Value is a key concept for audience engagement and loyalty building. Let’s consider value — both from the perspective of the patrons and the perspective of the organization, and then draw conclusions about how to better align the value proposition. What do our patrons value? People value attending a play, a concert, an opera, or a dance performance that moves them, that they find stimulating, memorable, interesting, well-performed, informative, familiar, new, a great opportunity for socializing, an important place to be seen, and more. People value convenience: convenience in purchasing tickets, convenience in getting to the venue and parking, convenience in ticket exchanges, or other issues that may arise. People value sharing the experience with others; the social aspect is often critical to attendance. People value getting good seats. In my experience, the top-priced seats sell the best at most venues. What do subscribers value? The most important reason patrons give for subscribing is to be sure to see all or many of the shows in the season; the second most important reason is to guarantee good seats. The distant third benefit to subscribing, according to all my research, is lower pricing. Do people value discounts? Sure. Everyone likes a bargain. But, if we regularly discount from the “regular” price, do people think they are getting a bargain? Do they think the experience won’t be worth more than the discounted price? Do they think the “regular” price is artificially inflated? When we reduce prices, are we suggesting to our potential ticket buyers that the show we are promoting isn’t worth the full price we attach to the ticket? Our prices serve as indicators of the value we attach to an experience. Oftentimes, people can’t actually place a monetary value on an experience until it they have consumed it. Do arts attenders consider that seeing a certain play is worth $40 to them, but not $50 or $60? People who are financially constrained may set a limit as to what they will pay for a ticket. But most arts attenders, who are typically price insensitive, seek out discounts not because they wouldn’t buy tickets otherwise, but because they feel they’ve overpaid if they pay the full price. I fear that with all the discounts being offered (buy early and get 10% off, take advantage of this limited-time price offer and get 25% off, get 2 tickets for the price of 1, etc.) we have trained people to wait for the discounts. Furthermore, organizations typically offer subscribers – the most loyal attenders – significant discounts. In my consulting work, I typically suggest that we eliminate or significantly reduce subscriber discounts. Upon implementation of this recommendation, the number of complaints or loss of subscribers has been negligible. There are many situations where discounting is not only appropriate, but is a very effective strategy for meeting the organization’s goals. I have discussed discriminatory and dynamic pricing in depth in the pricing chapter of “Standing Room Only.” However, the pervasive use of discounting erodes price trust and devalues the product. Patrons want to be valued by the organizations they attend, but do they require discounts to value the organization and its offerings and feel they are valued in return? What do organizations value? Organizations value attracting new attenders, retaining the patrons they have, and building repeat visits over time. Organizations value patrons who are interested, passionate, curious, loyal, forgiving (when those not-so-great shows happen), patrons who bring friends and family, and patrons who support the organization emotionally and financially. Are people likely to donate when they assume the organization does not have a pressing need for the money because it is offering tickets below the stated price? Some pricing consultants say that discounting builds loyalty. Do they mean that lowering ticket prices helps to increase repeat ticket sales? Have they tried other methods for increasing sales than relying on pricing strategies? Has anyone studied donation levels among those who regularly purchase discounted tickets? Pricing too often takes the center stage away from the art itself. Often, we don’t communicate the true value: the art, the experience, the uniqueness. Says art consultant Andrew McIntyre, “Perceived value is established by persuasive communications. Arts organizations’ communications are frequently not persuasive enough. . . And reducing the ticket price until it matches the lowered perceived value seems like a lazy option to me.” Aligning values Aligning values means, of course, that the organization needs to adjust its strategies and programs to more closely meet the interests and preferences of its current and potential audience members. The organization is relatively easy to change; our patrons rarely change their behavior or attitude because we encourage them to do so; they change according to their personal values and their experiences in the larger environment. Loyalty building in arts organizations is not achieved through discounts. People value stores like Walmart for their low everyday pricing. But the products available at Walmart can be bought elsewhere at higher prices. People cannot buy the art we put on our stages anywhere else! Patrons do not value our organizations and their offerings because the tickets are less expensive than the theater or symphony down the road. And we will never be able to reduce our ticket prices enough to compete with high tech options for entertainment. Yes, people want benefits from the organizations and businesses they frequent. Let’s give them benefits that are mutually valuable to both the patrons and the organization. Let’s use a loyalty point system like the one I described in my previous blog. By giving people very low cost tickets because they earned them with repeated ticket purchases, we are giving our patrons more of the performances they value. By doing this, the organization is benefitting by getting more people back in the hall more frequently, thereby building involvement and more likelihood for making contributions. Build loyalty by giving people more of what they come to us for: great performing art experiences! What could be better or more effective?
