I was reminded of this essential property from a progressive article talking about taxes on the wealthy. The author relates:
I used to own a business and have been in senior positions at other businesses, and I know many others who have started and operated businesses of all sizes. I can tell you from direct experience that I tried very hard to employ the right number of people. What I mean by this is that when there were lots of customers I would add people to meet the demand. And when demand slacked off I had to let people go.
If I had extra money I wouldn't just hire people to sit around and read the paper. And if I had more customers than I could handle that -- the revenue generated by meeting the additional demand from the extra customers -- is what would pay for employing more people to meet the demand. It is a pretty simple equation: you employ the right number of people to meet the demand your business has.
If you ask around you will find that every business tries to employ the right number of people to meet the demand. Any business owner or manager will tell you that they hire based on need, not on how much they have in the bank.
This is something that I could relate to as an entrepreneur, and though the push of the article in question is about taxes, it applies as much to arts organizations in general. There's no magic solution, no savior business model, no technological wizard that substitutes for butts in seats.
And so if we're to turn to dredging up demand that doesn't presently exist, we need to think outside the box.
1. Diversity: Scott Walters spoke eloquently at TEDxMichiganAve of the need to direct money towards underserved communities. While Walters was primarily speaking of rural communities that absolutely can and should have arts organizations to serve them, I look at the tremendous number of predominantly white, young, male, upper-middle class, urban theatre companies around Chicago and around the country and despair just a little. If another company wants to get funding, our government and foundation sources really need to say "You're on your own."
By the same token, Walters equated organizations like Steppenwolf or Arena Stage that have been around for decades and still find themselves dependent on foundation and government funds to being like a 60-year-old living in their mom's basement. While I can see the argument for foundations and government supporting specific programs that align with objectives that that group wishes to invest in (and then only for a limited time to get the program off the ground), I fully support the idea of encouraging the NEA, state arts agencies, and foundations to move to a "venture capital" system that concentrated on expanding the groups that meet specific needs of under-served markets, geographically, demographically, and so forth. This has tremendous potential to expand the number of people attending the arts, as I continue to fully believe in the statement I put forth that the best way to tell someone you don't care about them as an audience member is to never put someone they can relate to onstage (and/or writing the piece, designing sets that feel familiar to them, etc.).
2. Dynamic Pricing. I feel strongly that this is a positive tool for reaching out to new audiences without sacrificing (and likely even increasing) revenues. It requires sophisticated box office/CRM systems, but the ability to better target price elastic groups is critical. Being able to better offer solid strategies for filling the seats is only strengthened with flexibility in prices. When paired with strong experience management techniques that develop relationships beyond the transaction, dynamic pricing can open doorways wide open that are currently closed.
3. Participation. Another theme at TEDxMichiganAve brought up by several speakers (Gwydion Suilebhan, David Dombrosky, and David Loehr most prominently but put out there in various forms by many) was participation of audiences in the artistic process. Arts education participation has long been understood to strongly influence participation later in life, but now we're seeing that current participation also increases the likelihood of participation as an audience member. Certainly, we can't stop the floodgates opened by YouTube, Flickr, and other social media venues, nor would we want to as these are our primary target markets of people that clearly enjoy the arts, even if they don't yet make the connection between what they do and what we do!
This needs to go beyond social media however. Finding ways of involving audiences in the artistic process needs to be a live and continuous objective if we expect new audiences to value live and continuous involvement in the arts. Advisory councils, auxiliary boards, and so forth can fill part of this need. Opening up invitations for patrons to get involved in season selection or inviting them into workshops and rehearsals to hear what they think or inviting them to make suggestions wholesale or inviting them to reinterpret things they've seen on stage for a small group or anything else that your artistic staff is comfortable with can create intimate connections with your arts organization that simply aren't possible via social media.
And it will be that connection that increases loyalty to your organization. With loyalty will come additional value to capture which the non-profit model allows you to capture via individual donations, something not possible in any other model. It will drive demand to your door and turn customers into patrons into donors into advocates which will in turn drive even more demand.
And that's exactly what we need right now.
I’d like to add a bit of a twist on the assumption that getting ‘butts in seats’ is a form of creating demand. The standard mission of an orchestra’s marketing department is to broaden the audience base; I understand the math behind it all. My concern however, is that when the mission is to get people in seats, no one is tending to the need to create value and desire for live orchestra performances.
ReplyDeleteHere’s an odd example. Let’s say we sell cars, and we give our marketing department the mission of getting butts in seats. The more people who drive our cars, the better. So, we offer our cars to the public in many ways. For the folks who already own our brand of car and are loyal drivers, we will offer next year’s model at more than retail price. For those who may have owned our cars once, but aren’t current owners, we will offer our cars at a lower, easy-entrance price. Now, if you’ve never, ever owned our cars, we will give you a much reduced price, especially if you’re interested in the up-coming model and promise to drive it for one year. If you plan ahead and reserve a car it will cost more than if you appear on the door step of the show room just before closing time. Because butts in seats are so important, we will have our cars available for free if drivers pick up their cars in the park.
Soon you’ve done a great job at marketing and there are many butts in seats indeed! But what is the value now of your cars? The message mixed: if received in the park the value is FREE, if you’re ‘last-minute’ it is cheap. If you are loyal, it’s expensive. (we also offer a virtual car experience on CD at half the price so you don’t even need to own a car!) There will be few loyal owners, many brief relationships, i.e. much churn.
It’s the same car, made by the same people, yet the value range is across the boards. With orchestras, the same performance and performers are sometimes available for free, sometimes not. What is our value?
The most important question is -- What is our value? And how do we communicate this to our potential audiences? Currently, we present quite a mish-mash of conflicting info. Why are performances outside cheaper than inside? You hear the same music and players, yet the value shifts with location. Our value also shifts according to time of purchase and length of relationship, too.
Offering CDs and live streaming is another odd pricing system. Instead of coming to a performance, just listen to the music at half the cost. And we sell this as if it is an equivalent to the performance experience, though at a much reduced price. What’s the value of a live orchestra performance? I don’t know because we have so many messages out there. The butts in seats attitude is about getting people to hear what we do – at any price.
I know most arts people will declare that the value of music is ‘self-evident’ and so its value doesn’t really shift, regardless of the ticket value. I say it does. Value is created in the minds of those who desire. To go back to our car example. Who do you think will end up driving these cars when no one knows their value? Who will desire them? What is the value of a performance that is regularly given away while at the same moment also demanding steep prices? (I’m sure the car maker would consider the value of the car to be ‘self evident’ and find it demeaning to have to ‘defend’ the value of their car.)
Let’s refrain from giving our self away. To give our performances away on one hand, and then say ‘we are valuable’ on the other, no longer makes sense to people. And - our value isn’t self evident any more, because our ‘moral agenda’ is way out dated. (More on this another time)
Please Marketing folks - focus attention on creating value and desire for live music, and butts will appear in seats.