20121119
Now that I'm growing up...
I've been trying to decide what I want to do now that I'm grown up. It's turned out to be much harder than I thought it would be. It's because I think too much. I actually believed that the arts are important, worthwhile, and needed. I was wrong. What's important is selling, marketing and persuading. You can present anything to anyone, you just have to sell it in the right way. Make it viral, make it social, lead the herd. Like a flock of birds that goes this way and that, landing here, shifting there, compressing and expanding...and some just fly away. I seem to be much more interested in the one's that fly away.
20121014
Customer Strategy Map
The customer value
proposition begins with the specific performing arts programming experience,
which is segmented by the performing arts discipline and its alignment to the
experiential needs of the target audience. The reputation of the performer and
presenter indicate whether or not the event has potential to be a compelling
experience. Once inclined, practical barriers of time, place and cost are
evaluated against alternative activities. The decision to participate is made
in the context of family, friends and others that make up the community of
potential participants and influencers.
20120929
Customer perspective objectives and measures
Customer
Perspective Objectives and Measures
Customer Objectives
|
Performance Metric
|
Market share
Customer retention
Customer satisfaction
Customer profitability
Product/Service Attributes
Customer relationship
Image and reputation
|
Percent of target market/available
funding
Repeat ticket sales, subscription
and grant renewals
Customer satisfaction surveys, focus groups, # of one time ticket buyers Revenue/customer
Net margin/customer
Customer satisfaction surveys, focus
groups, # of one time ticket buyers
Donations per customer,
Volunteer hours
Market place survey |
The other market for arts presenters
In addition to the value proposition for individuals who directly consume the experiences of not-for-profit arts presenters, a separate and important value proposition exists for the institutions that subsidize performing arts presentations. The largest private contributor to the performing arts after individuals donations are foundations, providing 9 percent of presenter revenues. Foundations typically exist to promote a particular constituency or mission providing grants to organizations that are able to serve its purposes. Presenters are also supported by businesses in exchange for advertising or promotion of their image as a good community neighbor. Governments like foundations also make grants to presenting organizations and represent just 2 percent of presenter revenues. It should be noted that local and state governments often subsidized the performing arts through secondary and post secondary institutions, community centers and civic-ally owned performing arts centers. Foundations, businesses and governments are primarily interested in the instrumental benefits and economic activity associated with arts presenting. These benefits are available from other non-presenting activities indicating that costs must be less than or comparable to other alternative activities. Measurements for this customer group include market share of grants and support available, annual renewal of support, new institutional support acquired, and profitability of services provided for support.
20120923
Customer value proposition in the arts
At the center of the customer value proposition is the experience of the performance, of interacting with others, of finding personal and communal meaning. The ideas and concepts shared in the context of the experience, if compelling, create transformation whether participating for the first time or the hundredth time. It is the transformative experience that is the focus of mission driven arts presenters.
The transformative experience is initiated by specific products and services represented by the arts discipline and accompanying traditions and conventions. The experience of a symphony, its formality, and layered conventions represent the attributes that it’s most loyal and supportive patrons must experience to be transformed; to step outside one’s habitual perceptual framework. The reputation and skill of the performer represents a key customer value proposition element. The performer’s ability to connect with audience and share their vision of the world within the context of the art discipline is central to the transformational experience. The transformative experience is also dependent on the time and location of the performance. The physical space and time impacts the perception of the experience as well as the accessibility of the performance. Experiencing jazz late at night in a small club is a much different experience than high school gym in the middle of the day. In addition, practical barriers such as price, location and time must be overcome to participate in an event.
Measuring the performance for achieving the customer value proposition differs depending on the strategy the arts presenter selects to measure. Customer perspective measurements for the disinclined include participation in outreach and educational programming and the number of first time attendees at performances. The effectiveness of broadening participation can be measured through customer satisfactions surveys, repeat purchases, season ticket sales and total market share. The level of overall customer satisfaction is also indicated by the number of one time ticket purchasers, indicating a less than compelling customer value proposition.
Customer perspective measures for those who participate frequently include level of satisfaction with experiences, frequency of participation (including attendance at events and volunteer hours), season subscription renewal rate, and percent making donations. As already alluded to, the frequent participant is a core customer for most arts presenters in several ways. The PARC Finance and Operations Study (Kushner & Pollack, 2004) found that private donations by individuals represent approximately 23 percent of all revenues for arts presenters. The same study also found that an additional 10 percent in donations were the result of individual gifts in kind, special event proceeds, guild and volunteer association giving. Combined with The League of American Theatres and Producers (2003) study indicating that 49 percent of ticket sales were generated by just less than 20 percent of the audience, the frequent attendee is likely responsible for nearly 60 percent of all presenter revenues.
