Dynamic development: 5 success factors
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In its arts patron behavior research since1995, the consulting firm TRG Arts has seen what it takes to increase numbers, loyalty, and investments from members and annual fund donors. This session from the 2011 ArtsReach conference in San Francisco, illuminates five dynamics that together make a successful fund- and friend-raising strategy for any organization. Get an expert overview on who are your organization’s best prospects, what you have to do to win them, and how you can go about it. Take home ideas you can implement whether you are a member of the development, marketing or ticket office team. Jill Robinson, President As co-owner of TRG Arts, Jill Robinson leads the consulting firm’s day-to-day operations and service to arts and cultural organizations and to the industry. Under Jill’s leadership, TRG has expanded its scope of service to all arts genres throughout the United States and into Canada. The firm’s relentless consulting focus on measurable revenue results is a hallmark of Jill’s leadership that has generated hundreds of millions in revenue – earned and contributed—for clients. Jill developed TRG’s counsel on integrated patron loyalty programs, bringing together colleagues across organization departments to build stronger, longer paid patronage. As a TRG lead consultant, Jill has recommended solutions for growth to scores of individual clients including orchestras, opera, dance, and theater companies, arts centers, festivals, and museums.
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Dynamic development: 5 success factors
- 1. Dynamic Development Jill Robinson President, TRG Arts
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- 5. Our Community Programs Seattle ArtsFund Portland RACC Boston San ChicagoPittsburghArts Boston Berkshires League of Greater Arts Boston Philadelphia New Francisco Washington Chicago Pittsburgh Greater Theater Bay Denver Jersey Los Theatres Arts Council DC Philadelphia Area SCC ArtPride Cultural Alliance Helen Hayes Angeles Arizona Awards LA Stage Alliance for Atlanta Audience Austin Central Houston C4 Atlanta Austin Houston FL Ft. Myers Creative Arts Arts and Alliance Alliance Cultural Alliance for the Arts Alliance
- 6. $ for tickets + $ in donations Demographic attributes = Trends Profiles Obstacles Opportunities
- 7. Dynamic Development Five Success Factors Members and Annual Fund Donors Who are best prospects? How to win them? What does it take?
- 8. Individual donors and members are made, not born. CULTIVATION 8
- 9. Advocate / Investor Donor Subscriber / Member Multi Ticket Repeat Buyer Ticket New Buyer Single Ticket Buyer 9 Patron Evolution
- 10. Membership and gift renewal….and so much more. RETENTION 10
- 11. New Single Ticket Buyer 4 out of 5 New Buyers Exit 11 The Unfortunate Reality Today…
- 12. Every patron contact is cultivation and retention. IT’S EVERYONE’S JOB 12
- 13. Retention secures the loyalty continuum 13
- 14. Loyal customers as measured by lifetime value 14
- 15. Knowing your audience is a success requirement. THE “WHO” MATTERS 15
- 16. Four Consumer Generations • Traditionalists • Baby Boomers • Generation X • Generation Y 16
- 17. Traditionalists % of % of study Consumer Age population donors behavior Approach to giving Conservative, risk-adverse, disciplined, Deliberate, pre- 66+ 13% 38% trusting meditated 17
- 18. Baby Boomers % of % of study Consumer Age population donors behavior Approach to giving Time-stressed, cause-oriented, value good quality Budget earmarks, cause- 46-65 25% 45% and service oriented, legacy seeking 18
- 19. Gen X % of % of study Consumer Age population donors behavior Approach to giving Individualistic, a tough sell but Less planned, event- deeply loyal once oriented, volunteers, 30-45 17% 15% attached influenced by friends 19
- 20. Gen Y % of % of study Consumer Age population donors behavior Approach to giving Intake vast amount of information, Volunteering, spreading short attention the word, based on < 29 25% 2% span = less loyal emotion 20
- 21. Percent of Category 2% 4% 0% 6% 8% 10% 12% 21 18 - 19 20 - 21 22 - 23 24 - 25 1% $897 26 - 27 28 - 29 Generation Y 30 - 31 32 - 33 34 - 35 36 - 37 38 - 39 8% 40 - 41 $747 Generation X 42 - 43 44 - 45 46 - 47 48 - 49 50 - 51 52 - 53 % HHs 54 - 55 56 - 57 44% 58 - 59 $1,207 Baby Boomers 60 - 61 62 - 63 64 - 65 % Revenue TRG DONOR DATA SET 66 - 67 68 - 69 70 - 71 72 - 73 74 - 75 Age (Head of Household) vs. Contributed Revenue 76 - 77 78 - 79 Median HH Gift: $1,238 80 - 81 47% 82 - 83 $1,557 84 - 85 86 - 87 Traditionalists 88 - 89 90 - 91 92 - 93 94 - 95 96 - 97 98 - 99 99+
- 22. Percentage of Category 22 3.0% 0.0% 1.0% 2.0% 4.0% 5.0% 6.0% 7.0% < 18 18 - 19 20 - 21 22 - 23 24 - 25 Generation Y 26 - 27 28 - 29 30 - 31 32 - 33 34 - 35 36 - 37 38 - 39 40 - 41 Generation X 42 - 43 44 - 45 46 - 47 48 - 49 50 - 51 52 - 53 54 - 55 All Patrons 56 - 57 58 - 59 Baby Boomers 60 - 61 62 - 63 64 - 65 Donor 66 - 67 68 - 69 70 - 71 72 - 73 Age - Head of Household 74 - 75 76 - 77 78 - 79 Traditionalists TRG Donor -Ticket Buyer Case 80 - 81 82 - 83 84 - 85 86 - 87 Finding Opportunity 88 - 89 90 - 91 92 - 93 94 - 95 96 - 97 98 - 99 > 99
