The death of the subscription has been greatly exaggerated
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Let’s face it; the subscription has been uncool for years. While disruptive technologies and changing arts consumer behavior have transformed the way arts managers see their business model, the subscription has declined and stagnated. “Subscriptions are dead” is now conventional wisdom in our industry. But, if subscriptions were truly dead, wouldn’t they have just disappeared by now? Inconveniently, subscriptions incentivize loyalty and provide sustainable revenue that's difficult to find elsewhere in any audience-centered business model. Many organizations that have tried to innovate in this area have found themselves in a state of subscription emergency. The fact is, subscriptions are still viable, but selling them today requires a different mindset than it did 5, 10, or 20 years ago. While it takes work to rescue and resuscitate your subscription program, it's achievable and you already have many of the tools you need to do it. In this webinar, CEO & President Jill Robinson presented: - Evidence that subscription survives and, yes, even thrives at arts organizations today - How subscription can build loyalty among audiences - What it takes in 2015 to rescue your subscription program
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The death of the subscription has been greatly exaggerated
- 1. Jill Robinson, President & CEO TRG Arts THE DEATH OF THE SUBSCRIPTION Has Been Greatly Exaggerated Webinar Copyright © 2015 TRG Arts All Rights ReservedPhoto via Michael Coppens (CC BY 2.0)
- 2. Photo by ASJ8 via flickr.
- 3. Photo by Ken Fager via flickr.
- 4. Photo by Phil Roeder via flickr.
- 5. Subscription In the NFL, others • “Season Tickets” • Trends • Motivations
- 6. But, “subscription”… In the arts? • “There seems little doubt that the [subscription] model itself is going bust.” --Terry Teachout in the Wall Street Journal, 2013 • “ ‘Subscribe Now!’ was the title of a 1977 book by Danny Newman that became the marketing bible for performing-arts institutions in the United States. “No!” comes the answer from audiences a generation later.” --Washington Post, 2012 • “Subscriptions are a dying model. I doubt that there is any managing director or artistic director who would start a theatre today with subscription as the primary model.” --Rob Orchard, Subscribe to This! www.tcg.org
- 7. But, “subscription”… In the arts?
- 9. Could it be A demand issue? • Similar to our “Art Form” • Market • Investment
- 10. Could it be A demand issue? • Similar to our “Art Form” • Market • Investment
- 11. DEMAND
- 13. Photo via Bjorn Watland (CC BY-SA 2.0)
- 14. Photo via Brandi Korte (CC BY-NC-ND 2.0)
- 15. Photo via Michael Coppens (CC BY 2.0)
- 16. Photo by Russ Seidel via flickr.
- 18. Donors and consummate loyalists The magic of “and” From 1st time to second or last time to NOW VIP access & pricing Better access, Incentives for upgrades, adds Least attractive access, incentives to upgrade Sustainable Income: Integration of Loyalty & Demand Management
- 19. Donors and consummate loyalists The magic of “and” From 1st time to second or last time to NOW Sustainable Income: Integration of Loyalty & Demand Management
- 21. Philadelphia Study Two Key Findings 1. Subscriber and donors had the highest volume of cross-over • 40% of subscribers donated 2. Demographic trends • Millennials
- 22. ROI philanthropy Benefit is higher retention
- 23. Love the Ones You’re With
- 25. Artistic Financial Marketing Segmentation Sales Inventory Management Retention & Upgrade Alignment?
- 26. PUTTING IT TOGETHER Building a successful subscription program
- 27. We Asked You Subscriptions at Your Org? 1. Stable/Flat: 43% 2. Declining: 25% 3. Growing: 22% 4. Up & Down, All Over the Place: 9%
- 28. Artistic Programming 1. Programmatic Loyalty Analysis 2. Integrated Decision-Making Process 3. Subscriber Feedback
- 29. Financial Investment, Infrastructure 1. Retention Budget 2. Campaign Investment 3. Budget for the “and”
- 30. Sales Culture 1. Box Office 2. On-line 3. “In Store”
- 31. Marketing Segmentation 1. Prior Relationship • Lapsed subscribers • Donors non-subscribers • Multi-ticket buyers, recent and lapsed 2. One-time Ticket Buyers? NO! • Seattle Repertory Theatre case 3. Trades
- 32. Retention & Upgrade Single TicketSub 1. Single Ticket Buyers!! 2. Retention Begins: Point of Sale 3. Continues All Season Long • Ensure ticket use • Thank you, benefits • Ask for the UPGRADE!
- 33. Inventory Management 1. Hold best inventory for subscribers 2. Care for loyalty during renewal process 3. Single ticket buyers—manage well for loyalty!