The transformative experience is initiated by specific products and services represented by the arts discipline and accompanying traditions and conventions. The experience of a symphony, its formality, and layered conventions represent the attributes that it’s most loyal and supportive patrons must experience to be transformed; to step outside one’s habitual perceptual framework. The reputation and skill of the performer represents a key customer value proposition element. The performer’s ability to connect with audience and share their vision of the world within the context of the art discipline is central to the transformational experience. The transformative experience is also dependent on the time and location of the performance. The physical space and time impacts the perception of the experience as well as the accessibility of the performance. Experiencing jazz late at night in a small club is a much different experience than high school gym in the middle of the day. In addition, practical barriers such as price, location and time must be overcome to participate in an event.
Measuring the performance for achieving the customer value proposition differs depending on the strategy the arts presenter selects to measure. Customer perspective measurements for the disinclined include participation in outreach and educational programming and the number of first time attendees at performances. The effectiveness of broadening participation can be measured through customer satisfactions surveys, repeat purchases, season ticket sales and total market share. The level of overall customer satisfaction is also indicated by the number of one time ticket purchasers, indicating a less than compelling customer value proposition.
Customer perspective measures for those who participate frequently include level of satisfaction with experiences, frequency of participation (including attendance at events and volunteer hours), season subscription renewal rate, and percent making donations. As already alluded to, the frequent participant is a core customer for most arts presenters in several ways. The PARC Finance and Operations Study (Kushner & Pollack, 2004) found that private donations by individuals represent approximately 23 percent of all revenues for arts presenters. The same study also found that an additional 10 percent in donations were the result of individual gifts in kind, special event proceeds, guild and volunteer association giving. Combined with The League of American Theatres and Producers (2003) study indicating that 49 percent of ticket sales were generated by just less than 20 percent of the audience, the frequent attendee is likely responsible for nearly 60 percent of all presenter revenues.
20120805
Opportunities versus constraints.
I came across a couple of interesting writings that got me thinking further about changing business models for presenting the performing arts. The first is from Venkatesh Rao titled "The Guerilla Guide to Social Business", recapping a series of blogs on the corporate transition to "Enterprise 2.0". The second, "Winning Opportunities" by Raphael Cohen presents a model for successfully implementing projects. Both are filled with thought provoking and useful ideas, well worth the read.
Performing Arts Presenters find themselves in a transitional period, a time of many opportunities and many constraints. And as the recent study "Set In Stone" by the University of Chicago Cultural Policy Center indicates, there is likely to be more than one solution.
It seems to me that we've created a number of constraints that are slowing the transition to whatever tomorrow will bring. What tomorrow will bring will be very different from community to community. For some it will mean innovation and growth, others obsolesce. And obsolesce may be the best and most moral strategy for many. Innovation and change will happen, its just a matter how fast and at what price.
How we make the transition is important to both us and those that will follow. There is value in doing things the way they have always been done. The enjoyment of being lost in a performance without the interruption of spontaneous applause by a few is valuable to many. And to others its a quaint practice of a time gone by, a constraint to attracting new audiences.
As pointed out in "Winning Opportunities" our stakeholders come with many constraints that must be respected if we are to be successful. Many of our performing arts facilities have many stakeholders with conflicting perspectives. I suggest that these conflicting constraints are an opportunity to embrace. The solution is not one organization at the center of the arts universe, but many, each addressing the needs and desires of its constituents.
Many organizations have embedded interests, and change is frankly not in their constituents best interests. There is value in organizations being loyal to their constituents, especially when constituents have been loyal to the organization. And yes, the organization may become smaller and even discontinue operations.
New organizations will emerge and may or may not look similar to the ones we have today. It's clear that these new organizations can only succeed if they know and understand their audiences, and are able to efficiently deliver solutions. As Venkatesh proposes, our organization cultures have evolved from Management by Objective to Management of Opportunities, a function that is much more democratic than current organizational leadership are prepared for. Crowd sourcing and flash mobs may well be the beginnings of the business model of delivering future performing arts experiences.
Decreasing audiences, financial shortfalls and cries for new business models indicate the time for established institutions to take risks is upon us. Established organizations will have to take calculated risks in choosing which constituents they can best serve. And a risk some organization may take is not to change at all, and their constituents will be just fine with that.
What do your constituents want? And which ones can you deliver viable solutions to?
Performing Arts Presenters find themselves in a transitional period, a time of many opportunities and many constraints. And as the recent study "Set In Stone" by the University of Chicago Cultural Policy Center indicates, there is likely to be more than one solution.
It seems to me that we've created a number of constraints that are slowing the transition to whatever tomorrow will bring. What tomorrow will bring will be very different from community to community. For some it will mean innovation and growth, others obsolesce. And obsolesce may be the best and most moral strategy for many. Innovation and change will happen, its just a matter how fast and at what price.