Given that subscriptions have been eroding in the performing arts industry for a decade or more, there is a strong incentive for arts organizations to identify a new marketing tool to help encourage repeat visits, trial of unfamiliar programs, and eventually donations.
We are all familiar with the so-called loyalty point systems that are pervasive in so many industries. My favorite local pizza spot offers one free pizza after 10 are purchased; the nearby nail salon offers one free service after 10 visits. The airlines often make it so difficult to redeem miles earned and thereby create bad feelings with their customers, so I prefer not to include the airlines’ plans as a good example in this discussion.
Consider this loyalty plan for arts organizations. All current patrons – subscribers and single ticket buyers alike — should be automatically included in the plan, and new ticket buyers should be signed up concurrent with their first ticket purchase. This plan is for everyone. Each organization should set its own parameters regarding the number of points earned for various purchases and the number of points required for greatly reduced price tickets. As an example, offer $10 tickets to any performance, given availability, with 50 points; $5 tickets for specific dates, times, or less popular productions with 40 points; $10 tickets to bring guests for a determined number of points, and so on. I do not recommend giving free tickets, since that will create a problem of no shows; people value what they pay for, even it is a token amount. Benefits other than those that are price-related can also be offered, such as special events with performers in attendance, an invitation to the “green room” during intermission or after a show, and so on. Be creative! Most importantly, find out what your patrons would value.
The quantity of points earned can vary according to several factors. The first factor is the price paid, so that people who purchase higher priced tickets can earn more points. Secondly, the number of points given should be increased as people make repeat purchases over time, so that subscribers and, for example, people who purchase tickets to six shows over three years benefit from long-term loyalty points, or cumulative points. These repeat visits can serve to increase the number of points earned for subsequent ticket sales, so that, say, someone who has earned 25 cumulative points will now earn bonus redeemable points with each additional purchase. Cumulative points will continue to build over time, while redeemable points earned, based on price or other incentives, will be used up as they are redeemed.
With a point system in place, arts organizations can offer bonus points rather than discounts to stimulate sales. Instead of “training” people to wait for discounts to buy tickets, as many arts organizations presently do inadvertently, we can “train” them to earn extra points, which will eventually translate into special offers as a reward. This will keep people coming back for more, and will encourage them to buy directly from the organization’s website or box office since points cannot be earned through third party ticket providers (read: discounters).
One of the biggest problems in the performing industry is that a huge percentage of people who come once do not buy tickets again. Shall we offer a significant number of bonus points to first-time ticket buyers as a strong incentive to come back?
The only possible downside to such a program is the cost of administering it, because the plan cannot be as simple as the punch card or coupon at the local pizza parlor. Accurate, timely records must be kept and all patrons should be able to access their account online to track their redeemable and cumulative points.
According to Gene Carr, CEO of Patron Technology, the financial requirements for arts organizations to manage a point system are minimal. Says Gene, a point system is “not expensive — just complex because you have to manage the points, and the rewards, and market the rewards… so it’s just work.” Of course, we have to pay people to administer all the details. But if we are reducing our discounts significantly, so that we are earning more per ticket sold, and we are building loyalty, thereby selling more tickets over time and possibly garnering more donations, these costs in time are likely to be a very worthwhile and minimal investment for the organization.