- 35. Artistic Financial Marketing Segmentation Sales Inventory Management Retention & Upgrade Alignment?
- 36. Photo by ASJ8 via flickr.
- 37. Hyde Park Jazz Festival. Photo by Marc Monaghan (CC BY-NC-ND 2.0)
- 38. Hyde Park Jazz Festival. Photo by Marc Monaghan (CC BY-NC-ND 2.0)
- 39. Photo by Stijn Bokhove (CC BY-NC 2.0)
- 40. Questions
Hinweis der Redaktion
- Good afternoon. My name is Jill Robinson, President and CEO of TRG Arts, and you’ve joined me today for a presentation and discussion about the subscription.
- Or perhaps more specifically, the DEATH of the subscription. In some arts quarters, this is still a debated issue, and we’re continuing that debate today. In others, though, it’s an accepted fact and reality in 2015. Original photo link: https://www.flickr.com/photos/amrja/460646099/in/photolist-GGW38-iwPbs-4W9NBS-6Nd1o-sg7Sd-4Mmyi-qJR5vg-obLzpe-bK9ihV-4NJsjc-q175B-ig6FJt-km36Vg-onGTRT-5hntXR-i6Zio-q17ee-joRatb-kqDFSR-faZHYk-a6WEqv-5vsWQp-3tjuHq-b3ZsxV-oBLCoy-nL9HTK-p4AfWH-iAzvYq-7fn4Kr-3iXZ2u-5Zpq2m-dKaQgp-5YEYAQ-pwKXaM-8kCGRr-8kFTK3-deRvFw-81iVzD-9imsk-8kCGGV-4qPiQz-5gE3Dm-jt4BrL-dh4HPa-oUQdGa-5hyLmH-8yjAjE-e1XrQB-dHK5qx-p5v8jS
- Well, someone needs to tell the Green Bay Packers about this reality. Original photo: https://www.flickr.com/photos/kenfagerdotcom/11802647853
- Season tickets to the Packers have been sold out at Lambeau field since 1960, and they’ve been accumulating names on their legendary season ticket waiting list ever since. Original photo: https://www.flickr.com/photos/tabor-roeder/15266873342
- The subscription, or “season ticket” in professional and collegiate sports continues to be a successful model according to our friends at Turnkey Intelligence, who are the leading research firm in professional sports & entertainment. While demand plays a huge role in specific teams or markets (trends for the Packers or for the New England Patriots are different than for the Carolina Panthers, for example) the trend in professional and collegiate sports has been household (account) growth and investment in benefits directed at season ticket holders. And, like we’ve seen in the arts, sports teams have successfully experimented with smaller packages, premium packages, and more (memberships) that have fueled that growth. Turnkey research has revealed motivations CLICK for subscribing that sounds very familiar to our “arts” ears at TRG: season ticket holders want to hold and improve on the same seats for each game, and get access to the post-season. Sounds like renewable seats and blockbuster programming to me.
- As for subscription or season tickets in the arts? Whether it’s individuals telling the sad story about the dying model, or formal research projects like La Placa Cohen’s Culture Track and the NEA reporting on changes in average attendance over the past decade, there doesn’t appear to be a lot of good news to tell.
- As for subscription or season tickets in the arts? Whether it’s individuals telling the sad story about the dying model, or formal research projects like La Placa Cohen’s Culture Track and the NEA reporting on changes in average attendance over the past decade, there doesn’t appear to be a lot of good news to tell.
- As for subscription or season tickets in the arts? Whether it’s individuals telling the sad story about the dying model, or formal research projects like La Placa Cohen’s Culture Track and the NEA reporting on changes in average attendance over the past decade, there doesn’t appear to be a lot of good news to tell.
- Our friends at Turnkey said something really interesting as they we were talking on this subject, however. They said, “Jill, there are differences between results for the NFL (professional football) and the IHL (professional hockey) CLICK. There are differences between markets CLICK, honestly based on the number of Ws and Ls in their records. And not every team is able to invest equally CLICK. And then my friend Haines told me a funny story about how, in an attempt to combat couch-sitting and in-home viewing because games are broadcast everywhere on TV and the Internet, the Miami Dolphins are actually installing living rooms boxes, at $2k per game, with TVs right in front of recliners! That fans can sit in. To watch games. In the stadium. I found myself grateful in that moment that I wasn’t working in professional sports. But demand is an issue. In TRG’s 20 years of consulting experience, we have seen and still see in 2015, that organizations who enjoy overall demand have a stronger subscription message and associated results. Sometimes the path to demand is to act as IF you have demand. Remember: the perception of success can create irrational behavior on the part of the consumer. And often, the purchase of a subscription is compltely irrational.