How we make the transition is important to both us and those that will follow. There is value in doing things the way they have always been done. The enjoyment of being lost in a performance without the interruption of spontaneous applause by a few is valuable to many. And to others its a quaint practice of a time gone by, a constraint to attracting new audiences.
As pointed out in "Winning Opportunities" our stakeholders come with many constraints that must be respected if we are to be successful. Many of our performing arts facilities have many stakeholders with conflicting perspectives. I suggest that these conflicting constraints are an opportunity to embrace. The solution is not one organization at the center of the arts universe, but many, each addressing the needs and desires of its constituents.
Many organizations have embedded interests, and change is frankly not in their constituents best interests. There is value in organizations being loyal to their constituents, especially when constituents have been loyal to the organization. And yes, the organization may become smaller and even discontinue operations.
New organizations will emerge and may or may not look similar to the ones we have today. It's clear that these new organizations can only succeed if they know and understand their audiences, and are able to efficiently deliver solutions. As Venkatesh proposes, our organization cultures have evolved from Management by Objective to Management of Opportunities, a function that is much more democratic than current organizational leadership are prepared for. Crowd sourcing and flash mobs may well be the beginnings of the business model of delivering future performing arts experiences.
Decreasing audiences, financial shortfalls and cries for new business models indicate the time for established institutions to take risks is upon us. Established organizations will have to take calculated risks in choosing which constituents they can best serve. And a risk some organization may take is not to change at all, and their constituents will be just fine with that.
What do your constituents want? And which ones can you deliver viable solutions to?
20120729
Becoming lean.
Lean is creating more value for customers by using fewer resources. I think there is a huge opportunity for many arts organizations to create more value for their customers. The tough part for many organizations is the realization that becoming lean means smaller staffs or a responsibility to deliver more services. It also means that everyone in the organization is indispensable, that they must be both committed and competent in both identifying and delivering the programming and supporting services artists and audiences want.
Lean means the ticket representative and and the stagehand need to have just as much input as the development officer and the executive director. Lean may mean they are the same person. Cross functional staff is a key to becoming lean. Cross functional staff fosters understanding and innovation that identifies both the opportunities and constraints for change.
Becoming lean may can also mean outsourcing and creating partnerships. Marketing, stage labor, programming and concessions are often outsourced. Given the variability in frequency of events and their support needs, relying on organizations that service many presenting organizations eliminates excess capacity and waste.
Lean for many organizations can also mean creating volunteer opportunities, building a community of supporters who benefit from their participation through social interaction, learning new skills and being engaged with the presentation. Becoming lean also means innovating, trying new ideas and measuring outcomes.
Programming and presenting the performing arts is performed by a myriad of organizations and institutions both profit and non-profit based. The reasons for presenting the performing arts vary greatly from presenter to presenter. But at its core, the presentation of performing is about engaging audiences and artists with one another, a phase you'll hear often in this blog. The artists and the audience have many different visions of what an engaging experience means. Becoming lean starts with an understanding of which audience and which artists your presenting program is going to serve.
Becoming lean is an ongoing process of thinking critically about your organization's purpose, it's people and its customers. Your comments are always welcome and appreciated!
Lean means the ticket representative and and the stagehand need to have just as much input as the development officer and the executive director. Lean may mean they are the same person. Cross functional staff is a key to becoming lean. Cross functional staff fosters understanding and innovation that identifies both the opportunities and constraints for change.
Becoming lean may can also mean outsourcing and creating partnerships. Marketing, stage labor, programming and concessions are often outsourced. Given the variability in frequency of events and their support needs, relying on organizations that service many presenting organizations eliminates excess capacity and waste.
Lean for many organizations can also mean creating volunteer opportunities, building a community of supporters who benefit from their participation through social interaction, learning new skills and being engaged with the presentation. Becoming lean also means innovating, trying new ideas and measuring outcomes.
Programming and presenting the performing arts is performed by a myriad of organizations and institutions both profit and non-profit based. The reasons for presenting the performing arts vary greatly from presenter to presenter. But at its core, the presentation of performing is about engaging audiences and artists with one another, a phase you'll hear often in this blog. The artists and the audience have many different visions of what an engaging experience means. Becoming lean starts with an understanding of which audience and which artists your presenting program is going to serve.
Becoming lean is an ongoing process of thinking critically about your organization's purpose, it's people and its customers. Your comments are always welcome and appreciated!
Power.
Many organizations use the arts to build community, create economic activity and improve quality of life. What this means depends on the choices of the organizations leaders, their values and their relationships. The performing arts become a tool rather than the focus of the experience.
20120721
New models for the performing arts.
One of the "big" stories in arts presenting this summer has been comments made by Michael Kaiser on "New Models" for presenting the arts. There have been lots of reactions both supportive and critical of Mr. Kaiser's view. The reaction that I identified most with is the blog post of Adam Hutler from Fractured Atlas. We all know the current paradigm of presenting is changing, technology is having a greater influence on how and what we experience. Broadcasts like that of the Metropolitan Opera are given as example of a "brave new world" of arts presenting.