Can you think of a reason why this should not be the next wave of loyalty building for arts organizations?
NOTE: In a recent blog, I included an extensive article written by marketing staff members at Piccolo Teatro di Milano, one of the top theaters in Europe, about their loyalty plan, from which I heavily borrowed in this blog. Please refer to my previous blog entry.
In my experience, one of the finest theaters working today is Piccolo Teatro in Milan, Italy. Piccolo Teatro does superb, interesting, varied work artistically, and this artistic product is most capably supported by a strong, forward-thinking managerial and marketing staff. Those of you who have read my new edition of “Standing Room Only: Marketing Insights for Engaging Performing Arts Audiences,” know well from the brief Piccolo Teatro case studies I included, how much I respect the creative and highly effective marketing work being done there.
I am most grateful that Lanfranco Li Cauli, head of marketing, and his colleague Gianni Pisano, offered a very detailed description of their new loyalty program to be published on my blog. This loyalty program applies to both short and long term attenders, to both subscribers and to single ticket buyers. This program is an adaptation and improvement over the theater’s former point-based loyalty program: the Piccolo Card.
According to Lanfranco and Gianni, the plan to upgrade the Piccolo Card provided the opportunity to rethink loyalty in a new way, maintaining the idea of a “special relationship” without requiring any particular or binding upfront commitment, cost, or annual fee. Rather it guarantees a new form of on-the-go recognition and reward system. The Piccolo Card is by no means intended to be a replacement of traditional subscriptions and the loyalty they generate; rather it is designed to stimulate the curiosity of new audiences and open new “loyalty paths.”
One feature I find refreshingly unusual is that the Card’s benefits do not expire; they can be used in future seasons, unlike most offers with which we are all familiar. We marketers ask our patrons to be with us for the long term, so our offers should reflect the long term as well.
The description of Piccolo’s loyalty program below is quite lengthy, but I thought it best to include it unabridged so those of you interested in the approach can read about how it evolved and the policies developed for its implementation. The central element of this plan is described in the section entitled “One card; three levels.”
If you have any questions or comments about Piccolo’s loyalty program, please comment on this blog site, email me (firstname.lastname@example.org), or feel free to email Lanfranco directly at: LicauliL@piccoloteatromilano.it
The New Loyalty Program at Piccolo Teatro
Lanfranco Li Cauli and Gianni Pisano
The marketing strategy of Piccolo Teatro di Milano has always strived to guarantee and continuously improve accessibility, rendering it as wide-ranging and as complete as possible for both current and potential audiences.
In order to meet the many and varied requirements of constantly changing audiences, Piccolo Teatro has drawn up a multilevel marketing mix which includes a combination of traditional, ever-necessary communication activities (such as billpostings, local and national printed press advertising, radio commercials etc.) and the most up-to-date cutting-edge digital marketing tools available (analytics, social media advertising, mobile apps etc.). Through these instruments, Piccolo Teatro is able to promote and broadcast the varied nuances of the Piccolo brand identity via an ever-growing set of channels. Piccolo Teatro’s subscriptions haven growing steadily, from approximately 20,000 subscribers in the 2006-2007 to more than 23,000 subscribers in the 2014-2015 season. This is the best possible confirmation of the theater’s deep-rooted bond with the city and the territory of Milan.
Among the newer instruments aimed at building and maintaining audience loyalty, last season Piccolo Teatro launched a new version of its classic point-based loyalty program: the Piccolo Card.
In 2008 Piccolo Teatro released the first version of its point-based loyalty program, the Piccolo Card, named after the theater’s original e-commerce site (www.piccolocard.it), which was created with three main objectives in mind: 1) to redirect traffic and audiences from the traditional box office to the homonymous website, in order to 2) increase online sales and 3) award customers with benefits beyond simple and somewhat expected discounts.