- Our friends at Turnkey said something really interesting as they we were talking on this subject, however. They said, “Jill, there are differences between results for the NFL (professional football) and the IHL (professional hockey) CLICK. There are differences between markets CLICK, honestly based on the number of Ws and Ls in their records. And not every team is able to invest equally CLICK. And then my friend Haines told me a funny story about how, in an attempt to combat couch-sitting and in-home viewing because games are broadcast everywhere on TV and the Internet, the Miami Dolphins are actually installing living rooms boxes, at $2k per game, with TVs right in front of recliners! That fans can sit in. To watch games. In the stadium. I found myself grateful in that moment that I wasn’t working in professional sports. But demand is an issue. In TRG’s 20 years of consulting experience, we have seen and still see in 2015, that organizations who enjoy overall demand have a stronger subscription message and associated results. Sometimes the path to demand is to act as IF you have demand. Remember: the perception of success can create irrational behavior on the part of the consumer. And often, the purchase of a subscription is compltely irrational.
- #1 reason: demand
- Just ask our friends at the Guthrie Theatre in Minneapolis who, in the past two years, have been working aggressively to (1) manage their every-performance perception of success through inventive scale plans & inventory management, (2) investing heartily in blockbuster and appealing productions to ensure they reach sell-out, and then (3) investing organizationally in their subscription program and associated benefit messaging. After years of subscription decline, they’ve experienced 10% growth in the past two seasons.
- Or the Hollywood Pantages Theatre, who this year had 22,000 subscribers and has seen growth in their subscription program over the past four seasons. Original pic https://www.flickr.com/photos/bjornwatland/6071995106/in/photolist-afyyAN-3AGBd-fKpyE-pQeTuG-HHEJB-oVwp1i-oVwwSF-pzVKkE-pzVF4J-pzSBcE-pSoM1L-5dTNi8-2ZFedz-48un2k-qDFyVc-4RB5vb-4dLvBv-fKpqX-oVwyjP-pS5UU6-pSjH9i-pzVwpE-5dTMKP-5dY83f-5dTMeP-5dY7MN-5dY7H5-5dY7BU-5dY7v7-5dY7ao-5dTLpv-5dY8QQ-5dTN7g-5dTN24-5dY8m3-5dTMCZ-5dY895-5dY85U-5dTMmH-5dTMik-5dTLKP-5dTLF6-5dTLzz-fKpfC-3AGAH-3rAKBq-8f2iUa-vjwBB-949CYA-946ArT
- Or Performing Arts Fort Worth/Bass Hall, whose NEW subscription program, this year, grew by 44%. Original pic: https://www.flickr.com/photos/branditressler/5315090118/in/photolist-96Fe7N
- Or my favorite, Houston Ballet—who working over the past decade to integrate the strategies we’re going to outline today, has experienced 25% growth in subscriptions sold. Over a decade. Original pic: https://www.flickr.com/photos/urbanhoustonian/15787308939/in/photolist-8Esc8R-2aKP3w-2aKP4y-88bsbV-q455VH-pnogsU-qjctyr-qjctyM-qh6tqQ-qjcty6-qh6t2d-qhGWSY-qhQW3H-qhGW3m-qz69QX-qzfXEe-pCuLzi-pCgjAS-qhGVXS-qhGXP7-pCuNeF-qhGYTS-qhPfVD-qhGfQS-qhQWNF-qzcaNs-pCuLWR-qhQU1X-pCgjDh-qzfYMV-qzfYEk-qhQVsz-qwYLzJ-fFAPNg-fFTpqW-8wxRwq-8wxRps-7eL994-2U3W8k-2U3VrP-2U8kUG-qzc9VL-qhGimy-qhGWVy-hRTx5-8wuRgK-8J2NQH-8wuRkk-8wuRqZ-7fHggn
- But we’re not naïve here at TRG. We KNOW—like you do—that some parts of the subscription model have long since gone the way of the dinosaur. We no longer see 20-concert subscriptions sold at large orchestras. Or subscription revenues delivered ONLY through traditional, fixed-seat packaging. No. It IS 2015, and our environment has changed radically since the late 80s when I began my career in the arts. But—and I’m a little strident on this point, to the consternation of some--I believe that we, as administrators, started some of this change BEFORE it was required, in RESPONSE to what we believed our patrons wanted. And then we didn’t totally like what we’d created or what happened. I think that like many human narrative, we’ve created reasons—excuses—about why that which WE undermined no longer works. No longer holds true. Original picture: https://www.flickr.com/photos/10159247@N04/4335602802/in/photolist-2zBjXu-eFN5d-6mRtRS-GXN85-7p3ern-w629-9kWmqX-4yv8Nb-KWKG5-bEHjfd-r2zrKY-w62f-2FRrJ-6Z9oL-7Q6knA-8QpJ5F-dtgGAE-6ugkiF-9et7Ys-dEAyQw-7cgAgq-dApQnY-7B86Es-d94sfA-daogZf-6VviBx-dqhXNU-dcTWhA-5JWrin-4Jutdo-uPW5n-q1vTKs-7jyNpF-bBqasy-dhp5G-pMUVxY-pB2NYh-7ccGSx-9ESWM1-44SCp-7hJ5VF-7nYvjJ-7TB5U3-fndc3B-aGWM2-9KTYyi-ngCKKJ-fr8XQk-6ukvqE-ondda1
- I’ve been talking a long time here about TRG without actually introduce our firm! Let me take a minute now to do that. We know that many of you on this call know us through one lens or another, one type of work or project, but allow me to give you an overall introduction. TRG Arts is a Colorado-based consulting firm that is driven by data and OBSESSED with results. We’re also true believers. We believe that communities are stronger when arts and culture THRIVES. And we believe that the traditional arts organization plays a critical role in the curation and delivery of experiences that make communities great. We’re celebrating our 20th year in 2015, and were founded by my late and GREAT business partner, Rick Lester. Our firm includes 30 team members, each skilled in providing guidance and solutions that are patron-based for sustainable loyalty of patrons and sustainable revenue from those patrons.