As technology allows us to be more specific about what we experience, it is also making media distribution channels very low cost. Niche experiences in person, are becoming more scarce and more expensive. In the long run, no amount of fundraising will bridge the gap.
Artists need to and will create. But as Hutler indicates, fewer professional artists will be able to make a full time living as the stars of their art form distribute their wares through more and more distribution channels. Like sports, a few will make a very good living, the rest of us just enjoy playing the game.
I do think there is an opportunity for small community (by geography or discipline) arts organizations to grow and prosper in this changing world. The same tools that allow world domination by a few provide great opportunities for those with similar interests to connect and share. The key is building a community around the art (or space) itself, engaging one in another in what is unique to the experience. And most importantly, delivering an authentic realization of that experience.
One solution is to support and promote local and regional artists. Perhaps as more and more national acts simulcast their performance, more dollars can be used to support the presentation of those working in our communities. Think about the impact of the dollars paid to a touring Broadway show staying in the community, circulating numerous times among its participants. And sure, showing best in class simulcast's of performances is likely to be a part of the model. But so will sharing our own local artists with the rest of the world.
As technology allows us to be more specific about what we experience, it is also making media distribution channels very low cost. Niche experiences in person, are becoming more scarce and more expensive. In the long run, no amount of fundraising will bridge the gap.
Artists need to and will create. But as Hutler indicates, fewer professional artists will be able to make a full time living as the stars of their art form distribute their wares through more and more distribution channels. Like sports, a few will make a very good living, the rest of us just enjoy playing the game.
I do think there is an opportunity for small community (by geography or discipline) arts organizations to grow and prosper in this changing world. The same tools that allow world domination by a few provide great opportunities for those with similar interests to connect and share. The key is building a community around the art (or space) itself, engaging one in another in what is unique to the experience. And most importantly, delivering an authentic realization of that experience.
One solution is to support and promote local and regional artists. Perhaps as more and more national acts simulcast their performance, more dollars can be used to support the presentation of those working in our communities. Think about the impact of the dollars paid to a touring Broadway show staying in the community, circulating numerous times among its participants. And sure, showing best in class simulcast's of performances is likely to be a part of the model. But so will sharing our own local artists with the rest of the world.
20120714
Dynamic pricing.
This past 4th of July weekend I had the opportunity to experience dynamic pricing first hand. Dynamic pricing has been used by the travel, hospitality and for profit entertainment industries for sometime. A number of non-profit organizations have recently introduced dynamic pricing and there has been lots of discussion of the pros and cons. Check out the Pricing Institute website for discussion and commentary.
What concerns me about dynamic pricing is that it can easily be perceived as exploiting our audiences, undermining the trust we work so hard to build. Trust and loyalty go hand in hand. And although we can create pricing strategies that reward our best customers, I'm not sure its in our best interest to exploit the opportunity to maximize revenues on last minute buyers for the last few precious seats for a near sold out performance. Yes, the seats will likely sell and in the short term the organization may see increased revenues. Yet a number of potential buyers will balk at paying a higher price, like I did when booking a room in a tourist town in Northern Michigan. The room rate tripled from its already seasonally adjusted rate. I did find a room reasonably priced; where do you think I'll go first next time we head to this popular tourist area?
The hotel that inflated its price for the holiday lost me as a customer not only for that date, but for bookings in the off season when they need my patronage the most. No amount of discount is going to make up for what I perceived as exploitation. Now that dynamic pricing is on my radar in a personal way, I will be much more careful how and when I book travel, rooms and entertainment. I'll be much more distrustful, it will be harder to gain my loyalty, I'll be much more willing to look around for alternatives.
Dynamic pricing should be used to build loyalty and trust, not of just our repeat customers but also those customers who join us for the first time. It may be the only chance we get to show we have their best interest at heart (and we do, right?). Dynamic pricing may be here to stay, but I believe it adds another level of complexity to an already complex relationship. I'm not convinced its anyone's best interest. What do you think?
What concerns me about dynamic pricing is that it can easily be perceived as exploiting our audiences, undermining the trust we work so hard to build. Trust and loyalty go hand in hand. And although we can create pricing strategies that reward our best customers, I'm not sure its in our best interest to exploit the opportunity to maximize revenues on last minute buyers for the last few precious seats for a near sold out performance. Yes, the seats will likely sell and in the short term the organization may see increased revenues. Yet a number of potential buyers will balk at paying a higher price, like I did when booking a room in a tourist town in Northern Michigan. The room rate tripled from its already seasonally adjusted rate. I did find a room reasonably priced; where do you think I'll go first next time we head to this popular tourist area?
