TRG blog: Hung up on renewal rate? Measure this too. [VIDEO]
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TRG Blog: Analysis from TRG Arts


Hung up on renewal rate? Measure this too. [VIDEO]

Amelia Northrup-Simpson | October 13, 2015 4:31 AM

This is the fifth video in our series on the 6 metrics that arts leaders should be tracking and managing. View all the videos in this series here>>

Measure What Matters: 6 Metrics Arts Leaders Should Track

Metric #5: % of subscriber-donors

Is renewal rate the best measurement of loyalty? While it shows how many subscribers or members arts organizations are retaining, it doesn’t indicate if patrons are growing in their loyalty. In this video, Keri Mesropov of TRG Arts explains why renewal rate can be deceptive and the metric arts organizations should consider tracking alongside it.

Why measure the percentage of subscriber-donors?

If I asked you about the most important metric to track subscriber and member loyalty, your answer might be renewal rate. It is important, but can be deceptive.

Some performing arts organizations have a 90% subscriber renewal rate, which they’re proud of. They should be, but it could also be a sign of stagnation.

Why? Often when the renewal rate is very high, it’s because the majority of people who are renewing are long-term subscribers, who renew at very high rates. Even with a best-practice renewal campaign, renewal rates for new subscribers don’t often top 60%. If there were more newbies in the subscriber pool, the total renewal rate would be lower—and that would be ok, as long as subscriptions were stable or growing overall.

What we often see is organizations with high renewal rates, but a declining number of overall subscribers. These organizations are very good at keeping existing subscribers, but not so good at attracting new subscribers. The number of new subscribers doesn’t keep up with even the small number of existing subscribers that the organization loses each year.

So, a high renewal rate can actually be a warning sign. Look at it alongside the ratio of new to existing subscribers, how subscriptions are trending overall, and how loyalty is growing in other ways. For example, many long-time renewing subscribers choose to deepen their commitment to and investment in an organization by making a donation.

How to measure the percentage of subscriber-donors:

We recommend that you pull this data point this from your last completed season or financial year, since many donors give at the end of the calendar or financial year or with subscription renewal. You’ll want a complete picture of donorship from that year. You’ll need two numbers:

  • how many subscribers made a donation that year
  • total number of subscribers that year

Divide like so:

If you work at a museum or membership-based organization, you’ll want to measure the percentage of members who made an additional contribution of some sort.


You can also calculate this number for your current year or season. Then you can compare the number from the last completed year or season to see how far you have to go to match last year’s number.

What the percentage of subscriber-donors tells you:

This measurement is not just about retention, like renewal rate. Instead, it tells you how many subscribers and members have grown in their loyalty with your organization by becoming donors. A patron might subscribe to get the best deals and access to tickets. That value proposition changes once a patron makes a donation, which is why subscriber-donors and member-donors have a higher lifetime value and are easier to renew.

What’s normal? Here are the ranges we typically see:

  • 31% or above: Keep up the great work!
  • 24-30%: You’re doing fine.
  • 17-23%: On the low side of normal.
  • 16% or lower: You have opportunity here.

Basically, this metric tells you if subscribers or members are making the choice to upgrade with a donation. But it can also help you understand the following issues at your organization:

1. First, are departments at your organization working together to develop patron loyalty? Marketing and development tend to handle certain patron types, with marketing handling ticket buyers, subscribers and members and development handling donors. These two departments are responsible for patrons at different points in their evolution, as demonstrated below.

But what happens in the gap between marketing and development? Who’s cultivating those subscribers who are ready to be donors? Departments should work together on initiatives to ask subscribers or members for an additional gift, especially at renewal time.

2. This metric is also a larger indicator of how loyal your most active patrons are. Subscribers and members are the patrons who are attending the most. Do they see value in donating too? Patrons who subscribe and donate do so because they want to support the organization and underwrite its success.

3. Lastly, this number says a lot about your potential for major donors. If your number was 31% or above, you’ve got a bigger pool to cultivate up your giving levels. And if you were on the lower end of the spectrum, it tells you that you could have a lot of success with a formalized upgrade program to get your subscribers or members to donate. In the above video, Keri talked about 5th Avenue Theatre’s subscriber-to-donor upgrade program, called Super Subscriber. After seeing that they had opportunity to grow this metric, 5th Avenue Theatre reached out to subscribers who had already renewed or purchased a subscription, and asked for an additional $100 in exchange for specific, experience-related benefits.