- At TRG, we use the word “patron” for any PERSON engaged with an organization—visitors, ticket buyers, members, donors, event attendee), and we view patrons through the lens of a dozen years of loyalty study that has created a schematic that many of you are familiar with that we call our Advocate-Buyer-Tryer pyramid. Advocates in any database are patrons who are our most loyal. Every year, they are major donors, subscribers, members, event attendees. They are actively engaged in what you do, all the time. Buyers are where we see the magic of “and”. These patrons do combinations of things—like buy a small subscription AND a ticket to the gala. Or they purchase multiple single tickets AND make a small donation. This segment of your database is where the loyalty traction is beginning to take hold, and our data demonstrates the power of the subscription in this loyalty continuum. Tryers are the largest proportion of every database we study, and these are folks whom we’re trying to move from first time to next OR from last time to NOW. On the main, these patrons are single ticket buyers or visitors who churn out at business-model risking rates. In a seated event business (which is what you run and what we have in COMMON with collegiate and professional sports) the INTEGRATION of loyalty management and DEMAND management create the winning scenario that supports, fosters and sustains patron loyalty. Using Demand Management as an overlay to loyalty management, 20 years of TRG experience suggests that how we manage access to inventory in different demand scenarios enables us to flip switches and pull levers that motivate irrational behavior. When we have demand: Advocates MUST get… And when we don’t, they’re still in the best seats or close to them, even when they buy late. Buyers should receive constant invitation and incentives to improve their lot in life with your institution. This enables them access to better inventory and experiences all year long, but especially when you have demand. Tryers MUST be managed carefully. When you have demand, they must not get the same experience or access as Advocates and Buyers. If they do, why on earth should they subscribe? But when demand is lower, all bets are off and Tryer get access easily. This integration between demand and loyalty management, prioritized and invested in, creates sustainable patron income.
- At TRG, we use the word “patron” for any PERSON engaged with an organization—visitors, ticket buyers, members, donors, event attendee), and we view patrons through the lens of a dozen years of loyalty study that has created a schematic that many of you are familiar with that we call our Advocate-Buyer-Tryer pyramid. Advocates in any database are patrons who are our most loyal. Every year, they are major donors, subscribers, members, event attendees. They are actively engaged in what you do, all the time. Buyers are where we see the magic of “and”. These patrons do combinations of things—like buy a small subscription AND a ticket to the gala. Or they purchase multiple single tickets AND make a small donation. This segment of your database is where the loyalty traction is beginning to take hold, and our data demonstrates the power of the subscription in this loyalty continuum. Tryers are the largest proportion of every database we study, and these are folks whom we’re trying to move from first time to next OR from last time to NOW. On the main, these patrons are single ticket buyers or visitors who churn out at business-model risking rates. In a seated event business (which is what you run and what we have in COMMON with collegiate and professional sports) the INTEGRATION of loyalty management and DEMAND management create the winning scenario that supports, fosters and sustains patron loyalty. Using Demand Management as an overlay to loyalty management, 20 years of TRG experience suggests that how we manage access to inventory in different demand scenarios enables us to flip switches and pull levers that motivate irrational behavior. When we have demand: Advocates MUST get… And when we don’t, they’re still in the best seats or close to them, even when they buy late. Buyers should receive constant invitation and incentives to improve their lot in life with your institution. This enables them access to better inventory and experiences all year long, but especially when you have demand. Tryers MUST be managed carefully. When you have demand, they must not get the same experience or access as Advocates and Buyers. If they do, why on earth should they subscribe? But when demand is lower, all bets are off and Tryer get access easily. This integration between demand and loyalty management, prioritized and invested in, creates sustainable patron income.