The hotel that inflated its price for the holiday lost me as a customer not only for that date, but for bookings in the off season when they need my patronage the most. No amount of discount is going to make up for what I perceived as exploitation. Now that dynamic pricing is on my radar in a personal way, I will be much more careful how and when I book travel, rooms and entertainment. I'll be much more distrustful, it will be harder to gain my loyalty, I'll be much more willing to look around for alternatives.
Dynamic pricing should be used to build loyalty and trust, not of just our repeat customers but also those customers who join us for the first time. It may be the only chance we get to show we have their best interest at heart (and we do, right?). Dynamic pricing may be here to stay, but I believe it adds another level of complexity to an already complex relationship. I'm not convinced its anyone's best interest. What do you think?
20120507
The face of your organization.
"We can fill the house with a country act any time we want."
Wow, great do it.
Wow, great do it.
20120428
Purpose.Vision. Mission.Values.
My purpose is to bring audiences and artists together for meaningful life experiences. My values define what for me, makes a life experience meaningful. And although meaningful life experiences happen every day in many different ways, I'm drawn to the communal experience of live performance. I think part of it is the value of living in the moment, as I believe this moment is all we have. The formalities and rituals of participating in a performing arts event provides an intensified communal life event that explores ideas and relationships in a safe and supportive environment
We each experience the moment as individuals. Being with others influences our perceptions but each experience is unique and as valuable as any other. Perception is not reality, but our perceptions are the only reality we can know in the moment. There is a time to entertain, educate and enlighten as well as challenge and disrupt.. The choices made will differ by purpose, audience, artist, resources and location.
Frugality and altruism are key values for going forward responsibly. Frugality is at the core the concept of lean management, creating the greatest value for least amount of inputs. By consciously working to do more with less, we create the opportunity for altruism. For individuals, organizations and society, there is no other way to sustain our collective lives and provide opportunities for those that follow us.
We each experience the moment as individuals. Being with others influences our perceptions but each experience is unique and as valuable as any other. Perception is not reality, but our perceptions are the only reality we can know in the moment. There is a time to entertain, educate and enlighten as well as challenge and disrupt.. The choices made will differ by purpose, audience, artist, resources and location.
Frugality and altruism are key values for going forward responsibly. Frugality is at the core the concept of lean management, creating the greatest value for least amount of inputs. By consciously working to do more with less, we create the opportunity for altruism. For individuals, organizations and society, there is no other way to sustain our collective lives and provide opportunities for those that follow us.
20120420
"Counting New Beans"
A Wolf/Brown study commissioned by the Theatre Bay Area has been published in a new book called Counting New Beans: Intrinsic Impact and the Value of Art, which I look very much forward to reading. In the meantime I did have a chance to read the Executive Summary which concludes with this diagram:
Similar to the participation model first presented A New Framework for Building Arts Participation, the diagram develops understanding of the relationships between factors.
It would seem that the symbol in red is a critical factor of any presenting programs' success, repeat attendance represents both a leading and lagging indicator of performance. Fortunately, with computerized ticket systems and supporting databases it's an easy metric to track across presenting niches. But as the diagram indicates, there seems to be some question as to what really drives repeat attendance. Its not always the impact of the experience.
The study found that infrequent attendees experience higher levels of impact, but that impact did not necessarily increase their frequency of participation. On the other hand, frequent attendees often experienced lower levels of impact. Familiarity and understanding of the dynamics of a live experience increase with participation, so do expectations.
I think some of the differences in continued participation can be also be contributed to lifestyle. Going to the theatre appeals to ones innate intelligence and social expectations, not unlike frequent participants in the many other leisure activities available. It's what we enjoy when we want a night out. For me, its also the opportunity to experience that special moment when artist and audience connect creating a perfect world. For me it's Nirvana.
It would seem that the symbol in red is a critical factor of any presenting programs' success, repeat attendance represents both a leading and lagging indicator of performance. Fortunately, with computerized ticket systems and supporting databases it's an easy metric to track across presenting niches. But as the diagram indicates, there seems to be some question as to what really drives repeat attendance. Its not always the impact of the experience.
The study found that infrequent attendees experience higher levels of impact, but that impact did not necessarily increase their frequency of participation. On the other hand, frequent attendees often experienced lower levels of impact. Familiarity and understanding of the dynamics of a live experience increase with participation, so do expectations.
I think some of the differences in continued participation can be also be contributed to lifestyle. Going to the theatre appeals to ones innate intelligence and social expectations, not unlike frequent participants in the many other leisure activities available. It's what we enjoy when we want a night out. For me, its also the opportunity to experience that special moment when artist and audience connect creating a perfect world. For me it's Nirvana.
20120409
Richard Dare Article
Richard Dare, CEO and Managing Director of the Brooklyn Philharmonic Orchestra has written an interesting article Paradise Lost - Can We Keep Non Profits from Failing on the Huffington Post. His premise is that the funding model for the arts is broken. His description of the current model as "relentless begging" and a result "one is not really in the art business anymore" resonates from my perspective. I'm looking forward to his thoughts and those of others how to best fund the arts, with the arts as the focus and not the "loss leader."
