By Jim McCarthy Jul 28, 2010 0 comments

How Gates Helped Us Build a Multi-Million Dollar Ticket Selling Business, Part 1

Goldstar was started in 2002 by me, Robert Graff, and Rich Webster.  The company is 100% founder, family and employee owned, and despite selling tens of millions of dollars worth of tickets each year, has needed very little money to get there.  We’ve grown consistently over our eight year history at a 50 to 100% annual rate and we’ve delivered millions of new customers to venues everywhere, including millions of dollars in revenue generated on behalf of non-profit organizations who are our partners.

Sometimes people ask me how we were able to do this with no venture capital, no installed base of customers and, at the beginning, precisely zero relationships in the venue world.  My answer is that we have been focused from the very beginning on a single thing:  how do we get people out more?  From the start, it became obvious to us that growing the audience for live entertainment was the key strategic question, and that’s what we set out to answer.

Our take on this is different from that of a venue or production company because rather than developing audience for a specific  show or venue, we think about the challenge of audience development from an industry-level point of view.

We think of it as the challenge of getting people to choose live entertainment more often.  In essence, our concept is that we’re taking share away from TV watching, movie watching, goofing around on Facebook, sitting at home staring at the floor and other really, really worthwhile activities.  As far as I’m concerned, just about any kind of live entertainment is a major upgrade on any of that stuff, and people do a lot of it. You can’t really “grow the pie” of how much time people have, but you can certainly grow the pie of how much they spend not wasting their lives on things they don’t really enjoy and don’t really do them any good, and that’s where we focus.

But to be more specific, we figure there are six gates we need to get a person through in order to make this happen.

First, we try in various ways to get them to think about this question:  do you wish you went out to live entertainment (however you want to define that) more often than you do?  In my experience, and I’ve done this many times in all kinds of groups, about 90% of people raise their hands.  Try it for yourself and see if you don’t get the same result.  (One warning:  if you try this with a group of people in the live entertainment industry, they might throw something at you.  But other than them, almost any group will work.)

And that’s the founding marketing insight of Goldstar:  people want to go out more.  The next obvious conclusion is that if their behavior is different from their desire, there must be something (or some things) getting in the way.  Those are the other five gates.

So, Gate 1 is making people realize they want to go out more than they do.  Help them uncover the ‘latent interest’ in musicals, sports, comedy, and all the great stuff the live entertainment world has to offer.  It helps to contrast the excitement and fun of going out with their normal night at home or the crushing dullness of most trips out to see a movie.  This is a concept that most consumers immediately get.

But just like smokers all know they’d like to quit, it’s not enough.

Gate 2 is making people aware of specific events. The problem is that all events are not created equal, and every potential customer is different.  If we waste our bullets telling somebody about an event that’s not right for them, we’re really setting back our cause.  For Goldstar, it means that we use a range of technologies and promotional techniques to try to put the right event in front of the right member.  For example, we sent more than a million email newsletters on Tuesdays, and each one is completely different.  The differences are driven by what’s known as a collaborative filter, like you see at Amazon when it predicts what book you might be interested in.  That way, even if we send a member an email with 100 events in it, the ones she is most likely to be interested in will rise to the top, automatically.

But just knowing about something isn’t enough.  Everyone knows about K Mart, but when was the last time you bought something there?  (No offense, K Mart shoppers.)  Gate 3 is getting somebody interested in an event.  The biggest problem with a lot of promotions for live entertainment is that it’s not oriented to getting people interested in an event.  Instead, it’s geared toward telling people about what the event is.  One classic example of this is saying something is a “West Coast Premiere” of a certain play.  I mean, really, we can be honest with each other here.  Who cares?  This is not moving one nanometer in the direction of getting somebody interested in the show.  Jim Royce of Center Theatre Group in LA was raving to me about the production of “The Lieutenant of Inishmore” that he’s got in one of his buildings, and the clincher was when he told me that the ending is a huge, unpredictable surprise.  There are a million ways of getting somebody interested in an event, but insider-y descriptions or empty phrases aren’t them.  “A recently discovered play by Chekhov, Boredom is the story of a man confronted by a choice between two different ways of life.  Which one will leave behind and which one will he embrace?”  I just made that up but it sounds a lot like things I’ve heard and read, and it contains almost nothing that would actually build interest.  At Goldstar, we work hard to avoid this by writing in a style that we think of as being person to person, as though we were describing an event to a friend.  The first priority in this process is finding two or three excellent reasons for a person to want to go and then trying to bring it out in everything we say about it.

Later this week, I’ll take you through gates 4 through 6.  UPDATE:  Here’s the link to part 2.

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