- 23. DOTS ARE DEAD To succeed, benefits – all offers –must be meaningful THE RIGHT OFFER 23
- 24. Choose-your-own Benefits 24
- 25. What do Donors chose? 100% Tax Deductibility 26% Riverdance Offer 24% Dress Rehearsal 15% Backstage Tour 12% Discounted Tickets 4% 25
- 26. Build a Winning Strategy Best Prospects – Attend, buy tickets first – Exist in your database Next steps… – Come back. Retain. – Again and also..Cultivate Every contact an opportunity. Everyone plays a role. 26
- 27. Communicate Directly Know who you are addressing – Age – Transaction history Tailor and target messages – Meaningful – right person – Options – right offer – Timely – right time 27
Hinweis der Redaktion
- Our Data Lab findings come from our ongoing study of contributed revenue, ticket and admission revenue, in combination with arts consumer demographics. When we put together what we learn through analysis, we spot trends, see audience profiles, observe obstacles, and find opportunities. [click]
- Today’s session s a look at what we’re seeing as five success factors for developing members and annual fund donors.
- Most organizations are focused on bringing in new customers….and our studies have consistently shown that you and all of your colleagues are doing a great job in that department. Very popular programs are especially productive…..it is quite common to find that a Company’s blockbuster program of the season will bring in more new patrons than all other programs combined….that is certainly true of many holiday programs, or a big exhibit , popular play or hit musical. It’s what happens next that can determine the size and potential success of your membership or annual fund campaign. And what happens next in most cases?
- I’m so glad this conference brings together professionals like you from various parts of your organizations. Our study and client experience consistently show that cultivating and keeping patrons – retaining them – is an organization wide function and responsibility. Everyone plays a role, whether you are the development officer managing the campaign or working face-to-face with customers at the box office or planning the communications your patrons receive. ‘
- Every contact with a new buyer, a prospective member or donor can help determine whether he or she makes the decision to come back again or take a next step in their relationship with your organization. Striving for retaining patrons is the key, and treating each contact as an opportunity for retention is a critical part of membership and donor development. And, the rewards?...
- Our loyalty studies demonstrate that the more active a customer is, the greater and longer will be their investment in your institution. So, every time a member of the marketing team finds a way to gets someone in the audience to come back for another attendance, that’s a loyalty step. Say the box office staff points out the savings or benefits of membership to a customer and gets them to say yes. That’s another step. Each member of the whole staff team plays a role in cultivating loyalty and creating members and donors. And the payoff is greater revenue – cumulatively by every patron over time. ….. Now, let’s consider other factors that drive success.
- Our studies tell us that the better we know who are prospects are – their demographic profile, their transactional history – the better we can cultivate them and motivate their behavior. We could spend a whole session on this one subject, so let me focus on the newest trend in demographic analysis.
- There are four generations active in the consumer marketplace today. Their consumer habits are different. Their approaches to supporting organizations like yours is different. The way they communicate – the channels and language they use to communicate is different. And understanding them is important to membership and donor cultivation. Here’s a quick overview.
- Consumers ages 66 and up are a bigger portion of arts and culture patronage than are their numbers in the US population. Older individuals who support you are probably well known to you – This is the life stage that limits mobility but not necessarily giving. they are disciplined and loyal; they think about and are deliberate in their giving. Cultivating relationships among persons of this generations require directness, understanding, and – for many of us – patience.
- Baby Boomers – those mid-40s to mid-60s – today represent nearly half of arts and cultural patronage and about 1 in 4 Americans. As consumers, Boomers are cause and value-oriented. To cultivate this large group consider that they generally earmark their budgets to give what they give. Think about how you can engage them in YOUR cause, leave a legacy with your organization.
