writing about cereal packages and how we as consumers make choices as we move through grocery stores. But our field needs this level of detailed examination concerning consumer responsiveness to all sales and promotional materials.

And, by the way, think of testing your promotional materials even when you adhere to the level of science Lacroix describes. When was the last time you used a focus group or consumer panel to evaluate prospective responsiveness to your marketing and promotional materials? Can you be sure you have created materials that enhance recall, that ensure positive response, and that keep yoru targets from wandering somewhere (some other art/entertainment) else?

How many thousands of dollars are you betting on your next season? Can you risk all that expense, and all that revenue to anything less than research-based marketing?

http://www.sldesignlounge.com/wp-content/uploads/2009/11/PromoPackaging.pdf

Invest in Arts Marketing: Its Your Future

Let’s say this clearly: it has never been harder to create, build, and maintain an arts audience. There has never been more attrition, lower retention, more ways needed to connect, more prospecting needed, to more numbers, to derive small incremental gains. Toss out yesterday’s level of investment. Take it up x 4. Or x 10.

There are more and more reasons not to attend, to walk through the doors, to sit and interact with the art on stage or with the art on the wall. The economy and lack of discretionary dollars, fragmentation in our lives and interests, inertia, lack of social connectedness with others in the audience or on stage, lack of time, lack of intellectual curiosity, lack of winningness to invest in the metal state of emotional and intellectual response and reflection that art demands of us. And, not to forget Shanon from Arizona’s comment in response to my last blog – the complete and utter self absorption that comes with endlessly customizing earphones/text/screen handheld/Twitter/Facebook to reinforce self rather than encounter with minds open to exploring the different and other that is art. She’s talking this problem v/v high schoolers, but it increasingly pervades all generations. It may be that new media’s foundational concept of 24/7 self-absoption is the greatest challenge that arts participation warriers have ever faced.

I think of the monster challenge, then, that is what arts marketing now faces every day, and the level of investment that HAS to be made to find, prospect, emotionally connect to and then retain audiences.

A couple of weeks ago, I concluded a year-long consultancy with a fine Canadian theatre company, during which we created marketing systems, tested them through fire, and evaluated what should last. They did significantly increase their audience count, but didn’t reach their revenue goals because it cost more than planned, and they needed more discounting tactics to get people in and back in the door than they planned. It left the board and staff collectively saying “it was so hard, so expensive, took so much time….was it worth it? Is this our future? Are you SURE there is no other way than a lifetime commitment to marketing at this level?”

Yes, yes, and yes. It will cost more, require more prospecting with lower returns, take more back office time, and be ever more strategic – requiring more and more organizational skill. It will be less fad, more investment. It will grow from detailed ROI projections, detailed Lifetime Value calculations. It will be more investment in the pipeline – constantly ensuring a stream of newcomers to enter the door, and then winning them back. It will be much more releationship marketing to build that return. It will take nothing for chance.

Today, we are marketing to the cultural market of one. It takes a lot of investment to find and connect to that “one,” to keep and nurture that “one,” so as to eventually realize the continued support of that “one.” Today there are hundreds of niche arts and cultural audiences and interests: no single “arts-interested potential audience.” Realizing this, and aligning your organization’s investment accordingly, will position you to gain the one-by-one audience growth that is the arts future.

Ignoring it is…denial.

A new way of looking at market segments

Grab a copy of this month’s Harvard Business Review. The lead article, How to Market in a Downturn
by John A. Quelch and Katherine E. Jocz, both at Harvard Business School, takes a look at consumer behavior in downturns since the 1970s. And as they point out, consumers never totally stop buying. They become more careful, more selective. But they still consume. They still come to the arts, but they consider their choices carefully.

And, in a recession, market segmentation takes on a whole new meaning. Quelch and Jocz have taken all the demographic and lifestyle clusters that exist out there and condensed them down into four segments:

The Slam on the Breaks segment. This group includes the hard hit, the unemployed – everyone whose world is upside down.
The Pained by Patient segment. The authors call this the largest consumer group in the US right now. Economizing, cutting back, but still doing and going. Carefully investing in whatever they purchase. Probably really looking for bargains.
The Comfortably Well Off cohort. Sure, this includes the upper 5%. But more importantly for the arts, this includes the carefully invested retirees who continue to have the resources to go to the arts.
The Live for Today group. Hey, they never had any savings anyway, so why change?

The authors point out that all four groups spend. Each spends on essentials that “are necessary for survival or perceived as central to well being.” For many, arts, cultural activity, and a way of weaving joy into life is central to well being. That’s a powerful offering that the arts have always had, and it is the message that people will best respond to right now. Anything that is an ‘indulgence’ is probably not going to be purchased right now. Anything that is the same old-same old can be put off for another season. Anything that is unjustifyable – an over the top ticket price, for example – may be looked at as expendable.

The authors point out that all four segments will be responsive to strong brands and good loyalty marketing, so that marketing can be extremely important right now. As they note, companies with excellent brands, like Johnson & Johnson, maintain high stock values through recessions based on continued brand-responsive consumer purchases. So, if arts-lovers can only spend on one event, or on one organization – make sure its yours they trust to offer them outstanding art experience.

Be sure your organization has the resources to market your best strengths. The authors recommend dropping programs/products that just can’t make it no matter what in favor of putting more resources into your core that will attract the most loyalty and new attenders. Focus on strength.

I also think there is great power in responding to the absolute need of the Slam on the Breaks folks. Put any resources you can into opening doors for those who can’t afford art any more. Last week, I was in Canada working with a group that noted the power of offering blocks of tickets at the local food bank. No one needs to know who gets the tickets there, or how large a share of the audience comes through that door.

Good News on the Horizon: Research from other sectors

A big part of what I do is bring trend information to the table for clients. I look beyond the arts to other sectors that can guide us. Today’s good news comes from Commercial Property News, a publication I regularly comb for trends regarding cultural center development, arts facilities in mixed use development, and even the trends witnessed by retailers who are the prime tenants in commercial properties.

This week’s issue focuses on a new study by RREEF Research, which is a highly regarded property research company, in this case through a study they did for Deutche Bank, on trends in US commercial real estate.

1. They see that the decline in sales of commercial properties will halt by mid summer, and that we will start seeing upturn by the last quarter this year.

2. Vacancies will decline by the start of 2010.

3. Neighborhood and community centers will be the first to start doing better.

What does this mean for our field?

1. Be ready. Those projects that you may think won’t be forthcoming may be just timed right for investment. Construction costs are lower by far than they were, and good deals can be found. Timing is great.

2. If yours is a community center mixed use venture, you should be working now to line things up. Developers will be ready to move by the last quarter of this year.

There’s one other interesting finding here. CPN reports that the “luxury goods” retailers will be among the first to see the uptick by the end of this year. I look at that and think that your subscription ticket sales next fall may be better than we could anticipate right now. A week ago, when I read that the Chicago Art Institute was increasing its admission prices to $18 come May, I thought it was not such good timing. But they seem to be right in line with this report of pent up demand meshed with a bit more expendible money. All in all, a good read of tea leaves that gives new energy to us all as we look to next season! Let’s banish fear, and get to work.

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.

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.

The Incredible Shrinking Suburban Audience