This is the fourth video in our series on the 6 metrics that arts leaders should be tracking and managing. View all the videos in this series here>>
By “them,” we mean your patrons. When we consider how arts organizations lose patrons, it’s not the long-time, committed patrons that are most likely to leave. Your most at-risk patrons are those new audience members and visitors that you worked so hard to attract in the first place. TRG’s Director of Consulting Jim DeGood explains how to measure your risk:
Measure What Matters: 6 Metrics Arts Leaders Should Track
Metric #4: New audience churn rate
Churn. Attrition. Turnover. Call it what you will; the fact is, you’re losing new patrons. With few exceptions, arts organization over-prospect for new audiences and under-retain them. In this video, Jim DeGood of TRG Arts explains why retention matters, how to measure your risk, and a simple 4-step process for retention that you can implement at your own organization.
Why measure new audience churn rate?
New audience churn rate answers one simple question: How many new ticket buyers or visitors do we lose each year?
Why is this number important? Well, if you’re like most organizations, your marketing department spends a lot of time and money attracting new audiences. But are you also spending time and money on keeping them once you’ve got them? Many organizations don’t.
When we studied this metric with a group of performing arts organizations, we found that, on average, 4 out of 5 patrons bought one ticket and never purchased another. That’s 80% of newbies. When you’re trying to build a sustainable organization which relies on engaged, fanatical audiences, this is really bad news.
You’re going to end up spending a lot of time and energy filling and re-filling what is basically a leaky bucket. When you start focusing on loyalty and retention, you can begin to focus on patching up the holes instead.
How to measure new audience churn rate:
Find these numbers:
- What was your last completed season or year? Go back one year from that and find how many of your patrons were new. You can usually find this in your database by finding out how many patron records were created that year.
- Second, figure out how many of those patrons didn’t come back last season.
Then divide the number of patrons who didn’t come back by the number of new patrons, like so:
This is the most basic way to measure this data point. You can also go back several years and see how many haven’t come back for two years, or even five years. But, as Jill said in her video, recency rules. The patrons who have attended in the last two years are much more likely to continue attending. After that, you may have lost them for good.
What new audience churn rate tells you:
The most useful application of this metric? It tells you if you really and truly have a challenge attracting new audiences. Most organizations think they have this problem, but most actually attract enough new audience members a year. On average, 50% of households are new, according to our research. The problem starts when 80% don’t return. It gets worse if you’re not able to attract enough new patrons each year to replace the 80% who churned through.
When you get more patrons to come back and lower your churn rate, you can begin to grow loyalty—and revenue—for your organization.
Remember, too, that relationships take time. Loyalists are made, cultivated over time—not born. A loyal relationship is like a romance. You wouldn’t ask someone to marry you on the first date. Similarly, most patrons first move through ticket buying and subscribing before they think about making a donation, the highest ROI activity for arts organizations. For most first-time patrons, the right next step is a second ticket or visit—what TRG often calls a “second date.”
In the above video, Jim explains the example of Seattle Repertory Theatre, which created a 4-year program to cultivate new patrons from first-time buyer to renewing subscriber. Read more about that case study here, or watch the webinar here.
Featured in this video:
Jim DeGood is Director of Client Services at TRG Arts, managing a team of analysts who work to innovate TRG’s best practice counsel. During his time at TRG, Jim has gotten results for clients like Guthrie Theatre, Cincinnati Playhouse in the Park, Actors Theatre of Louisville, Kansas City Ballet, and Charlotte Symphony Orchestra.
Jim has 18 years of experience in performing arts management, including marketing and executive leadership posts at the Unicorn Theatre, Lyric Opera of Kansas City, Kansas City Symphony and Kansas City Repertory Theatre. Additionally he directed the performing arts grant programs for the Mid-America Arts Alliance. Jim worked in public relations prior to entering the performing arts. He holds a master’s degree in Arts Administration from Goucher College.
Other videos in this series:
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>>
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>>
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>>
Is renewal rate the best measurement of loyalty? In this video, learn why renewal rate can be deceptive—and the metric arts organizations should consider tracking alongside it. More>>
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>>