What’s the Secret Sauce Today?


May 2011
Eugene Carr

 

 


It’s hard to have a serious conversation these days with an Executive Director without talking about the rash of bankruptcies, closings, and financial stress arts groups are under. And yet, for each example there seems to be an equally compelling example of an organization that’s doing extraordinarily well. It’s hard to pull apart real lessons here, but I’m going to try, based on a few recent encounters.

Earlier in the week, I spoke with the ED of a struggling symphony orchestra that was facing a six-figure deficit and rising. She told me she’s worried they may not pull through, because they have also lost hundreds of thousands of dollars of corporate and other funding, and her community has more than 15 percent unemployment. Dire circumstances indeed!


But then she went on to describe how her ticket sales  — particularly online ticket sales — are through the roof. They recently did a program that was more pops-oriented than their typical classical fare (something she fought hard for) and the program sold fantastically well. (We’re especially pleased because they just started using PatronManager CRM to sell subscriptions and single tickets online, and they have seen their online sales grow dramatically.) She was particularly thrilled that she could identify many of those online buyers as completely new patrons. She concluded by saying that she’s betting on the revival of her organization via earned income, rather than philanthropy, because that’s the only place where it seems like there can be significant growth, in this economy.

I was then speaking with a trusted and experienced executive who reminded me of the general wisdom in the arts. When describing what EDs think about most of the time, she said to me, “Look, EDs focus their attention on their boards and their major donors first and foremost, and then as a secondary activity they worry about building audiences.” As a former ED myself, I know that there’s a lot of truth to that because in the past, it was a lot harder to increase your ticket sales to fill a financial gap vs. simply asking a board member to write a bigger check.  


I read a blog post last week by Ken Davenport titled “How to to Drive your Non-profit into the Ground,” in which another related issue comes up. It’s about how more and more, Artistic Directors need to realize they must balance audience needs with the financial needs and mission of the organization, and in these economic times, the mission may have to bend a bit.

Frankly, it’s always a balancing act, but if you’re too mission-oriented, you can end up with something like what we’re witnessing at the City Opera, which essentially abandoned any vestige of its old mission (producing staples of the opera repertoire such as “La Boheme” with an occasional venture into more adventurous work) and instead decided on a radically new approach with nothing but daring new operas. But as any arts marketer could have predicted (and many did in conversations when this move was announced), changing the economic engine of your organization in the span of one season is a highly risky move — and sadly the comments I’ve read in The New York Times from the NYCO’s board chair about how they “could have done a better job of marketing”  because ticket sales were lower than expected speaks volumes. As someone in their target market, I think they did a perfectly good job of marketing. Their messaging was all over — online, in print, in direct mail. Trust me, it wasn’t the marketing. I hate how marketing is so often blamed for what it is in fact just bad decision-making.  

A few weeks ago, we published our latest book,
Breaking the Fifth Wall: Rethinking Arts Marketing for the 21st Century and in two recent blog posts (Change Said Another Way and Living in a Time Warp), I’ve echoed our main theme: The world has changed more dramatically in the last ten years than perhaps in the last fifty, and the old rules of arts marketing and audience development don’t apply. Neither do the premises that they rest on. And surviving in this environment requires new approaches.

To this end, more and more organizations are realizing that the decidedly for-profit impulse of filling the house at any cost must be job number one. I’m not suggesting that organizations don’t already think about doing this — but what I am suggesting is that earned income is looking more and more like the newest and best bastion of hope in this economic downturn, and if that’s true, it requires a change of focus and a reallocation of resources.  

When this all works and houses are filled, funders get the message, the audience feels it, board members want to be part of it, and the success fuels itself. I don’t recall ever hearing of an arts organization that regularly sells out its houses going bankrupt. Though earned income only represents 25 to 50 percent of any group’s budget, filling the house has a way of motivating other support.  

The standard marketing techniques of the past — season brochures, telemarketing, ads in the papers — need to be tweaked and revised and integrated with the new. Don’t get me wrong, there’s definitely still a place for all of these things -- but they do need to evolve and become a part of a new holistic view of audience development that is more digital, more social, and moves away from a mass-marketing approach, towards direct marketing instead.

What I talk about in seminars these days is that a great CRM database (that combines all your ticketing, fundraising, and marketing data) coupled with smart and effective e-mail marketing programs, websites, and social media tools will get you quite far along towards these goals. And largely thanks to cloud computing, tools that were formerly only available to the largest organizations are now are affordable for any size institution.  

Look closely at organizations that are thriving today and model them. It seems more the case that when you do, you find smart artistic choices, responsible leadership, and and an emphasis on revenue driven by razor-sharp marketing and a new emphasis on audience development. Those organizations have realized that business as usual isn’t possible any longer and that change is not only necessary, it’s imperative.

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