The original loyalty system had a relatively simple mechanism. Personal cards were given to customers free of charge with their first season purchase. Each card, linked to the customer’s email address, collected points which could be exchanged for specially discounted tickets online. For each single ticket purchased, customers were awarded 1 point, and they received 4 points for the first season subscription. Ten points entitled the cardholder to a €5 promotional ticket available online for all available performances. The system allowed the users to choose when and how to spend their points, including the possibility to use them for subsequent season shows. As they were used, the ten points were subtracted from the patron’s card. The cards also entitled the holder to a 10 percent discount at the venue’s coffee shops. This system ran for six seasons until it was closed in September 2014. It was upgraded to a new version called, accordingly, “Nuova Piccolo Card” (the New Piccolo Card). The new loyalty program was almost one year in the making, between planning, testing and launch stages.
Preliminary analysis and considerations
Taking into consideration the weaknesses (e.g. a static system) and the strengths (e.g. e-commerce orientation) of the previous Piccolo Card experience, the objective of the new concept was to construct a more articulated mechanism and create an engaging online environment. In the winter of 2013 a benchmark analysis began for the purpose of examining the most important theaters internationally and their fidelity and membership programs. The results were merged with findings and results obtained from the analysis of other loyalty strategies carried out by Italian companies in many other fields (e.g. transportation, communication and energy) in order to have a broad as possible a picture of the public’s expectations of an updated point-system for 2014.
The first brainstorming sessions produced two basic ideas. The first is quantitative: rewarding customers with points according to the category of the show/performance purchased; the second is qualitative: developing a loyalty path with more than one level of fidelity and progressive benefits designed to lead spectators to develop new form of rapport with Piccolo Teatro.
At this time, Piccolo Teatro was the only Italian performing arts organization running an articulated fidelity program capable of responding to such requirements as to be considered a true benchmark. Therefore the relative analysis focused primarily on US and UK theatres and cultural centers, although it was soon clear that a one-to-one comparison with American and British performing arts scenarios was not really possible. The Anglo-Saxon systems were more focused on membership and patronage and did not easily correspond to the Italian scenario, historically based on subscriptions.
Regular and loyal theater attendance in Italy has in fact been traditionally bound to the idea of subscription: a season ticket paid in advance which provides a set of passes, or tickets, which are individually discounted according to the type of subscription. Over the years, subscriptions have attracted a well-defined traditional or loyal audience, happy to commit to the theater beyond individual attendances. This type of audience has always been of extreme importance to Piccolo Teatro, so much so that subscriptions generate over one third of total ticket sales. (Subscriptions come with a number of benefits principally focused on the performances themselves [such as priority booking, privileged seating, dedicated email support, 20% discounts in the book and coffee shops] rather than on collateral activities or special acknowledgements such as memberships and patron-based recognition.)
The upgrading of the Piccolo Card therefore provided the opportunity to rethink loyalty in a new way, maintaining the idea of a “special relationship” without requiring any particular or binding upfront commitment, cost or annual fee, by guaranteeing a new form of on-the-go recognition and reward system. The Piccolo Card is by no means intended to be a replacement of traditional subscriptions and the loyalty they generate; rather it is designed to stimulate the curiosity of new audiences and open new “loyalty paths.”
A new point system
The New Piccolo Card is now 100% virtual; physical cards are no longer automatically provided. (Cards are produced at the box office at specific times on request only).
Each “card” is associated with the customer’s email address and nothing has changed in terms of usability for customers used to purchasing online via the Piccolo website (www.piccoloteatro.org). As patrons log in, in order to complete the first purchase, the system automatically “creates their Piccolo Card (which is now essentially a code). From that moment onwards, it is possible to start earning points.
The connection between online and offline sales has also been improved. Spectators can in fact now give their email address when purchasing in person at the box office or by phone: subsequent access or registration to the Piccolo website with the same email address will allow the allocation of the relative points. Points can still only be used online in order to obtain €5 promotional tickets. However, as will be demonstrated in the following section, a significant change has been made in terms of point allocation and particularly in how points can now be used.
