By Jim McCarthy Jun 18, 2010 2 comments

The War of Attrition

Via Thomas Cott, I came across this terrific piece from Rick Lester this morning.  Here’s the key tidbit:

Despite the eternal instinct to lay the arts community problem on a lack of “new audiences,” this is simply not the case. The number of new people entering the arts ecosystem each year is enormous. During our five year study period, nearly two-thirds of all households in the combined database (63%, or slightly more than 3 million of the 5 million households) were first time buyers. This fact endorses TRG’s oft expressed slogan in conference speeches and presentations: arts organizations must stop over-prospecting and under-retaining patrons – especially new patrons.”

What’s great about Rick’s work is that he’s not doctrinaire.  He understands that a smart marketer says “In God We Trust; All Others Must Use Data.”  And in this case, his numbers are pretty compelling:  68-73% of people who come to arts venues once don’t come back.  The implication of that, of course, is that the time and energy that goes into getting new people through the doors is 68 to 73% wasted, which is painful to contemplate.

As Rick says, those are the facts.  I have a few things to add in the way of analysis and comment.

First, as long as we’re talking numbers, there’s a phrase I repeat as a mantra to the marketers that work for me.  When people start talking about numbers being good, bad, acceptable, unacceptable or whatever, I ask “compared to what?”

A number out of context means very little.  If you told somebody who knew nothing about baseball that a player only got a hit 3 times out of every 10 he went to bat, that person might well think that was pretty low.  Of course, even a casual baseball fan knows that .300 is actually a pretty good batting average compared to other players in the game and the difficulty of the task.  Sure, intuitively 68% sounds lousy, and it probably is, but compared to what?

Let’s take as a given that organizations couldn’t possibly retain everyone (that would be 0%).  In fact, there’s absolutely nothing in my experience with large groups of buyers that suggests repeat buyers should be the majority though that could be true for some groups.  For me, that means that 50% could turn out to be a reasonable number for attrition.  68 to 73% is much higher than 50%, but at least  it feels like a workable goal.  I wonder if Rick has some benchmarks he can share in this area that would help people establish good goals in this area. Naturally, I’d love to publish them here.

Second, I’m not convinced this is a marketing problem.  Well, at least not in the sense it’s typically meant.  Rick suggests, wisely, that organizations could be over-committing resources to new audience, and I’m suggesting they could be under-wowing them when they get there.  I’ve been talking for years about the fact that content simply must get better.  A solid B+ performance of something totally in the audience’s comfort zone is a great way to get 73% attrition.  In a way, a B+ is hardly better than an F.  In the words of South Park’s Eric Cartman “Boooorrrring!”

It is a marketing problem in the sense that the content and the overall experience must be designed to delight a patron, not for the convenience of the people creating the programming.  I agree with the proposition that you shouldn’t waste your money or time prospecting for new customers when you’re not prepared to serve up an excellent experience.  There’s an old advertising maxim that says “Good advertising kills a bad product faster.”  I work with a lot of shows and read thousands of pieces of user feedback, and this is very real.

Third, not to be unkind, but I don’t really see venues doing an awful lot to “prospect” other than just buying advertising.  I’m sorry, but I don’t.  I think efforts in this area are anemic when it comes to actual innovation or even just good old fashioned hustle.  Obviously, that’s a generalization to which there are many, many exceptions, but the hard work of finding and connecting with your organization’s true potential supporters is something that’s done a lot less than it could be.  Much less often, for example, than making sure street banners adorn the neighborhoods where board members live, throwing money blindly at ads that haven’t worked in years or making what is often times a half-hearted and uninspired foray into social media.

Paid advertising works in the sense that if you do it big enough, people come, but it also tends to produce a less valuable and loyal customer than customer acquisition done through more organic means.  But that’s much harder and takes more time to show results.

Finally, let me just say that Rick’s idea that organizations should spend more time retaining existing customers is right on the money.  What I hear instead from venues more often than I’d like is that they don’t have time to do that, especially when trying to retain the customers that Goldstar, for example, has just sent them by the dozens or even hundreds.  Anybody who thinks they don’t have time to figure out how to retain a new customer who just walked through their doors should listen to what Rick is saying and figure out how to make time.

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    2 Comments

    • Daniel (Cahwyguy)

      I just want to say that I’ve been finding your posts interesting. As I was writing my latest update on how the Pasadena Playhouse is destroying their subscriber base (http://cahwyguy.livejournal.com/1026054.html; you can see the whole series at http://cahwyguy.livejournal.com/tag/pasadena-playhouse), I was thinking about discounts. We were subscribers at Pasadena, but I think we’ll go to single-tickets via Goldstar. REP East was able to convert us from regular Goldstar buyers to subscribers; Colony Theatre did the same thing. But Center Theatre Group has gone the other way: Why subscribe at very high prices when I can reliably get Hottix? I’d go for a Hottix subscription in a minute.

      What makes someone convert from a discount buyer to a regular patron. Product is part of it, but that product cannot be overpriced. Subscriptions must provide discernable benefit, especially if there is a significant premium in cost or the risk of not getting tickets over discount purchases (points to Colony here, which has a good subscription price and payment plan). Seat quality may not be enough, esp. in smaller venues. Attitude is a lot – if a venue becomes like family, I’m more likely to subscribe (points to the REP there).

      I’d like to see a future post of your opining on this: how to convert the discount buyer into a subscriber, and the proper way to care and recognize subscribers.

    • Jim McCarthy

      My feeling on subscribers is that in order for them to be successful, the venue must GET and GIVE more to the patron. Sure, part of it is seats, but that can’t be all of it.

      I think it’s about access, insight, and familiarity. Subscribers should feel like they’re walking in Cheers when they get to the venue they’ve subscribed to.

      Thanks for the suggestion on a post about converting Goldstar buyers to subscribers. Let me noodle on that.