- We’ve implemented hundreds of Advocate-Buyer-Tryer analyses over the years, but the first large-scale project came our way in 2014 when the Greater Philadelphia Cultural Alliance retained TRG to implement ABT for 17 individual organizations ranging from the Zoo to the Ballet to small museums, and THEN create one arts-wide loyalty review. We learned a lot, and you can download this report on our website, but there are two findings that are particularly relevant to our conversation today:
- Subscribers and donors had the highest volume of cross-over between “buyer types”, so to speak. Other buyer types included in the study were members, single ticket buyers/visitors. A full 40% of subscribers also had donations as part of their behavior. So, reason #1 to invest in subscription: An investment in subscription is ALSO an investment in philanthropy. The data coming out of Philly is consistent with virtually every study we’ve done. Finding #2 is related to demographics and the much-discussed Millennial cohort. For context, Buyers and Advocates—the segments where almost ALL of the subscription behavior were found—were older, wealthier…they were demographically what we think of when we think of a “traditional” arts demo. Arts Tryers, who were 96% single ticket buyers/visitors were, you guessed it: younger, less educated…it’s where all those Millennials were hiding in the database. Those Millennials whom none of us believe will EVER subscribe. This demographic point isn’t the point of this discussion, but there’s increasing evidence that Millennials are behaving differently from their elder Gen X cohorts related to philanthropy and brand loyalty AND: I’d remind us all—this is the first time we’ve had the abilty to study arts behavior amongst four/five distinct demographic groups. While our Millennials are different, operating within the context of a different time, life stage absolutely plays a role here, too. I mean, c’mon: How many 20-somethings in 1950 or 1975 were buying subscriptions to their local orchestras? Not MANY, I’m guessing. So let’s stop panicking about them, PLEASE, and focus on how to engender loyalty among them.
- Reasons # 2 & 3? The benefit to investing in subscription is higher retention. Subscribers renew at a much higher rate than single ticket buyers, and larger the subscription, the larger the retention rate. The larger the retention rate, the higher the ROI on the campaign directed at these patrons. Subscribers renew at pennies on the dollar compared to the cost of acquiring new patrons. And yes, there is increased philanthropy.
- You have to LOVE THE ONES YOU’RE WITH. Focus on retention in your organization and make it a prioirty. The point ISN’T that the subscription is the only model. LOYALTY is the model. As I said in my recent blog, the sustainability and viability of the arts is not necessarily dependent on subscription. But it IS dependent on loyalty. At TRG, we’re quick to say that we care much less about being right than following the data. Subscription doesn’t have to be THE way, but we’ve yet to find a model that provides so much benefit. We’ve walked along clients as they’ve tried a variety of models like membership (where we have to sell TWICE—first the membership, then again the events we want them to use the membership to enjoy), and rewards- or points-based systems that are still relatively new in the arts, but show some promise especially in multi-disciplinary presenting environments… But so far these programs have limited success compared to the models that actually get fannies in a seat in a predictable, regular way. And THAT, my friends, is what we’re all aiming for.
- So. What does it TAKE to make a subscription model—in its various shapes and sizes—work? Three things: You must recognize and CELEBRATE that you’re running a seated event business. Loyalty rules and incentives in your type of business are different than loyalty rules for a Netflix subscription or even for United Airlines, where the consumer determines the travel dates. Your organization must DECIDE that you will prioritize loyalty and the subscription offerings you have. And finally, you must get ALIGNMENT around this decision throughout your organization.
- What do I mean when I say alignment? Typically it means work, change, and investment in these areas: Artistic planning and integration Financial investment and infrastructure Developing a sales-oriented culture at point of sale and in your venue Segmenting your market in a way that ensures that the right offer to the right person at the right time Managing your seating inventory in such a way that REWARDS loyalty Investing in the necessary retention strategies that not only increase subscriber retention, but perhaps more importantly grows single ticket buyer retention so that the pool of potential subscribers can grow.