20120225
Customer service.
Great customer service is key to being a profitable performing arts presenter. If you think about it, customer service is all that we really do, its central to our success. Its a simple concept but what makes it complex is that we have lots of different customers to serve, simultaneously. I use a broad definition of customer to include all the participants it takes to present an artist to an audience these days including: Board members
Donors, Funding agencies, Government, Staff, Sponsors, Agents, Artists, Tenants, Unions, Contracted Services, And finally the Audience
Each of these "customers" come with a different set of expectations and criteria in evaluating their experience. As indicated in last weeks post, net income is the metric that measures the overall performance of the organization and represents the level of satisfaction in the ecosystem that is arts presenting. Unfortunately, its a lagging indicator of performance, it measures what has happened, not where you're headed. Over the next few weeks (and months) we'll explore the expectations of our many customers and how we might deliver the great customer service they want.
I'd like to also use this platform to highlight posts and resources that support the goal of becoming a profitable arts presenter. Here's one on email marketing from TRG Arts that highlights best practices that every arts presenter should incorporate. Direct marketing is still one of the most efficient means of connecting with your audience as messages can be tailored specifically to those most likely to be interested.
Donors, Funding agencies, Government, Staff, Sponsors, Agents, Artists, Tenants, Unions, Contracted Services, And finally the Audience
Each of these "customers" come with a different set of expectations and criteria in evaluating their experience. As indicated in last weeks post, net income is the metric that measures the overall performance of the organization and represents the level of satisfaction in the ecosystem that is arts presenting. Unfortunately, its a lagging indicator of performance, it measures what has happened, not where you're headed. Over the next few weeks (and months) we'll explore the expectations of our many customers and how we might deliver the great customer service they want.
I'd like to also use this platform to highlight posts and resources that support the goal of becoming a profitable arts presenter. Here's one on email marketing from TRG Arts that highlights best practices that every arts presenter should incorporate. Direct marketing is still one of the most efficient means of connecting with your audience as messages can be tailored specifically to those most likely to be interested.
20120128
Net income.
In studying the 990's of non-profit arts organizations, I hoped to identify trends that help clarify why some arts organizations are financially successful and others struggle. And let's face it, financially struggling means no matter what great work you do, you will not be able to sustain operations and fulfill your mission over the long haul (or even if just until the end of the current fiscal year!). And just because your financially successful doesn't necessary means you are doing great work, but it does give you the opportunity to keep working.
Looking at Presenters 990's one thing is becoming clear, many organizations are in deep trouble. Over half of Presenters reviewed are experiencing negative net income, many in the -20% range.
One metric some of these organizations have in common are marketing efficiency ratio's of less than 10 (10 dollars of revenue for every dollar of advertising expense). Financially successful organizations have marketing efficiency ratio's of 20 and above. There are exceptions however. In addition, having a high marketing efficiency is no guarantee of financial success. Several organizations have marketing ratios above 20 and still realize negative net income.
Another trend that emerges is that having a high percentage of earned income is one of the components of positive net income. However, having a high percentage of earned income is no guarantee of success either. Revenue per employee is another metric that seems to correspond to positive net income, but you guessed it, there are significant exceptions.
The profitable not for profit presenter represents a system with many components, including the physical plant, marketing, programming, fundraising, and staff productivity, each driven by the community it serves. How these different components work together varies from organization to organization. Each is unique, but the bottom line is still year in, year out, a good indication of where your organization has been and where it might be going.
Looking at Presenters 990's one thing is becoming clear, many organizations are in deep trouble. Over half of Presenters reviewed are experiencing negative net income, many in the -20% range.
One metric some of these organizations have in common are marketing efficiency ratio's of less than 10 (10 dollars of revenue for every dollar of advertising expense). Financially successful organizations have marketing efficiency ratio's of 20 and above. There are exceptions however. In addition, having a high marketing efficiency is no guarantee of financial success. Several organizations have marketing ratios above 20 and still realize negative net income.
Another trend that emerges is that having a high percentage of earned income is one of the components of positive net income. However, having a high percentage of earned income is no guarantee of success either. Revenue per employee is another metric that seems to correspond to positive net income, but you guessed it, there are significant exceptions.
The profitable not for profit presenter represents a system with many components, including the physical plant, marketing, programming, fundraising, and staff productivity, each driven by the community it serves. How these different components work together varies from organization to organization. Each is unique, but the bottom line is still year in, year out, a good indication of where your organization has been and where it might be going.
Benefits Based Programming
In the study Assessing the Intrinsic Impacts of a Live Performance, Wolf/Brown worked with 14 Major University Presenters and suggest a strategy called "Benefits Based Programming". Quoting from the study: "It suggests that presenters should first decide what impacts they wish to create for their constituents (e.g., spiritual value, social bonding), and then select artists, works of arts and engagement strategies that are most likely to deliver those impacts."
