Virtual Discussion Panel
:: Marketing in a Recession
:: March 2 - 11, 2009
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About this Virtual Discussion (Click to Hide)
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Ann DrinanSenior Editor |
Chris and I have assembled a panel of orchestral marketing experts from The Cleveland Orchestra, the Kansas City Symphony, the Virginia Symphony, the Royal Scottish National Orchestra, and the University of Hartford.
I've summarized Chris' article below, but I urge you to click here to read the article in its entirety. His detailed thoughts about Perpetual Acquisitions and Perpetual Renewals are worth reading in full and will hopefully spark some discussion from both our panelists and our readers.
Panelists
Christopher Stager's Opening Statement (Click to Hide)
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Christopher Stager |
Now is the time to plan and identify marketing tactics for these times. I have considered a few strategies and appropriated several from other colleagues.
Send Renewals the Week of January 19, 2008
If you must raise ticket prices, it would be best to hold the increase until after the subscription renewal deadline. Then you can present the renewal/priority offer as: "No price increase when you order by March 15!" The price increase can almost look like a benefit.
Comp Unemployed Renewals
Offer free renewals to subscribers who have become unemployed. Following the collapse of Enron and WorldCom, Houston Grand Opera made such an offer publicly to former Enron & WorldCom employees, and received excellent publicity in the press.
Secure an Annual Fund Gift from Non-Giving Subscribers
Subscribers are more likely to renew if they have given even a token Annual Fund gift. Securing that annual fund gift from the non-donating subscriber, particularly at-risk first-year subscribers, is certain to boost subscription renewal rates.
Family Pricing
In halls where available capacity exceeds reasonable demand, or for a series with a lower subscriber base, encourage families to bring children 8 to 16 for free. (Traditional discounted student prices can apply for those over age 16.)
Discounts for Under 30
Our most elusive demographic is younger, college graduates up to about age 35. Not surprisingly, their slight disposable income is elsewhere committed. Additionally, this most splintered and fragmented demographic is also the most expensive to reach. The special offer for those under 30 (perhaps the price we are currently offering to seniors) can be made from a third-party sponsor, acknowledging them for underwriting the discount.
Perpetual Acquisition
The barriers to new subscription acquisitions are time and process. New acquisition campaigns tend to happen between April and September. The window is relatively brief, and once the new season begins, existing series are stripped down into shorter, pro-rated series at lower prices. However, marketing expenses generally do not decrease.
Let us consider a new model - Perpetual Acquisition, a year-round subscription effort. If single tickets are strong in February, capitalize on buyer enthusiasm with the offer for them to return immediately as a March through January subscriber. Three of their concerts would be in the current season, the remainder in the following season. Rather than a pro-rated package, a full season is offered. Each series is an eleven-month cycle, with the subscription renewing automatically during the twelfth month. In this model, the renewal is not requested. If the subscriber no longer wishes to subscribe, she must "opt out" of the season.
Monthly Payments
How does this new breed of subscriber absorb this discretionary expense into his budget? By spreading the cost across the calendar year in easy-to-digest payments. "Perpetual Acquisition" leads to "Perpetual Renewal," as subscribers are renewed exactly twelve months later.
Summary
Perpetual new subscription campaigns, low monthly payments, "right pricing" to attract new audiences, annual fund efforts targeted to invest at-risk subscribers - all these are tactics for a challenging economy. It will be essential to anticipate the weakness of the market place by meeting the challenge directly by having strong pro-active, pre-emptive responses in place.
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Jeffrey Barker's Opening Statement (Click to Hide)
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Jeffrey BarkerDirector of Marketing, Kansas City Symphony |
At the Kansas City Symphony, we've been able to expand both our younger Family audience, and our high school and college audience, by creating special price points and by better promoting student pricing already in place. The subscriber base of our four concert Family Series has grown threefold in the past three years, due in large part to our Kids Free offer. For every adult season subscription purchased for our Family Series, the buyer receives a free child subscription. This has also resulted in Family Series subscription revenue growing nearly 250%! Because the series is nearly sold out on subscription, there is great demand for any remaining seats and they sell at full price. If demand is unusually high, we have the option of adding another performance of the same concert, as we recently did with the Peter and the Wolf Oscar-winning short film. This strategy helps us save a great deal on marketing costs while maximizing revenue.
For the high school and college crowd, we've been much more forward about advertising our $8 student ticket. Our unique concert experience is cheaper than a movie ticket! We've created simple collateral (mini-posters, fliers, even small ads in student newspapers) all at very low cost. We've seen the sale of student tickets more than double in the past two years, building a stronger base of future audiences.
