Replace them with memberships!
The first thought that occurred to me when all the performing arts organizations closed their doors for an undetermined amount of time in March, 2020 due to Covid 19, was that the title of my book “Standing Room Only” instantly became obsolete, at least for the foreseeable future. Filling all the seats in our venues, the long-standing goal of performing arts organizations, is suddenly an unrealistic dream, at least until a vaccine becomes widespread, and patrons, actors, musicians, singers, dancers and ushers feel comfortable returning to packed halls, busy lobbies, and public restrooms.
Under the current uncharted circumstances, the policies arts managers and marketers have cobbled together are rife with uncertainty. “Subscribe now for next season,” many have said since spring, with the disclaimer that they can’t ascertain when next season will begin, if at all. Furthermore, which productions will be staged may be subject to change at any time.
Retaining loyalty is the driving force for organizations to persist in offering subscriptions, the tried and true method that has been the go-to number one ticket sales strategy since the late 1970s. Actually, garnering new subscribers and retaining former ones has not been a dependable method for filling performance halls since the turn of this century. At most theaters, symphonies, dance companies, and opera companies, subscriptions have been declining annually and arts marketers have had to focus their efforts on selling single tickets and other alternatives to subscriptions.
In my books “Standing Room Only” and “Arts Marketing Insights,” I described the many ways in which subscriptions are far more beneficial to the performing arts organization itself than to its patrons. Critically important now – as always — are the economic benefits. Subscribers provide the organization with guaranteed revenue, which is often paid many months in advance of the season. This early revenue stream helps the organization maintain a cash flow for ongoing expenses. Subscribers require much lower marketing expenditures than single ticket buyers. Analyzing the lifetime value of subscribers clearly indicates that over time, the costs of attracting and retaining subscribers are low, and importantly, a huge percentage of donations derive from subscribers. Furthermore, single ticket buyer attitudes and behavior do not support the best interest of the organization. Single ticket buyers typically attend only the biggest hits of the season. For the esoteric shows with limited appeal, for productions without big-name performers and/or writers/composers/choreographers, reliance on single ticket buyers often means playing to halls with too many empty seats. Not only does this hurt the organization financially and morally, but it also deprives it of the opportunity inspire and educate. Through repeated exposure to a variety of offerings, people develop a rising threshold of repertoire acceptance and enjoyment.
Despite their many benefits to the organizations, subscriptions present some significant limitations. The thought that “I might not enjoy this” undermines the perceived value of a subscription to potential patrons. As a result, a subscription program tends to work best with “safe” repertoire – repertoire that is within the range of people’s expectations. Subscribers expect the works to fall within a certain stylistic range; they don’t want their avant-garde theater to perform traditional productions of the classics and vice versa. This point may be especially poignant in our current climate, as young people tend to be much freer about what activities they are willing, even eager to do. So organizations may welcome the option of choosing repertoire that appeals to younger people, which may be different from what has been planned already for the upcoming season.
Some people are willing to pay well in advance for an entire season of performances and support an organization they believe in – as long as they receive benefits of value to them. Traditionally, the benefits of greatest value to subscribers are seating priority, ticket exchange privileges, and discounts. In heavily subscribed organizations, people work their way up to their preferred seats over a period of years. Some subscribers who consider dropping their subscriptions for a season or two do not do so because they are afraid of losing “their” seats. Ticket exchange privileges at no cost are typically available to subscribers, an important benefit since they purchase their season of performances long before they know their travel plans or other events that may conflict. The discount is one of the most common promotional instruments for selling subscriptions because so many people are drawn in by a bargain, even if they can afford a higher price.
People who subscribe report that they like to plan in advance. But in recent years, many people have been attending less frequently and are buying smaller packages or single tickets. For some, this is because they have become more spontaneous in their lifestyles or have difficulty scheduling in advance. Research shows that the majority of former subscribers say that their primary reason for no longer subscribing is that they prefer to select specific programs to attend. Based largely on this ever-more-common preference over the past two decades, a huge percentage of arts organizations around the United States have grappled with declining subscriptions and the need to work harder to attract more single ticket buyers.
The good news is that there are other ways that people can demonstrate their loyalty to an arts organization beyond subscribing. Subscription is just one type of customer relationship and it is clear, especially in our uncertain times, that organizations need to build value both for the organization and its patrons around other kinds of marketing relationships, particularly those that reward loyalty without a large commitment. A serious concern about shrinking subscriptions is that many fewer single ticket buyers than subscribers make donations to the arts organizations they attend. As it becomes more important to garner donations from occasional ticket buyers, marketing and development must work together to develop and implement strategies that will maximize both return visits and contributed income.
Enter memberships. A membership plan is flexible in ways that subscriptions are not. Rather than committing to a certain number of performances and dates per season, members pay an annual fee that makes them eligible for a meaningful discount on tickets to individual performances of their choice and for the opportunity to purchase tickets in advance of the general public. The membership concept gives people a sense of belonging and provides them with a range of benefits, without requiring commitment to specific programming, program dates, or frequency of attendance. This option is highly attractive to patrons because the initial expenditure can be quite low – depending on the membership level – and the cost of membership is often “paid back” with the purchase of lower priced tickets. A variety of membership levels with varying benefits can encourage patrons to join at higher levels, as donors have always done.
Memberships are also highly attractive from the perspective of administrators and artistic directors. The subscription system can be too constricting, as management does not want to close a popular play simply because the next subscription offering is scheduled to begin, or to keep running a poorly attended show. Similarly, management does not want to limit the organization – especially theaters – to the number of productions planned to accommodate a subscription schedule. Furthermore, memberships allow the organization to broaden its offerings in order to attract a more diverse audience. Because members select which shows to see, audiences at individual performances tend to be noticeably more engaged.
Lincoln Center Theater (LCT), established in 1985, began by offering a traditional subscription, for the same reason that so many not-for-profit theaters do: subscription was for decades a tried-and-true means to build audiences and gain financial security from up-front ticket income. About 5,000 charter subscribers joined, filling most of the available seats for a modest two-play season. However, it soon became apparent that it was not enough for LCT simply to fill seats. In 1987, LCT discontinued its traditional subscription series and pioneered membership offers. There were some angry subscribers from the first two seasons who hated losing “their” seats, but most subscribers converted to member status without incident. Because members do not buy tickets to every production, LCT felt it could safely enroll may more members than it could subscribers. When a production is highly popular, its run is extended to accommodate more people, something that cannot be done with a subscription series. LCT undertakes various strategies to attract nontraditional theatergoers to their plays, especially with production-specific audience outreach through highly targeted media and in specific neighborhoods. There is a modest annual fee for membership; members have the right to purchase their tickets before the general public and for a much lower ticket price. Quite a few members say that the low ticket prices encourage them to take risks and to see some plays that they might not otherwise choose. Whether or not they like every play they see, the fact that it was their choice and not determined for them as part of a subscription package leaves them with a better feeling about the experience.
During our challenging Covid era, memberships are the ideal way for performing arts organizations to build loyalty, garner upfront income from the membership fee, but still allow patrons to be spontaneous in their ticket purchase decision. Memberships resolve the quandary for eager but reluctant patrons: What if I am feeling ill? What if I don’t feel comfortable going into the venue due to a surge in coronavirus cases in the area? What if a performance – or season — has to be canceled? Memberships allow for the utmost flexibility with no financial risk, other than the membership fee itself, something that patrons are happy to pay to help support the organizations they love and want to help them to thrive — and survive.