- Now we come to the younger age spectrum, where behavior is evolving or just forming -- beginning with the 30-something Gen X group. This is a much smaller population, and interestingly, the only generation that is represented among arts patrons in the same proportion as they are represented in the U.S. population. This very individualistic generation typically are a tough sell, but deeply loyal once attached. Can you see how you need a different approach – not just a different channel – to cultivate prospects who plan less, are influenced by friends more, and gravitate toward events?
- Finally, our youngest consumers….those under 30. Right now, Gen Y is just beginning to impact consumerism but oh what an impact they can have. Their numbers are huge – 1 in 4 Americans – and their tech saavy, insatiable information appetite, and short attention span are already legendary. But what we have found. We’ve seen in consumer reports – including surprisingly home ownership numbers – and in our own studies -- that Gen Y is not to be overlooked as member and donor prospects. No generation, for that matter, is. Check this out:
- Our firm recently did a pilot study on the contributed revenue behaviors of each generation. Our analysis looked at 2010 individual donor households from a select sample of performing arts organizations with consistent data and representing a mix of genres and U.S. regions. Across the bottom (horizontal axis), we’re measuring the age of the head of household. Each unit is a two-year increment from age 18-19 (far left) to 99-plus (far right).The four generations are denoted by the dotted vertical lines.The black bar height shows the percentage of total sample population in each two-year age increment. You can see that the age sample forms a bell curve that peaks in the Boomer generation between ages 58 and 63.and…in this chart we’ve added And.. The revenue associated with each two-year age group isseen in the red line cutting across the bars. You can see that the two older generations contributed more than 9 out of every ten donated dollars. When we looked at the average amount donated per household, here’s what we found…..Per-household revenue peaks at $1,557 with the eldest generation [click]Remains high among the huge number of Boomers [click]And drops off by nearly half among Generation X – 30-somethings at the height of the career- and family development life stage.Then, look at Generation Y [click]Average household gift is nearly $900. This reminds us that we can’t underestimate any prospect group…and underscores the importance of knowing WHO you are cultivating. Let me show you one more example of how understanding the audience on a generation basis can help shape cultivation activities.Here, you can see the generational divide with vast majority of donors in the older generations.Now let’s look at the donation revenue associated with each generation and age segment.In this pilot study, the median household gift was $1,238. The median for each generation:Traditionalists: $1,557 – 26% higher than median.Boomers: $1,207 – just about the medianGen X: $747 – 40% below median…..and for our youngest generation:Gen Y: $897 – still below the median but 20% more than Gen X.It means that in this pilot study group, the youngest donors are giving more per household than donors ten to nearly 20 years older.Given what other researchers are finding…with surprise, like the housing study that came out last month….this is an indication that younger donors should not be written off or overlooked.Let me show you a specific case where opportunity may be knocking among a Company’s youngest patrons.
- This is a specific case with which we were engaged recently. In this chart, the black bars are again measuring the per cent of total patron population – ticket buyers, members, and donors – in each two-year age segment. The orange line traces the age of donors only. We wanted to share this particular case because of the Company’s rather distinct double-peaked age curve. This organization offers a range of programs in a community that attracts a large share of its very large young adult community into its audiences. Ticket buyers are the major patronage driver here, so age of all patrons is reflecting that.If your patron age chart looked like this, what would you see right in here [animate the circle to come up] among those active Gen Y and Gen X ticket buying patrons. What we see is opportunity – patronage developing around ticket buying at a young age and life stage.. But not yet around donations. If they are building membership among these current ticket buyers who also are donor prospects…..can you imagine how the cultivation might best be approached….and donation request might be best made? It would be different for this group than for the larger share of donors who are – as we saw in the pilot donor study….older, mostly Boomers.Every case …your case is going to be different. We likely wouldn’t expect an age study in a retirement community of the Sun Belt, for instance, to look like this. Individual case data tells a particular story….and knowing what your age data can tell you is really the point.We’ve concluded…..
- When we know that major -- sometimes surprising -- variances exist among our member and donor prospects, it follows that one type of membership or annual gift offer will not fit all . In our industry right now, there is a need and plenty of room for improvement in the way we construct offers. Think about the approaches we most often make – in our printed materials and online. Join at this level and get….dot, dot, dot. Give a little more and get all the above plus dot, dot, dot. At TRG we are of the firm belief that [click] Dots are dead. Here’s some newer thinking ….
- TRG clients are enjoying success with “Choose-your-own benefits” campaigns. Rather than a pre-selected list of benefits, members or annual fund donors have a choice.The higher the gift the more you get….or the prospect can choose to just give.What do they choose….it varies, of course, but here’s what our client learned in an initial test.
- The offer included a choice of one or more benefits, including:Discounted ticketsA backstage tourA Dress rehearsal,Special offer associated with a presentation of RiverdanceOr, 100% tax deductibility…Assumption: Everyone would want discounted tickets. Not so. Offering the choice gave prospective donors more options….Donors told this what they wanted, removing the risk of guessing wrong.