|Photo by opensource.com (CC BY 2.0)
At the beginning of this year, the NEA came out with a report on why people attend the arts. This study struck a chord with me, because it momentarily put aside the question of whether arts attendance is growing or shrinking and instead focuses on why people actually come to the arts in the first place. The study found that 83% of arts participants value “being devoted and loyal.” This aligns with TRG’s own research, which suggests that it’s no longer enough to know whether you're hitting attendance goals. The question has evolved from "Are audiences growing?" to "Are audiences growing more loyal?"
The NEA report suggests some ways to overcome barriers to arts participation, among them community engagement. Decision makers and funders in our field seem to be thinking more in recent years about what makes an arts community healthy, and how to measure engagement across communities.
We recently did a study with the Greater Philadelphia Cultural Alliance which studied how audiences interact with different arts organizations across a community. (Full study here.) Spanning 7 years and studying nearly 1 million arts audience households from 17 arts and cultural institutions, this study looked in-depth at loyalty within organizations and engagement across the community.
The study also organized patrons within each organization and across the community into three simple loyalty categories based on the size of their investments:
Advocates: The most loyal and most invested patrons. Staff are likely to know the names or faces of many of the folks in the Advocates category, as they tend to be board members, major donors, and long-time member-donors or subscriber-donors.
Buyers: Buyers contribute less on a per capita basis than Advocates, but are still loyal subscribers, members, donors, or even avid single ticket buyers. They tend to invest in a variety of ways—what we call the magic of “and”.
Tryers: Tryers are the least loyal group, spending the least per capita. They also tended to be the largest group in each dataset. Tryers are new audience members, one-time ticket buyers or visitors, and occasional attendees.
While this study was done in Philadelphia, the findings have impact for arts communities nationwide. Here are some of the most relevant findings:
Advocates sustain the arts
This study confirms that what’s true for individual arts and culture organizations is also true for an entire community: a disproportionately small group of patrons contribute a large majority of revenue.
In the Philadelphia community, Advocates represented 0.3% of all patrons who participated in the arts, but provided 39% of the total revenue. These 3,418 households play a major role in sustaining the arts sector in Philadelphia.
In contrast, Tryer households provided nearly the same percentage of revenue at 37.8%. However, there were 955,985 Tryer households in the study. In other words, it took nearly 280 times as many Tryer households to provide the almost the same amount of revenue as the 3,418 Advocates.
Competition is not a factor: multi-organization buying strengthens loyalty
An important retention and engagement pattern emerged when we looked at patrons who bought at multiple organizations in Philadelphia. 92% of patrons in the study participated with only one or two organizations.
The prevailing wisdom in our industry is that patrons have limited time and resources to invest in the art and culture of their community. While organizations in a city may not be in direct competition with one another, there is a certain amount of friction as we vie for the scarce resource of customers’ time, money and attention. We put that theory to the test in this study by using each organization’s loyalty analysis. Our experiment: does the number of organizations a household visits have any effect on their loyalty to each organization they visit?
We measured all the engagement of patrons that visited one or two organizations. You can see below that 3% of the time, these households were Advocates with an individual organization, 8% of these patrons were Buyers, and 89% were Tryers. When we expand that to patrons engaging with 3-6 organizations we see a slight uptick in the percentage of Advocates, and a doubling of the likelihood to become a Buyer. The trend continues as more organizations are visited.
What does this mean? The more organizations that a patron visits, the deeper their loyalty to each organization becomes. The patrons we share across the community tend to be more loyal than the patrons that organizations keep to themselves.
This finding reinforces the real and tangible value of trading lists as a strategy to build a healthier arts community while also fortifying audiences at each organization.
The importance of upgrading
In addition to deepening community engagement by cross-pollinating audiences, organizations must look within their own database to identify opportunities to grow loyalty and revenues. Over the study, only 3% of Buyers upgraded to Advocates, and only 0.5% of Tryers upgraded to Buyers. Mindful and strategic efforts around upgrading patrons must be embraced by both arts and culture organizations and the community as a whole.
Perhaps the most important quality of the Advocates in Philadelphia is their staying power. Despite a 16% decline in overall audiences over the study, Advocate households only declined 2%. This means that the most loyal patrons already engaged in the arts aren’t leaving, while those customers that we work so hard to acquire from outside our own databases are churning through at much higher rates. We know how to treat our Advocates with tender love and care, and we know how to find new audiences for one night. Our struggle is to bridge the gap between the two – it’s hard work, and it begins with a focus on retention. Turning a first-time ticket buyer into a second-time ticket buyer is difficult, dirty work, but it can have a huge impact.
“While expanding audiences remains critical for the long-term,” says John McInerney, Cultural Alliance Vice President of Marketing & Communications. “Retention and engagement of current audiences may be the most important strategy for an organization’s bottom line.”
The major conclusion of this study is that organizations must think about developing audiences in two ways: deepening loyalty within their organization and engaging the community in partnership with other cultural organizations. Arts organizations that collaborate can strengthen their own patron base as they build healthier communities.
There were so many interesting findings from this study, we decided to do an hour-long webinar on it. Join TRG’s Jill Robinson and the Cultural Alliance’s John McInerney on May 13 at 2 EDT/11 PDT to hear more on this ground-breaking study and its implications for the field. Register here for the “Better Together” webinar>>