Saturday, May 19, 2012

Lost in the Crowd

Direct marketing practitioners know that success is primarily a numbers game. That's not to discount the work that goes into tweaking a control package, testing messages, building list models and analyzing data. However, the foundation of any direct marketing campaign, be it for ticket sales, subscriptions, memberships or donations, is the number of qualified leads in your database.

A few months ago, I wrote a post about how many of us didn't know who are best customers were. Since that time, I have come to realize that many of us don't know who many of our regular customers are.

Performing arts organizations have a distinct advantage over a majority of museums as gathering leads usually stems from capturing information during the ticket buying process, although challenges do exist. Organizations that have a robust group sales business know that it's all about personal relationships as one group contact can bring in hundreds of patrons, and although that's good for revenue, it is a challenge for lead development. For the most part, performing arts organizations have no clue as to who attends as part of a group as they don't gather information for each attendee. And in some cases, private group sales agents don't want to release information as it would require handing over lucrative contacts. And aside from groups, performing arts organizations are becoming more reliant on third party vendors to move unsold inventory, but in doing so, in most cases, they sacrifice the ability to collect contact information. And how many of us track individual people attached to multi-subscription packages? If the leader of the subscription group decides not to renew, we don't have the ability to contact the others.

We estimated a couple of years ago at Arena Stage that at any given time, on average we only had the contact information for roughly 60% of the people in the house. I always wondered what the value of the other 40% was.

Over time, we put into place various mechanisms to assist in collecting more leads. Group leaders were given financial incentives to provide contact information for each individual in their group. We reached out to subscription purchasers and asked them to identify the other people on their account. And we instituted a policy that required complete contact information for all comp tickets, and started ticketing almost every free event.

Now that I've been in the museum world for all of two months now, I've noticed that their challenges are much more significant than those that face performing arts organizations. Some museums have millions of visitors each year, and they only capture contact information for a very small percentage of their visitors. Highly popular free admission museums don't want to institute time consuming procedures to capture information for fear that it would impede timely access to the museum (can you imagine the lines that would form?). On the other hand, most free museums have membership and fundraising circles that rely upon qualified leads. How do you fundraise in a cost effective manner if you don't know who your visitors are? It seems that I am by far not the first to stumble upon the holy grail of marketing challenges that museums face, but given my newness to the field, I was surprised how daunting capturing information could be.

Here are some possible ideas to collect information from those lost in the crowd:

1) Collect information at multiple contact points. Prior to getting to a museum, most people visit a website. Take public transportation. Park their vehicle. Why not identify new visitors to your website and feed them a small roadblock ad asking them to sign-up for information from your museum, including future discount offers and exclusive content. Could you station "visitor concierges" outside subway stations who offer tips on exhibits and museums, and collect information during the process? Could you partner with your parking lot to develop a way to capture visitor data?

2) Offer exclusive content. Exhibits are becoming more and more interactive every day. With more than 100 million smart phone users in the United States, could exhibits feature exclusive interactive content using QR codes that also captures data in the process? As museums build out content online, what if you placed some exclusive content behind a free "pay wall" that requires registration to access? or what if an exhibit offered to send you a free memento of your experience via email?

3) Ticket events. Many museums offer a large variety of free and popular educational programming and docent lead tours. Even though they are free, why not require a ticket or an RSVP? Visitors can register well in advance, or they can do so quickly on site at ticket kiosks.

I am sure these suggestions only offer a way to make a small dent in the overall problem, but the challenge is clear -- finding easy, affordable and efficient ways for visitors to self identify themselves as wanting more information from musuems is of utmost importance to our direct marketing strategies.

Sunday, May 06, 2012

Planning a Turnaround

Deficit budgets have started to accumulate. Core audiences have began to slip away as smaller and smaller houses become the norm. And there is a palpable sense that a once formidable company has lost its way as a growing group of stakeholders from donors to press start asking what happened?

Almost certainly, the marketing department is pointing its finger at the artistic staff laying the blame for the downturn solely at their doorstep, while the artistic staff believes that if they only had better marketing, the issue would disappear. Reality is that if a company is experiencing a significant decline, usually there are issues in both areas that need to be resolved.

At some point, the financial position of the company becomes untenable, and a turnaround team is brought in, usually in the form of a new artistic director, but sometimes a new executive director and marketing director as well. If executed well, strategic shifts in programming along with a well thought out rebranding and promotional campaign can lead to exceptional results. But a turnaround is only as good as its implementation.

Some things to consider when planning a turnaround... 