- Let‘s put all this together, and review each of these alignment issues, one at a time. But before we head this direction, I want to share with you what we found about YOUR subscription campaigns, based on the survey we asked you to participate in when you registered for this webinar.
- Artistic planning and its impact on patrons…still a sensitive subject in some arts sectors and organizations. When we started consulting 20 years ago, Rick and I would say, “you program it, we’ll make it work…” Not that THAT could automatically happen, but you get the drift. The orientation tended to be that programming decisions were singularly made based on artistic vision and could not be distracted by “marketing” or audiences. Sure, the two desires collided, sometimes often. But the PURPOSE of artistic planning did not have the audience overtly in mind. NOW, things are changing, they’re different. And today data analysis is available that tells the complex story of programming decisions. Yes, Blockbuster programming delivers the annual revenues that organizations need to meet budgets, create audience growth and more. But “core” programming attracts audiences that stick longer. It’s a fact that we see every time we study programmatic data. It’s always been intuitive, but now we can tell a story about how to use programming to grow AND SUSTAIN patronage through data analysis. In the words of the artistic director of one of our theatre clients, “we BOTH win—the art and the business!” So, what does alignment around artistic planning have to do with subscription growth? Does your organization KNOW which programs attract new audiences, create attrition/church, or create repeat buying? If subscriber acquisition AND retention is the goal, might that knowledge be helpful context for your artistic staff? Does your organization have an integrated process for programming decisions? Are all angles considered—all of the artistic ones for starters, but also: ability to attract new audiences or re-engage lapsed; subscriber/donor impact; corporate sponsorship opportunity? Operational impact, cost. Today, EVERYONE’s insight is required to run a successful seated event business. Do you ASK subscribers for their feedback? This scares a lot of organizations, but remember: not all subscribers are created equal. New subscribers will respond differently about programming than long-term subscribers. And they WON’T all want just your blockbusters—we promise.
- The financial implications of a subscription program are enormous. The investment required to create and develop long-term relationships with audiences is huge. There’s investment in campaign activity, benefits, staff, incentives… And in the long-RUN it’s completely worth it. Completely. Here’s a few things to consider when benchmarking your subscription investment: Retention. This subject is so big, it has it’s own category we’ll address here in a few minutes. But suffice it to say right now: you must budget for single ticket and subscription retention activities—and the staff to implement them—to enable the activities to happen. Campaign Investment. In short, the longer and more targeted your subscription campaign, the more subscriptions you’ll sell. Plan on launching your campaign three or four months before your current season is completed, and continuing it well into the next. Consider how your campaign plan can have the necessary frequency during that time—every six to eight weeks—to at LEAST your best prospects. And finally, don’t assume that your renewal campaign is over when your subscribers have missed their deadline and you’ve released their seats. This is an incredibly important prospect pool for a different or smaller type of subscription—don’t give up on them, and budget for it. Finally, we know that subscribers who donate renew at higher rates. They’re “stickier”. But what are the incentives in your organization for marketing and development to work together to make this happen? You may be among the lucky whose marketing and development departments work well together, AND EVEN IF YOU ARE—challenge your finance department to begin creating a budget line (revenue and expense) for the loyalty behavior you desire. This is a simple way to start. Budget for SUBSCRIBER DONORS. It benefits marketing in higher renewal rates, and development in increased philanthropy. Everybody wins, and you have a new data-driven metric to describe loyalty in your organization!
- Selling. Even in 2015 this little word, SALES, is inconsistently thought about, and as a result, implemented on. We’ll meet organizations who say, “of COURSE, we sell! We sell on-line, we sell in the box office, we sell at the hall, we sell groups…” And upon further investigation what we learn is that they TAKE, or RECEIVE orders. But they’re not SELLING. They’re describing their channels of distribution. Developing an entrepreneurial culture is one of the most important things that can happen to an organization, and it relates to subscriptions because the development of this culture can begin VERY effectively in the context of a subscription campaign. So, three questions here: Is your box office trained and provided incentives to sell subscriptions to patrons calling to purchase single tickets? They should be, and its easy to start a program during the subscription selling season. You must have goals—make them monthly for easier tracking—and incentives—cash is king—and make it a TEAM goal that everyone can contribute to. Does your website encourage single ticket buyers to consider a subscription? At the point of sale? Like, “wait, stop! Consider buying a subscription before you purchase that single ticket!” And do you sell subscription overtly and with enthusiasm while you’re in performance? Think about how retailers use in-store promotions. How do the best ones do this work? What can you mimic?