In order to make the Piccolo Card mechanism more exciting and dynamic, it was initially decided to provide a different amount of points per individual purchase. The idea of a direct relationship between ticket cost and points awarded was immediately discarded as this would have created more confusion than involvement (Piccolo Teatro has more than 20 different ticket tariffs). An indirect but much more effective solution was to use the names of the Piccolo’s performance categories: Festival, Produzione, and Ospitalità. International shows, hosted every season by Piccolo in the Festival category, represent around 20% of the total season programming and are available at the highest tariff (€40 for the stalls, €32 for the balcony), therefore all Festival tickets earn the highest number of points (3). Piccolo Teatro Productions (Produzione) represent approximately another 20% circa, and Italian guest shows (Ospitalità) the remaining 60%. The price of tickets is the same for both categories (€33 -€26), but a necessary distinction was made between the two categories in terms of points, awarding the first with 2 points and keeping the second at 1 point.
As previously mentioned, points linked to subscriptions were also significantly increased. The amount previously awarded (4 points regardless of the type) was maintained for the simpler and least expensive form only (Quartetto, 4 tickets with a limited choice of shows). With the New Piccolo Card, the higher the level of subscription (in terms of cost and number of tickets included), the more points are awarded, up to a maximum of 10 (i.e. Passport Oro, 16 tickets, unlimited access). Moreover, the previous rule that prevented customers from earning points on other subscription purchases during the same season has been removed. Even small or gift subscriptions (2 tickets, limited access according to type) can now earn points as well (from 1 to 3) in line with the marketing strategy and objectives.
Piccolo Card special point-promotion
A brand new feature is represented by the promotion of specific performances using associated point rewards as leverage. The Piccolo website has always run an online dynamic pricing system which can raise or lower prices for each individual performance, according to sales trends and expected attendance. Since the 2014/2015 season began, the Piccolo Card allows the promotion of specific performances by increasing the number of points earned on purchase, in addition to traditional dynamic pricing strategies.
Online promotional ticket
To balance the increased rate of points earned, the €5 online promotional threshold was adjusted from 10 to 15 points. Simulations demonstrated that this would be an effective ratio, keeping the system similar to the previous version while justifying the higher point “cost” of the ticket with the higher average speed in earning points.
This new point system has been optimized to last for three seasons (until June 2018).
One card, three levels
The most important change in the Piccolo Card philosophy is in the way that points are considered and in the adoption of a multi-level loyalty structure, which aims to better reward ticket buyers over the long-term.
The previous system did not sufficiently take into account how many times the user purchased tickets and attended performances at Piccolo, thus it did not consider how many points each user has accumulated in total over time, since the first login and registration. As a consequence, after a few seasons, the system proved to be ineffective in responding to relevant loyalty issues, given that, for example, two users with perhaps very different stories, behavior and relationships with the theater were fundamentally treated in the same way and were awarded with the same benefits.
Let us imagine that user A managed to reach the promotional threshold of 10 points after three seasons by purchasing his/her tenth ticket (The previous system awarded one point per ticket). In the same period, user B could have passed that threshold three or four times, having purchased a total of 30 or 40 tickets. Both users would have been entitled to the same benefit (one €5 ticket) which would have been unfair for user “B”, whose more frequent attendance and higher loyalty went unrecognized.
In order to correct this situation, Piccolo Card points now have two specific classifications: “active points” and “loyalty points.” Active and loyalty points are easily viewed as two totals that users can consult by accessing their account on the Piccolo website.
With the new system, as users purchase tickets, the number of points relative to the performances purchased is added to both the “active and “loyalty totals. However, while the active total works as before, increasing and decreasing as users earn points, reach the promotional threshold, and spend points, the loyalty total continues to increase. Points used for promotional tickets are not deducted from the loyalty total. Loyalty points relate to two dedicated loyalty thresholds, designed to enable the system to finally take account of frequent and long-term users.