Even with the current state of the economy, our core audience is motivated more by the quality of the product on stage, the caliber of guest artists, and strength of the repertoire. It is our audiences on the periphery that seem to be motivated by price. To address price and overall perceptions that a Symphony ticket is expensive, we have a special section of seats at every concert priced at just $10. We've also created a First-Time subscriber price, that breaks down to just $14 per concert. Our Tessitura ticketing system gives us the flexibility to schedule automatic payments for customers, so we can easily break down the cost of a subscription purchase into several smaller payments over time. This has been a very effective tool in our renewal campaign.
Regarding our renewal campaign, we are focusing more than ever on subscriber benefits. We've negotiated with area parking facilities to offer half-price parking for subscribers, when purchased in advance through our box office. We've offered free ticket exchanges for subscribers for many years, but promote this benefit even more prominently. We also have an arrangement with the Naxos online music library, offering free access for subscribers. Pointing out these great benefits to our subscriber base has helped us keep them in the Kansas City Symphony family.
A strategy that's helped jump-start ticket sales this winter is our Concert Cash offer. A simple postcard was sent to our database, offering a $30 discount on any single ticket purchase of $70 or more. The results showed that, when using this offer, people bought more tickets than usual and also bought more expensive tickets. This concept will be re-packaged for a Spring mailing.
Identifying objections and obstacles to a ticket purchase, and then addressing each one with a sales and messaging strategy, will help increase your ticket sales - even when the Stock Market doesn't cooperate.
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Comments for Jeffrey Barker
Ashley Mirakian's Opening Statement (Click to Hide)
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Ashley MirakianDirector of Marketing, Virginia Symphony |
Marketing Expense Management
Chris makes many great points about revenue generation. As marketing professionals, we're also facing pressure on our expense budgets. Here are a few suggestions for getting the best possible cost of sale.
It's a tough time for orchestras, but it's also a tough time for marketing vendors. Make the most of your relationships with printers, mail houses and advertising representatives. When times get tough, business slows, and vendors have more time to spend with you. Brainstorm together, take advantage of vendor promotions, emphasize creativity, and strengthen your business relationships.
Printers and Mail Houses
Meet with your mail house rep, and ensure you are getting the most bang for your buck with your direct mail.
1) Check your mail/address panel. The USPS has strict guidelines for what the mail panel should look like. For example, if the bottom of the mail panel is covered with graphics, it might obscure an inkjetted bar code, resulting in a much higher postal rate.
2) Generally, nonprofit bulk mail can be larger and heavier and still have the same postage cost as a tiny postcard. Make sure you go over the size constraints with your mail house representative. You'll have to get a good printing quote if you go bigger, but don't forget to quote large quantity jobs with at least three different print vendors and be creative with paper stock and formats. And, remember, "gang printing" multiple projects at one time is always a good idea as long as you know your content is not likely to change.
Advertising Representatives
We often have annual "contracts" with our print and radio vendors. These are generally great, because they lock in rates for an entire year, and placement is guaranteed and reserved in advance. During a recession, however, radio stations and newspapers have a ton of unpurchased inventory, and most of the time you can alter your "contract" without penalty. Check with your print reps on a regular basis to see if there are low priced "remnants" that you can take advantage of. You can save upwards of 50% off of contract rates. Likewise, see if your radio reps can offer no-cost promo spots as benefits to their listeners (e.g., "Visit WXYX.com for discounted VSO tickets!). You can also offer "media sponsorships," so that your vendors receive marketing benefits, and you receive in-kind trade to bolster your efforts.
Your annual commitment with vendors gives you leverage! Take advantage of it, and get what you need to be successful. Remember, they want you to be successful, because it means you'll continue investing with them.
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Margery Steinberg's Opening Statement (Click to Hide)
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Margery SteinbergAssociate Professor of Marketing, University of Hartford |
Chris raises several interesting ideas. Family pricing is certainly a strategy we have considered in the past. I think it is more important now not only because of the economy, but also because of a related reduction in music programming in schools. We will miss out on the opportunity to build future audiences if today's children are not exposed to classical music. Making it affordable and advantageous for families to come to concerts together will help young people gain an appreciation for classical music, which will be reinforced by the experience of sharing it with parents and grandparents. In addition to favorable pricing, orchestras should also include a pre or post concert experience geared to the entire family, and also perhaps some handouts or take-away materials to reinforce the musical experience at home.