- At TRG we think about Marketing Segmentation in this way: are we getting the right offer to the right person at the right time? A dozen years of in-depth patron behavior study has regularly told the story: loyalty development is about getting the sequence of offers right over the term of the relationship. We use the dating analogy and it really works. When thinking about subscription, it can be really helpful think about that offer as a marriage proposal. With that in mind, keep these things in mind: While some people will go to Vegas and run off and get married to someone they just met there, MOST people don’t. Now, some of you in this room will need to keep your own personal story and biases out this equation…but trust us. This is true. So the best subscription offer will ALWAYS be made to patrons who have had a prior relationship with you. Who is that? Lapsed subscribers Donors non-subscribers Multi- ticket buyers, recent and lapsed What about recent single ticket buyers who’ve bought only once? Our experience is that the next most important step for them is to purchase again, ideally in the same season (which has the nifty affect of cutting their churn rate measurably). We’ve got a terrific case study with the Seattle Repertory Theatre on the benefits of taking this strategy on our website, but really: as hard as it feels, it IS the best thing to wait. While it takes time, providing time for the relationship to build creates an enormous flywheel for your subscription and fundraising efforts. What about trading with other organizations in my community? TRG has played a role in community data warehousing and analysis for a decade, and we know that trades, as they’re called, can play a productive role in a subscription campaign. Two things you’ll want to think about: 1) cost—these patrons are less exposed to your organization, your art form. It will cost more to acquire them than patrons already in your database. And 2) segmentation applies here, too. Borrowing the dating analogy again, why would we ask single ticket buyers (DATES) to another organization to purchase a subscription (THE MARRIAGE PROPOSAL) to yours? Either ask for subscriber or lapsed subscriber segments when making your trade request, or use traded lists for your single ticket prospecting efforts.
- Your subscription campaign has been underway, you have a subscriber base that you’re continuing to build on, and the season is about to open. When does your subscriber retention program begin? For some organizations we meet, subscriber retention thinking doesn’t begin until the next seasons’ renewal campaign planning begins. You won’t be surprised, I don’t think, if I tell you that THAT kind of thinking misses the boat entirely. Here are some things to consider related to subscriber retention. First, remember that the entirety of your subscription campaign is built on a strong, multi-buying single ticket base. We can’t say this enough at TRG: if you’re not obsessed with single ticket buyer retention, you will forever be frustrated with the cost and effort required to build a subscriber base. Your SUBSCRIBER retention program begins when the patron purchases the subscription and immediately after with the THANK YOU and customer care you deliver from that point until ticket delivery. Again: think of the best retailers you know. Immediately after purchase, they are keeping you posted, staying in touch, until you’ve received your items. You know you could reach them easily, ask them questions, and…you know you won’t forget that you bought something if it doesn’t show up. Retention BEGINS AT POINT OF SALE AND IMMEDIATELY FOLLOWING. Finally, the remainder of your retention program continues all season long and ENDs with your renewal campaign. Three rules here, too: Ensure subscribers USE their tickets. Whether it’s a fixed-seat sub who regularly exchanges (good! They’re USING their subscription) or a flex buyer whom you need to remind to actually USE the vouchers, make sure they use what they purchased. Say thank you regularly. Provide them access and benefits that are meaningfully different than your single ticket buyers receive. And at renewal time: ask for the upgrade! Whatever that right upgrade step is, ensure that you’re asking them to take it. Remember: if you don’t ask, they likely won’t volunteer to upgrade their seating location, grow the size of their series, or add on that donation. But every additional step is a loyalty step that translates into higher retention rates and investment in your organization.
- How you manage inventory related to your loyalists has a huge impact on patron behavior. I hope by now that you’ve seen the benefit of the subscription model to the arts, and the possibilities in your institution for strengthening your relationship with audiences through strengthening your approach to subscription. Now we need to “close the loop” in the prioritization of these patrons by managing access to inventory in such a way that reflects this prioritization. What do I mean? Hold the best seats for subscribers—even after single tickets go on sale. Manage your inventory like crazy so that subscribers actually DO get the best seats. Think about your organizational behavior during renewal time. Prioritize seat change requests for larger package subscribers. Be transparent about this. SAY it, on renewal and acquisition collateral. If you prioritize loyalty, SAY IT. And ask your organization: when large package subscribers release their seats, do we RESERVE this location for other large package subscribers? Or do we sell and seat smaller package subscribers into that inventory? It may convenient for US to do this, but what message does it send to the consumer? And finally: we MUST manage the single ticket buyer’s access to inventory, especially when we have demand. Consider this scenario: Mrs. Got Rocks, returns seats for blockbuster last minute, STB calls last minute, gets seats. What message are we sending that last-minute single ticket buyer? What requirement does that ticket buyer fell he has? Example of ticket buyer at last minute Seating access by size of package—renewal campaign, acquisition What else?