These new thresholds mark the 3 new loyalty levels, named after well-known and easily recognizable areas of the theatre: Foyer, Platea (stalls) and Palcoscenico (stage). These names have been chosen to express the idea of a loyalty progression through common theatrical vocabulary.
The first level, Foyer, represents the entry level Piccolo Card assigned automatically with the first purchase, while the second and third levels are reached as the “loyalty points total reaches the two dedicated thresholds previously mentioned, set at 35 and 70 loyalty points respectively. As users buy tickets, both totals (active and loyalty) increase at the same rate until such a time as the promotional threshold is reached and the points earned are used to buy a €5 ticket online. At that moment, the active points are reset, while the loyalty point total remains the same, and continues to increase with subsequent purchases.
Once the loyalty point total reaches 35, each subsequent ticket purchased is awarded an extra point in addition to the standard points relative to the specific performance. Therefore Festival shows earn 4 points, Productions 3 points, and Guest shows 2 points. Similarly, Palcoscenico cardholders, having reached the loyalty point threshold of 70 points, receive two extra points in addition to the standard points (Festival 5 points, Productions 4 points, and Guest shows 3 points).
Thus if we now compare user A and user B from our previous example, thanks to the new Piccolo Card system, user B (having earned more than 35 points) would be awarded with a new loyalty level, consequently earning a permanent benefit on future purchases, a recognition of his/her status as a more loyal spectator, in addition to the standard promotional ticket. (Via their accounts users can easily see which Piccolo Card level they have reached and how much they need to earn to pass to the next level. They can also exchange their physical card at the box office for a new card which reflects the new level and status reached.)
In just six months (up to February 2015), the Piccolo Card attracted more than 13,000 cardholders, consisting of both single ticket buyers and season subscribers. This already represents almost half of the total Piccolo Card holders from the previous system up to the date of deactivation and reset at the end of the six-season period.
Over the next three seasons, before the end of the new Piccolo Card Program, an increase of 7% in ticket sales is expected through the point system/Piccolo Card as a result of a fine-tuned online rapport with our users, encouraging them to return and log in to Piccolo Teatro virtual venues.
What do single ticket buyers value? Whereas subscribers typically value seeing all the shows and getting the best possible seats, single ticket buyers give the highest rating to choosing exactly which shows to attend. They are willing to give up access to the best seats in order to have full choice of programming.
But like subscribers, single ticket buyers have busy lives. Sometimes they do not purchase tickets in advance since they are not sure of their schedule; sometimes they buy the tickets, then find cannot attend that performance for some reason. So single ticket buyers value a ticket exchange privilege too!
Many managers tell me that they don’t want to offer ticket exchange privileges to single ticket buyers since this is a subscriber benefit and is a hassle in the box office. Both of these concerns can readily be managed by 1) charging a higher fee to single ticket buyers than subscribers (if subscribers have to pay a fee at all), and 2) charging enough to cover the additional time required of box office personnel. I learned in my own audience research that many more single ticket buyers would purchase tickets in advance if they knew that the tickets could be exchanged. And respondents to my surveys reported that they are happy to pay a reasonable fee for this service.
Consider the benefits that accrue to the organization when it offers ticket exchanges upfront to all ticket buyers – and advertises this well so people know that long-standing policies have changed. With ticket exchange privileges, people will buy tickets as soon as they hear about a show that interests them. They are more likely to purchase tickets early, which is a clear benefit to the organization, rather than waiting and forgetting about the show or thinking they won’t be able to get decent seats later on. Also, with dynamic pricing, many organizations raise prices as the performance date approaches, making it more expensive for patrons who wait. With ticket exchange privileges, people will feel better about the organization, which now is clearly demonstrating that it prioritizes its patrons’ needs and preferences. This policy can go a long way toward building loyalty and commitment to the organization.