Attracting the Under 30 crowd has also been a long-time goal of the classical arts. I agree with Chris...pricing is not the only barrier to success here. Young adults enjoy entertainment differently than the older generation. I recall taking my niece when she was in her late teens to a symphony concert in a summer venue. She had been exposed to classical music often during her youth, and also played a musical instrument. At the completion of the concert, I asked her if she enjoyed it. Her response was that she liked the music but had difficulty sitting still and "doing nothing" during the concert. Today's younger adults are so used to multi-tasking and to getting their music and information electronically, that the traditional live concert is more difficult for them to enjoy. We need to develop different concert experiences for different attendees to better meet their lifestyles and expectations.
On a related note...an article in Sunday's New York Times "Americans Flock to the Movies Seeking a Silver-Screen Lining" reported that movie attendance has jumped more than 16%, even as ticket prices rise and people are being more frugal when it comes to entertainment dollars. One explanation given in the article is that people are seeking an escape from the stresses caused by the economy and also want to be with other people who may be facing the same situation. Symphony orchestras certainly can provide similar opportunities in the concert hall, and need to reach out to distressed people through sharply reduced ticket prices and a "feel good" experience. This type of investment will help fill empty seats in the concert hall and will most likely pay off in building future audiences.
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Simon Woods's Opening Statement (Click to Hide)
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Simon WoodsChief Executive, Royal Scottish National Orchestra |
First of all, a disclaimer. I am not a "marketing professional"! I'm a Chief Executive (with experience on both sides of the Atlantic) who has a keen interest in marketing, development and public engagement.
Chris's article had many interesting points, but for now I'll respond to just one of them, which is Family Pricing. We noticed at the RSNO a couple of years ago that the revenue generated by under-16 tickets was absolutely minimal and that on the majority of concerts we had available ticket inventory - so the desire to open up concerts to young people led us to the inevitable conclusion that we should be letting them in free. Our programme ( www.passport2music.org.uk if you're interested) is very nicely sponsored by Standard Life, a major financial services company based here in Scotland. The deal is that with every adult ticket purchase, you can get 2 free under-16 tickets. On the micro-site there are dedicated child-friendly programme notes for every concert in the season, and there are competitions to enter, prizes to be won and the chance to sign up online. We are currently getting an average of around 40+ under 16s per concert, and we expect this to increase exponentially with a new phase of promotion in schools together with workshops next season.
The other critical thing about this programme is that it is all about marketing to the adults too. Many people are ambitious for their kids to do music and learn an instrument, but may not have ever been to a symphony concert. We want those people in our halls! Our hope is to use school orchestras, choirs and music teachers across Scotland to get to them and start to engage families, and the cross promotion possibilities with our schools concert programmes and family concerts are enormous.
Of course there's always the risk that we become the victim of our own success - we don't want to turn our regular evening concerts into young people's concerts! But we're finding generally that our regular audiences are not only noticing, but also enjoying the influx of young teenagers. Put alongside a pretty successful under-26 program, the change in the audience demographic is surprisingly noticeable...and quite invigorating to see this happening in difficult times.
On a more general note, I think the recession poses some real challenges to those involved in marketing - but not the ones that may appear obvious. The biggest challenge is the temptation to dumb down and retrench into bland conservatism - both in programming and promotion. We all need to hold our nerve through difficult years and go on doing an interesting mix of events that speaks to the broadest possible audience. Otherwise we'll come out the other end as plain vanilla organisations with an even more limited audience demographic. Easy to say, difficult to do...
I'll echo Margery's comment about a possible positive impact on sales. I'm not sure what the trends are in the US, but in the UK audiences seem to be holding up surprisingly well at the moment. All our anecdotal evidence says that people are still hungry to be uplifted and inspired, and are willing to fund it through spending some of the money they would have used to buy a new car, move house, go on vacation and so on. So whilst we can tweak around the margins with our marketing strategies, the big picture may be that there's an increasing opportunity to promote the emotional power of the experience as a balm in troubled times.
But there's also a risk of complacency: I was at the Association of British Orchestras Conference last week, and heard a gripping (and depressing) presentation by the Chief Economist of the Financial Times. The story is basically this: so far, this has largely not been a consumer recession - it is mainly in the financial markets and real estate. In 2009 all that will change and the impact of unemployment and fears for personal financial stability will mean that personal spending will dramatically decrease. So we'll all be holding our breath to see whether the trends hold or whether a real impact on sales will emerge...