In just four months, they developed 453 Super subscribers who gave a total of $51,000. 25% of them were brand new, fairly new, or newly-returned subscribers.  And 70% had never donated before. That’s a great model for developing those donor-ready patrons.


Featured in this video:
Keri Mesropov

Keri Mesropov leads TRG’s team of consultants, and database and analytics specialists who work on behalf of the firm’s clients throughout North America and abroad.  She also serves as lead consultant for scores of clients including Chicago Symphony, New York City Ballet, and Boston Ballet.  Her own work and the consulting, database management, and business intelligence services she now presides over have generated millions of revenue dollars—earned and contributed—for opera, dance, and theater companies, orchestras, arts centers and festivals.  Keri manages TRG’s counsel on integrated patron loyalty programs, bringing together colleague departments across organization silos to build stronger, longer paid patronage. 

Before coming to TRG, Keri worked for 17 years as an arts administrator in marketing and development. Her career in dance administration includes eight years as director of marketing and public relations for Colorado Ballet, and five years with The Washington Ballet where she first served as director of marketing and communications and then as director of external affairs overseeing both earned and contributed income. Keri has also freelanced for various companies including Eifman Ballet of St. Petersburg, Trey McIntyre Project and served as associate director of marketing for Washington Performing Arts Society in Washington, DC. Originally from Colorado, Keri holds a Bachelor of Journalism from the University of Nebraska.



Other videos in this series:


Metric #1: Patron-generated revenue

Forget earned vs. contributed. It's all about how much revenue your patrons generate. In this video, learn why the earned vs. contributed classification can create siloes and why you should also track patron-generated revenue. More>>
 

Metric #2: Active patron participation

Active patrons are the patrons an arts organization serves today. But will they still be there tomorrow? It depends on how YOU cultivate them. In this video, learn how and why to measure active patron participation. More>>
 

Metric #3: Data capture rate

To cultivate an arts patron, you’ve got to know their history with your organization first. That starts with data. In this video, learn why capturing contact information can mean serious revenue gain—or lost opportunity. More>>

 

Metric #4: New audience churn rate

Churn. Attrition. Turnover. Call it what you will; the fact is, you’re losing new patrons. In this video, learn why retention matters, how to measure your risk, and a 4-step process  to reverse churn at your organization. More>>

 

Metric #6: Per capita revenue

Is your arts organization generating the most revenue it can for each patron? There’s a way to measure that! In this video, learn how to figure out if your pricing strategy is causing you to lose money. More>>






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Case Study: Lyric Theatre of Oklahoma

Annual operating budget up 32% in 5 seasons

Lyric Theatre of Oklahoma 
 Photo: Joseph Mills

After a poor year for earned revenue in 2012, Lyric Theatre of Oklahoma (LTO) had rebounded and was experiencing a growth spurt. In 2013, Director of Marketing Danyel Siler had turned her attention to single tickets.

Her hard work had paid off, but season tickets were still a challenge. “Season tickets were steadily declining,” she said. “The season ticket campaign had been done the same way for years, maybe even decades. And we blamed the fall on the trend that subs were declining everywhere. Our executive director, artistic director, and I all knew something needed to change, but we didn’t know what.”

Read More>>


Killer Group Sales Campaigns

A boot camp for arts marketing and fundraising leaders


Friday, August 18, 2017 
Online Workshop (11am-2pm MDT)

Do group sales contribute less than 10% of your single ticket revenues? Does your organization only sell tickets to groups reactively? Are you setting group sales goals only to fall short every year?

After subscriptions, group sales is the most important ticket-buying group for an arts and culture organization to cultivate. In this one-day session, learn how to leverage your group sales program to create a renewal base of loyal customers, while also driving new patrons to attend, all by tapping into the social networks that already exist within your marketplace. 

You’ll leave with your own, unique group sales campaign plan for next season, front-line sales strategies, and projections of what is possible for growth.

Contributors


Jill Robinson
Adam Scurto
Amelia Northrup-
Simpson
J.L.Nave Vincent VanVleet Keri Mesropov
 

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