Although it's described as a radical departure for most performing arts presenters, it seems pretty intuitive. As described in the last post, "arts for everyone" is a pretty daunting strategy for most presenters to take on. Choices have to be made in order focus activities to meet the needs and expectations of its participants. It seems only natural to also focus on the impacts audiences are looking for. These too, will be specific from community to community and central to curating a season.
The ongoing research on arts participation and impacts is long overdue, and it puts the focus back on the artists and the audiences arts organizations work to bring together. So much of the marketing and pr in the arts marketplace focuses on the arts organization itself and not on the constituents it serves. It's a complex marketplace with many embedded interests, socially, economically and culturally. One benefit of a tough marketplace is organizations are compelled to assess their purpose and role in the community. For me its about bringing artists and audiences together. What's it about for you?
Although it's described as a radical departure for most performing arts presenters, it seems pretty intuitive. As described in the last post, "arts for everyone" is a pretty daunting strategy for most presenters to take on. Choices have to be made in order focus activities to meet the needs and expectations of its participants. It seems only natural to also focus on the impacts audiences are looking for. These too, will be specific from community to community and central to curating a season.
The ongoing research on arts participation and impacts is long overdue, and it puts the focus back on the artists and the audiences arts organizations work to bring together. So much of the marketing and pr in the arts marketplace focuses on the arts organization itself and not on the constituents it serves. It's a complex marketplace with many embedded interests, socially, economically and culturally. One benefit of a tough marketplace is organizations are compelled to assess their purpose and role in the community. For me its about bringing artists and audiences together. What's it about for you?
20120121
Arts are for everyone...
One of the challenges of being an arts presenter is having the discipline to make choices. As example, I came across a strategic plan for an organization that identifies five primary target audiences for its services and programs: Families with Children, Boomers (age 40-60), Young Professionals, Students K – 12, Seniors and the Disabled.The programming plan identifies theater, dance, music and comedy events, a speaker series as well as a film series. There's also an art gallery, a storytelling festival and classes for children as well as adults. It also serves as a rental facility. Many organizations share this ambitious strategy, that I refer to as "Arts for everyone".
There is value in creating programming that seeks to appeal to everyone. The experience of sharing a communal moment can be very enlightening and meaningful. As arts organizations we want to be relevant to everyone in the community, to share what we so passionately believe in, but as Bill Cosby is quoted - "I don't know the key to success, but the key to failure is trying to please everybody."
The Ticket Buyer Segmentation study by Wolf/Brown model gives an indication how challenging an arts for everyone strategy would be. Using Gardner's Multiple Intelligence's, the study creates a matrix of preferences that segments ticket buyers into 10 ticket buyer preferences. Some segments correlate to performance disciplines while others represent cultural dimensions.
Behind "the arts for everyone" strategy is the need to build community through the arts, but we often forget that the community will be constrained to those interested in the benefits intrinsic to the arts discipline/activity we program. Organizations with arts for everyone strategies often end up reflecting the preferences of the leadership, which of course can vary greatly. The result is often conflict and compromise that diminishes effectiveness.
It's not that you can't serve multiple constituents, but it does mean to do so effectively will require organizational capacity and leadership aligned with the multiple communities to be served. Organizational complexity doesn't eliminate making choices, it just makes choices more difficult to make.
There is value in creating programming that seeks to appeal to everyone. The experience of sharing a communal moment can be very enlightening and meaningful. As arts organizations we want to be relevant to everyone in the community, to share what we so passionately believe in, but as Bill Cosby is quoted - "I don't know the key to success, but the key to failure is trying to please everybody."
The Ticket Buyer Segmentation study by Wolf/Brown model gives an indication how challenging an arts for everyone strategy would be. Using Gardner's Multiple Intelligence's, the study creates a matrix of preferences that segments ticket buyers into 10 ticket buyer preferences. Some segments correlate to performance disciplines while others represent cultural dimensions.
Behind "the arts for everyone" strategy is the need to build community through the arts, but we often forget that the community will be constrained to those interested in the benefits intrinsic to the arts discipline/activity we program. Organizations with arts for everyone strategies often end up reflecting the preferences of the leadership, which of course can vary greatly. The result is often conflict and compromise that diminishes effectiveness.
It's not that you can't serve multiple constituents, but it does mean to do so effectively will require organizational capacity and leadership aligned with the multiple communities to be served. Organizational complexity doesn't eliminate making choices, it just makes choices more difficult to make.
20120103
Diversify, Broaden, Deepen...
The business of performing arts presenting is highly fragmented and competes with a wide range of other leisure activities. Representing just 18% of the leisure market, performing arts presenters must clearly differentiate themselves from other activities by focusing on the unique benefits they are able to deliver with costs in proximity to alternative activities.
