TRG's Strategic Marketing Counsel for Navigating Economic Downturn
Don't panic.
Go back to basics.
Rick Lester, TRG's Chief Executive Officer, outlined details on how arts marketers can Grow Ticket Revenues in an Economic Downturn
in his presentation to the 2008 National Performing Arts Convention (NPAC) in Denver on June 12, 2008. See the full presentation.
The keys to surmounting negative economic impact on ticket sales are:
- Sound decisions on budget and programming
- Right-sizing marketing investments
- Allocating expenses to maximize revenue returns
Q: Is it worth the time to ask for ticket buyers' names? A: Absolutely.
A patron calls or comes in person at lunch time to buy tickets - as quickly as possible -- for an
upcoming performance or event. It is 15 minutes before curtain and those waiting in line to get their
tickets are hurried to their seats thanks to "quick sale" features on the ticketing system.
The very short cuts that have become standard operating procedure for servicing patrons quickly also
are costing organizations future revenue. Why? Too many organizations do not collect the patron's
name and contact information for their database.
With no means of future contact, organizations nationally lose millions of dollars in future revenue opportunity. TRG's seminal 2003 study and ongoing examination of patron behavior have shown that each single ticket buyer's name can be cultivated into $4.51 in subsequent revenue. Yet, even among America's greatest arts and cultural organizations, the rate of patron contact information collection is dismally low.
Organizations that do a good job of collecting patron contact information and developing patrons' continued attendance can earn as much as $35 per single ticket buyer in the next season. Single ticket buyers represent 78% of all subscribers and subscribe eight times more often than those with no single sale history.
TRG's conclusion: Organizations should strive to collect patron contact information with every transaction. The key success factor is: ask! Be prepared to request the patron's name, address, phone number and email address in every selling situation.
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Q: Can rented lists increase new subscribers? A: Data analysis says: no.
Many organizations still mail a season brochure to every single person on their house list plus all the traded and rental lists they can muster. That approach is a wasteful allocation of resources, TRG's ongoing examination of subscriber response has consistently found. Inevitably, too many brochures are printed and mailed to households that are highly unlikely to respond.
National-level findings are clear. Poorest response comes from rental lists which account for only four-tenths of one per cent of all new subscribers. By comparison, ticket buyers with recent purchase history account for 19% of new subscribers and traded lists, 3.5%. More compelling yet are the data on the cost of mailing subscription brochures to rental lists. TRG's 2003 groundbreaking study on national response analyzed mailing of subscription brochures to 3.6 million rental names at a cost of $1.8 million. All rental list segments yielded an overall national total of only $77,000 in subscription revenue - it cost $23.38 to generate $1 in subscription sales using rental lists.
TRG's conclusion: Increasing subscription sales at optimal cost-of-sale requires smart targeting. The most cost-effective way to find the biggest pool of likely subscriber prospects is through analysis of subscription response using conversion reporting or, better yet, predictive modeling.
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