Historically, the final words that ticket buyers hear when placing an order are: “All sales are final; no refunds or exchanges.” Just imagine how wonderful ticket buyers will feel hearing instead: “Enjoy the show! If you find for any reason you are unable to attend this performance, your tickets may be exchanged for a small fee up to 24 hours before the performance for any other performance this season.”
Last month, while visiting another city, I purchased full price tickets to attend what I knew would be a superb ballet performance. I was eager to attend and although the tickets were costly, I didn’t hesitate to buy them.
The day after the performance, I received an email from the dance company with very interesting follow-up information about the performance I saw, including fascinating interviews with a featured dancer and a choreographer. This served to enhance my already fabulous experience with the company.
In the same email, I received an offer for 50 percent off tickets to another program that would take place in about two months. I had several concerns while reading this offer. Was the upcoming program expected to sell poorly, so that the marketers had to lure people to buy tickets at low prices? Are such low price ticket offers common, meaning that I may have overpaid for the wonderful program I had attended the previous day? (At the time of the performance, I thought the experience was well worth the money.) Would I consider paying full price in the future after receiving such a discount, or would I search for other discounts and only attend if I were able to “get a deal?” It occurred to me that if I lived nearby and considered subscribing, subscriber ticket prices would not be discounted as much as the offer I had just received. Why would I ever subscribe with these low prices available to me as a single ticket buyer? How is a patron to know what a ticket is really worth?
I subsequently learned from the dance company’s marketing director that a consultant who specializes in pricing advised her to offer a 50 percent discount to people who had purchased tickets one time, based on the fact that most people who come once don’t return. This situation is known in our industry as “churn,” and it’s one of the most serious issues arts marketers face. However, price is not typically the primary reason people do not return. More commonly, the issues are with the art form, the programming, or with people’s own busy schedules. It has been said by some savvy arts marketers that relying heavily on pricing strategies to grow the audience is reflective of laziness and is usually ineffective in the long term.
It is interesting (and curious) to me that the same ticket pricing consulting group that recommended luring new single ticket buyers to return a second time with a 50 percent discount later published the following in its own eblast: “Use subscriptions as a way to give your most loyal patrons the best access to the best prices. Non-subscribers should never (italics mine) get better prices than subscribers, even for low-selling events.”
I have found in my own consulting and research that subscribers are the most loyal attenders and are the least price sensitive of all ticket buyers. At some organizations where I have consulted over the years, I have eliminated subscriber discounts without losing any subscribers. I’m not sure that strategy could work well now that people have become accustomed to “getting a deal” and expect it, even if they consider the full price fair.
As for non-subscribers never getting better prices than subscribers, I think that the best way for arts marketers to think about discounting is to never say never. There are many opportunities for using discount pricing strategically and effectively, for long term as well as short term benefits to the organization. Discriminatory and dynamic pricing are covered in depth in my book: “Standing Room Only: Marketing Insights for Engaging Performing Arts Audiences.”
Finally and importantly, arts organizations need donations from single ticket buyers more than ever, as subscriptions continue to erode. It is difficult to make a strong case to single ticket buyers that the organization needs their donations when it is so readily offering two tickets for the price of one.
Watch this blog soon for a fascinating description of the new loyalty program at Teatro Piccolo in Milan, one of the finest theaters both artistically and managerially. Lanfranco Licauli, director of marketing and communications, has worked hard to create this guest blog which explains in detail their program which is geared to both subscribers and single ticket buyers.
Much that is being written about arts marketing concerns topics like leveraging social media, “tweet seats;” and dynamic pricing which has become the “hot” topic of recent years. I am concerned that while caught up in efforts to stay on top of these good trends, many managers and marketers are ignoring two critical factors that underlie all of our marketing: great customer service and building relationships.
I’d like to share a couple of personal anecdotes with you to make my point. (When my comments are critical, as they are in this blog, I will refrain from identifying the organization by name).