- To recap Three things: You must recognize and CELEBRATE that you’re running a seated event business. Loyalty rules and incentives in your type of business are different than loyalty rules for a Netflix subscription or even for United Airlines, where the consumer determines the travel dates. Your organization must DECIDE that you will prioritize loyalty and the subscription offerings you have. And finally, you must get ALIGNMENT around this decision throughout your organization.
- Remember: what we mustn’t believe is THIS. Original photo link: https://www.flickr.com/photos/amrja/460646099/in/photolist-GGW38-iwPbs-4W9NBS-6Nd1o-sg7Sd-4Mmyi-qJR5vg-obLzpe-bK9ihV-4NJsjc-q175B-ig6FJt-km36Vg-onGTRT-5hntXR-i6Zio-q17ee-joRatb-kqDFSR-faZHYk-a6WEqv-5vsWQp-3tjuHq-b3ZsxV-oBLCoy-nL9HTK-p4AfWH-iAzvYq-7fn4Kr-3iXZ2u-5Zpq2m-dKaQgp-5YEYAQ-pwKXaM-8kCGRr-8kFTK3-deRvFw-81iVzD-9imsk-8kCGGV-4qPiQz-5gE3Dm-jt4BrL-dh4HPa-oUQdGa-5hyLmH-8yjAjE-e1XrQB-dHK5qx-p5v8jS
- What we’re going for is our Green Bay Packer equivalent of this… Original pic: https://www.flickr.com/photos/marcmonaghan/8064633878/in/photolist-8gSW2N-esDzTf-4Ya8Q2-a5P5cq-5Aki6f-a5P2LW-dhDmFG-dhDmog-a5P1LN-a5P2mb-di7eRZ-7j1M5h-XqUe3-e1HBss-dhDD69-dhDBKi-dhDzNP-dhDBdL-dhDnH6-dhDHuu-4oP4Gh-5oxAti-9kuPk-9S1Ggr-a4bFt2-moGa8-6HEE7b-7j1Me5-9XXyup-9YmiBY-oibFks-ojZ3LB-oibG53-oie2HR-moJZo-dDweN8-4Ya9yX-4RL6gw-8sN9uq-8sN9p5-55xcn9-6Q9dW-5Y3Tia-58AGvy-8KWhNw-5a1vdq-55t1j8-9WiZjn-dhDriy-dhEx5n
- And this… Original: https://www.flickr.com/photos/marcmonaghan/8064703872/in/photolist-8gSW2N-esDzTf-4Ya8Q2-a5P5cq-5Aki6f-a5P2LW-dhDmFG-dhDmog-a5P1LN-a5P2mb-di7eRZ-7j1M5h-XqUe3-e1HBss-dhDD69-dhDBKi-dhDzNP-dhDBdL-dhDnH6-dhDHuu-4oP4Gh-5oxAti-9kuPk-9S1Ggr-a4bFt2-moGa8-6HEE7b-7j1Me5-9XXyup-9YmiBY-oibFks-ojZ3LB-oibG53-oie2HR-moJZo-dDweN8-4Ya9yX-4RL6gw-8sN9uq-8sN9p5-55xcn9-6Q9dW-5Y3Tia-58AGvy-8KWhNw-5a1vdq-55t1j8-9WiZjn-dhDriy-dhEx5n
- And this! Original: https://https://www.flickr.com/photos/stijnbokhove/2682021398/in/photolist-3jcUvd-aZRfox-6stty7-fPcJNE-dmBkRf-9tjTWt-7hWcvm-hdVE8J-8FYcQn-akbYL6-hah9pN-4tgef9-dzSDjs-diEQTi-qn4WFD-kkP5XR-6PMauj-7V1z4F-dUjdv1-op6ASb-3cvc76-brp1BG-ctsMvY-5Dd42b-5614wf-8bybYV-48vY6Z-aWPVdR-b2pV3M-d9bYtm-kgrscn-fmzdor-pwJxWE-fiEnLk-m66wke-a5RxuF-pvFiC-94M526-6G32cM-akxSiC-KuCaf-hvS6BT-nsKuKD-oj3DXg-bp4XDJ-nTfAZK-narfgy-5X2r5r-dWccAY-7yZwQu
- Other models? Yes—membership (have to get them back, TWICE marketing. To sell membership and then re-selling each event)