This article was originally posted as part of the Arts Marketing Blog Salon on Americans for the Arts' ARTSblog, which previews the National Arts Marketing Project (NAMP) Conference in November.
A few weeks ago, Ben Cameron led an online workshop with TRG Arts for arts executives from around the world. In it, he dropped this truth bomb: "Positive financial results give you artistic freedom... Manage with excellence so you can program with courage."
His statement unearths a profound disconnect about fueling change in the arts industry—we want to see change without paying for it. If we’re not careful, the car will stall out, pointed in the right direction, out of gas.
Reaching new audiences is imperative—and expensive.
The industry conversation is buzzing right now with ways to reach younger and more diverse audiences—“outreach” must be replaced by meaningful community engagement, programming must evolve with audiences, and the arts experience must shift to be welcoming and digitally engaged. The excitement is palpable and I believe that change is happening.
The elephant in the room? Customer acquisition is expensive—even more so when you’re reaching patrons who don’t look like your current ones. Here’s an example:
· Getting someone to buy their first single ticket requires a big, multi-channel marketing investment with a compelling (e.g. cheaper) offer. When they do buy, the financial return is relatively small.
· Getting a subscriber to renew and add-on a donation can be as simple as sending one blind renewal even before the season program is set. They renew at a low cost, and the financial return is significant.
If customer acquisition is expensive but new audiences are important, how will we afford this important but expensive focus on new audiences? Right now, there are many corporate and foundation funding opportunities to execute audience development plans. But how do we keep this momentum, so that it sticks around long after funders move on to other priorities?
Today’s audiences will pay to cultivate tomorrow’s.
You can’t innovate from a place of scarcity. Imagine if you added a new dance program to reach young professionals and a new staff member paid to run it. Imagine if you introduced a Spanish-language theatre series and had a staff team with bandwidth to connect authentically with Latino communities. Imagine if your artistic director could program a provocative new work on a difficult social issue, knowing it might not sell well.
Innovation requires a strong balance sheet, and the biggest opportunity to build that is through the people who are coming through your doors today. Are you keeping them?
TRG’s late founder Rick Lester used to say, “Arts organizations over-prospect and under-retain.” We work so hard to attract new audiences, and yet research shows that four out of five new audience members never return. When organizations change this—when they cultivate those new buyers and turn them into returning buyers, subscribers and donors, they have the potential to blow past their revenue goals. And they build working capital that can be leveraged into artistic innovation and community engagement.
People form the most sustainable revenue base for arts organizations—their ticket and subscription purchases and their donations will sustain our arts organizations through times when funders and corporate sponsors focus elsewhere. Only when we seek to grow the loyalty of every person who walks through the door—from the first-timers to the long-timers—will we see the sustainable revenue that allows us to innovate and grow.
Change requires fuel. A dedication to new audiences, fueled by cultivating the love and support of current audiences, is the only way to build organizations that are not just sustainable but adaptable and relevant for decades to come.