Last month, I awoke one morning with a low grade fever and a persistent loud cough. My husband and I had tickets to see an opera that evening. We are full season subscribers and I was particularly looking forward to seeing this production. I knew that there was no way I could or should go to the opera in my condition; I was feeling ill, I was probably contagious, and furthermore, my uncontrollable cough was certain to be disruptive during the performance. I phoned the box office as soon as it opened, explained my situation, and asked to change my tickets for another performance of the same opera. I was informed in response that exchanges could only be made 72 hours or more in advance, but I was welcome to donate my tickets back to the opera. I replied that I did not know 72 hours in advance that I would be sick, that I wanted very much to see this opera, and I definitely did not want to give up the value of those tickets, which were quite costly. After going back and forth several times on the same theme, the ticketing representative excused herself to speak with someone else. When she returned, she said she would make an exception this one time, but only if I took tickets for a performance the following Wednesday, the only day that seats were available. I told her that I would be out of town the following Wednesday, so that was impossible for me. Again, I faced resistance. But I wouldn’t take no for an answer. Finally, after more haggling, she offered me seats for my requested date, and they were in an excellent location; in fact they were better than my subscription seats.
I understand that arts organizations create rules – usually for a good reason. In this case, I assume the rule was created because organizations often get stuck with tickets that are exchanged on short notice. But how much of an upside is there to enforcing this rule when there are so many downsides? What if I had gone that evening while feeling ill? That would have been a negative experience for me and for other people whose experience would have been disrupted by my presence. What if I had turned back the tickets to be resold? I would have lost out on seeing the fabulous opera and would have lost a lot of money in the process. Would I have been likely to make a much-needed contribution the next time the opera company came calling? (You can answer this one.) Would I have had good feelings going forward about this company and its policies, even if I love the artistic product?
We talk a lot about relationship building with our patrons. Those are not just empty words. A relationship is personal. Being personal requires breaking rules when it makes sense to do so. It also demands that we reach out to our customers according to the point of their involvement with our organization. Consider these two examples of other situations I faced in 2014.
I purchased two tickets to a theater four days in advance of the performance I was attending. The day following my purchase, I received an email offering 30 percent off the ticket price for upcoming performances, but the offer excluded previous purchases. I understand that the theater uses strategies such as this to stimulate last minute ticket sales, but in this case, the offer served to make me feel I had overpaid. The most powerful tool arts marketers have is the database. Can’t patron information be programmed so that people who have already purchased tickets will be exempt from receiving such messages?
Similarly, after purchasing tickets at another theater for the first time, I received seemingly every email message sent out by the marketing department, which included daily reminders to buy tickets for this show. After many days of this, I called the marketing manager to ask if they could segment their lists and not send such messages to ticket holders. I was thanked for my input, but then I was removed from all their mailings, which is a shame because I like to stay informed about what they are doing. Obviously this theater is not set up for anything other than an eblast to everyone on its list.
I request that you arts marketers and managers reading this blog respond to me about your policies on these matters and your database capabilities for segmenting email lists. I look forward to hearing from you.
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I hope you are familiar with my most recent book: “Standing Room Only: Marketing Insights for Engaging Performing Arts Audiences (second edition),” published in May, 2014 by Palgrave Macmillan. This book is a comprehensive and newly revised sourcebook with up-to-date marketing strategies and techniques for theater, music, dance, and opera organizations. It presents the information necessary to attract and engage audience members effectively and efficiently. This book combines proven marketing wisdom with viable new ideas and approaches that will help arts organizations improve their practices and impact, while realizing their artistic missions.
The book includes vivid case studies and examples that illustrate my strategic principles in action from organizations large and small worldwide–strategies to help the performing arts develop a more diverse audience base and prosper in the midst of an evolving economic and technological landscape.
You can read more about the book on my website. Just click “Main website” in the header of this page. The book is available for purchase by clicking through my website or by going directly to Amazon.com or to barnesandnoble.com. If you are buying the book in bulk, you may find it advantageous to buy directly from the publisher at www.palgrave.com.
Please share your comments and questions with me. I look forward to hearing from you.