Here’s the data* – we all know it:
- Somewhere between 60% and 80% of single ticket buyers never return.
- Multi-buyers (including subscribers) can account for over 50% of all ticket income and more than 80% of all donation income, yet comprise around 25% of all patrons
- Churn numbers can exceed 80% for single ticket buyers, 20+% for subscribers, and around 50% overall
These numbers cause marketing directors to age prematurely. Says one: “I’ve been a marketing director for a dozen years. There must be something I can do to increase the number of attenders. I hate standing still. There must be something we can do to slowly increase the numbers. Growth is very slow. We have a high renewal rate for some packages, but I’d like it to be higher. The biggest challenge lies in one-time single ticket buyers. There are so many each season. Surely there is something we can do with them. How can we identify/entice move more single ticket buyers into more frequent attendance and towards subscription?”
Here’s a suggestion: Set moderate goals and create a plan to achieve them. For example:
Single ticket buyers
You should be able to identify new-to-file buyers and some behavioral characteristics such as: what they saw, what they paid, where they sat, and when they made their purchase. Armed with this information you could devise a few marketing strategies:
- Contact all new-to-files before and/or after their purchase and offer an incentive to return.
- Our data shows that many “oncers” choose to see the most popular performances (the blockbuster musical, the star conductor/performer, the well-known symphony/opera/ballet) and rarely return -ever. It may not be worth your effort to ask them back. Our client data shows that most of these patrons buy either early or late. Make sure your prices are set to maximize revenue from these purchases.
- For a “oncer” who purchases a ticket for a less-popular title – indicating they may have a special interest in your organization- offer them information and possibly an incentive about a similar event later in your season.
High value multi-buyers
Organizations focus a substantial amount of their marketing and development efforts on retaining them, which makes sense. However, the data used to identify these patrons is based on averages. What about those patrons who are “on the margin?” We see client data where the top quartile of valuable patrons brings in an average of over $1000; the second quartile spends around $200, the third around $100, and the fourth around $50. As there could be tens of thousands of patrons in each quartile, try dividing those quartiles into smaller segments. For example:
- The lower third of the top quartile may spend closer to $500 than $1000. Have their buying habits changed? Are they at risk, without knowing it, of dropping into the second quartile? What can you do to keep them in the top quartile?
- The top third of the second quartile may spend closer to $500 than $200, but their value may be rising. What can you do to migrate them to the top quartile?
When subscribers leave they take their ticket and donation income with them. And these dollars are extremely hard to replace. From our clients we see how difficult it is to gain new subscribers, who frequently account for 10% or less of the subscriber base. What can be done?
- Take a page from the Chicago Symphony’s “surprise and delight” program, which targeted first year subscribers and reduced churn by 20 points (for more information see this video from the Tessitura Innovators Series)
- Don’t try and get there all at once. Our client analysis shows that a 2 point drop in churn could bring in upwards of $1.5 million in total income (earned and contributed) over a three year period.
To sum up: As the comedian/banjo player Steve Martin used to say “Let’s get small.” Try tackling part of the problem instead of all of it. That may turn out to be the fountain of youth for beleaguered marketing directors.
*Source: The Pricing Institute client data across multiple genres
Steven Roth will be speaking at the following sessions at our National Arts Marketing Conference on November 8-11 2013 in Portland, Oregon:
Preconference: Unlocking the Value Equation: Navigating the Art of Psychological Pricing