Identify Toxic Assets. The new guy hired to design and implement the turnaround knows one thing--what the company has been doing isn't working, and that the board desperately wants a change and they want it quickly. It can become overwhelmingly tempting to cut old programs immediately, and start from a completely fresh slate. However often times even the most struggling company has positives in which to start building from. Cutting everything quickly in an effort to rebuild from a new baseline can eliminate valuable assets. In for-profit turnarounds, the idea is to separate toxic assets from the others in an effort to give a new leader at least some base to work from. Throwing the baby out with the bathwater may be quick and it might provide an immediate signal that there is a new sheriff in town, but it usually isn't the most efficacious strategy. Instead of a hatchet, bring out the scalpel. Make precision cuts in an effort to save what can be used to help regenerate a new future.

Develop a Bridge for Audiences. When considering radical programming changes, make sure to design and implement a bridge for your current audiences. In a turnaround, the new is always given priority over the well established, but loyalty is something that takes years to cultivate, and I'd rather reinvent from a partial base than none at all. This is not to say that one should shy away from making needed programming changes, it is only to say that as much thought needs to go into how to introduce them into the market as went into designing the programs themselves. I've seen companies attempt to reinvent themselves overnight with little thought to patron migration, and as a result, they lost a majority of the base they had cultivated over prior decades. Major donors can provide venture capital to introduce new programming if engaged well, and audiences can be successfully transitioned into new programming if done so in a gradual and considerate manner. I know because I've done it on multiple occasions.

Market Research Doesn't Have to Influence Programming to be Helpful. When asked about market research, Steve Jobs famously told Business Week that he doesn't conduct market research because "a lot of times, people don’t know what they want until you show it to them.”  Similarly, Julie Taymor in an interview with The New York Times said she didn't believe in focus groups stating that "if focus groups had been used on The Lion King there would be no death of Mufasa because groups would have reacted negatively." Given that The Lion King is Broadway's top earner of all time, and at the time of Mr. Jobs' death Apple was the most valuable company in the world, there is wisdom in these remarks. However, I bet the marketing people working with Ms. Taymor and Mr. Jobs would have loved market research, not because they wanted it to influence product development, but it would have informed them on how to message the introduction of the product into the market. Even though in many cases "the new" is absolutely necessary and people may desire it without knowing, marketers have to break through an initial resistance barrier. 

Artistic Planning is Where it all Starts. I attempted to rebrand a company once without a clearly articulated artistic strategy. We were told that exciting new programs were going to be introduced to replace well worn ones, but when pressed, there were very few details. Feeling that we couldn't wait any longer, I started the first phase of the rebranding process thinking that the details could come later. Boy was I wrong. Two months later, everything came to a screeching halt when we were trying to develop a communications matrix around an amorphous programming change. We couldn't message what didn't exist. Luckily for everyone, the artistic team came to the same realization, and within a short amount of time, a brilliant new artistic strategy was developed, and we were back on the fast track. I learned an important lesson that day--for a complete turnaround to be successful, it all starts with a detailed new artistic strategy.

Cultivating New Audiences is an Expensive Proposition (at first). Marketers know that retention is cheap, and acquisition is expensive. We also know that both are absolutely critical. When introducing new programming, it is important to know that acquiring audiences for newly developed programs will require a dedicated effort over an extended amount of time as well as considerable resources. The "build it and they will come" assumption is flawed. Audience development is a process, and in the short term, often times it will result in a negative impact to the bottom line. New programming and audience development are investments in the future of the organization. That said, depending on the severity of an organization's finances, the necessary resources for such an investment may not be readily available, which can lead to the premature cancellation of new programs. If that occurs, it is a waste of time and resources.

In his book The Art of the Turnaround, Michael Kaiser discusses his classic mantra "good art, marketed well" as a centerpiece for a successful turnaround. I agree with Mr. Kaiser that often times turnarounds require adjustments to programming or marketing, and in some cases, both. But over time, it has become an alarming trend to see an increase in the number of failing organizations that do both relatively well. I've started to wonder, as many others have, if mature organizations are failing because their business models haven't fundamentally adjusted to the rapidly changing external environment in the past fifty years.  In moments like these, I'm reminded of a quote from Buckminster Fuller, who said "you never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete.” I'm fearful that training institutions are teaching models that are dying a slow death, and that major institutions continue to look to senior managers entrenched in failing systems for the cure. I believe that co-management hybrids pairing the wisdom and experience of more senior leaders with the inventiveness and curiosity of Gen X'ers and Millenials could be the best bet. But one thing is for sure--rearranging the chairs on the deck of the Titanic won't save the ship. For that, you have to find the fundamental cause of the problem. It could be programming. It could be marketing. It could be both. Or, it just might be that we are clinging on to a business model that is rapidly failing us.