As supported by the leisure literature, increased knowledge and familiarity with an activity leads to greater levels of satisfaction and participation. Participation becomes an end unto itself. Attracting and retaining frequent attendance is dependent on experiences that deepen the knowledge and understanding of the art form or the social context which frames the experience. Frequent participants are much more discerning, having gained considerable skill and knowledge in regard to both the experience and the context of the performance. Pre-show lectures, interaction with performers and artistic staff, as well as extended program notes are examples of activities that increase the intensity and complexity of the experience for participants. Within this context, McCarthy and Jinnet (2001) propose three strategies for developing audience participation in the arts; diversification, broadening and deepening.
Diversification seeks to attract participants that do not perceive the arts as beneficial or accessible as a leisure activity. Presenters that wish to diversity their audience need to create an ongoing communication and education program that presents an authentic representation of the experience of participating. The disinclined that share similar values and aspirations with the presenter will come to perceive the arts organization as a potential supplier of leisure activity. Outreach programs go to where the disinclined gather can be an effective way to create a positive gateway experience. An example would include a symphony quartet playing traditional Christmas music at a mall during the holiday season or performing at local churches. Many presenters have created education programs that support school curriculum, providing performing arts experiences that help teach history, social studies and science. These programs not only provide students with a curriculum based art experience, but create bonds between the community and the presenter. These school performances are attended by students and teachers as well as chaperones and teacher aides that may be participating in a performing arts experience for the first time.
In addition to education and outreach programs, presenters also encourage its current patrons to bring along disinclined friends and relatives by offering discounts or other premiums. Many disinclined will attend with a friend or relative out of obligation and find the participation experience more rewarding than anticipated. The value proposition for the disinclined includes products and services that are accessible to their level of arts education. Attendance at a symphony performance can lead to embarrassment if one applauds between movements; whereas a jazz musician is likely to be discouraged if applause does not follow each and every solo. Each arts discipline has its own conventions and levels of complexity that must be learned. Performers and audience alike have talents and skills that are developed with practice. Many presenters have staff dedicated to audience development activities. Having convinced the disinclined to attend, the experience of the performance must be captivating, enjoyable, and provide the intrinsic benefits that add value beyond the time and money costs of attending.
The perception of value is also central to broadening participation among the inclined. As cited earlier, attendees indicate that not having time and the cost of tickets as the significant barriers. Although the inclined value the arts, they are not likely to attend events unless convinced that the experience will be sufficiently compelling to overcome opportunity costs. Broadening participation requires the presenter to continuously improve the reputation and image of organization while simultaneously reducing the practical barriers to participation. Emphasizing the quality of the performance, the benefits of participating while making access more convenient, less expensive and time consuming, will increase the value proposition for the inclined.
A strategy of deepening experiences for frequent and loyal customers involves providing greater insight into the art, its context, the performers and the arts organization itself. Pre and post show lectures, artist meet and greets, season announcement events all draw the participant into the core of programming. Volunteer programs that encourage the customer to become involved in administration, fundraising and operating the organization deepen the relationship as well and provide significant social interactions. For customers that are more internally focused, challenging and innovative performances create a greater depth of experience. Given the market for the performing arts, the characteristics of participants and the strategies for participation, several customer value propositions are suggested for the performing arts presenter.
As supported by the leisure literature, increased knowledge and familiarity with an activity leads to greater levels of satisfaction and participation. Participation becomes an end unto itself. Attracting and retaining frequent attendance is dependent on experiences that deepen the knowledge and understanding of the art form or the social context which frames the experience. Frequent participants are much more discerning, having gained considerable skill and knowledge in regard to both the experience and the context of the performance. Pre-show lectures, interaction with performers and artistic staff, as well as extended program notes are examples of activities that increase the intensity and complexity of the experience for participants. Within this context, McCarthy and Jinnet (2001) propose three strategies for developing audience participation in the arts; diversification, broadening and deepening.
Diversification seeks to attract participants that do not perceive the arts as beneficial or accessible as a leisure activity. Presenters that wish to diversity their audience need to create an ongoing communication and education program that presents an authentic representation of the experience of participating. The disinclined that share similar values and aspirations with the presenter will come to perceive the arts organization as a potential supplier of leisure activity. Outreach programs go to where the disinclined gather can be an effective way to create a positive gateway experience. An example would include a symphony quartet playing traditional Christmas music at a mall during the holiday season or performing at local churches. Many presenters have created education programs that support school curriculum, providing performing arts experiences that help teach history, social studies and science. These programs not only provide students with a curriculum based art experience, but create bonds between the community and the presenter. These school performances are attended by students and teachers as well as chaperones and teacher aides that may be participating in a performing arts experience for the first time.
In addition to education and outreach programs, presenters also encourage its current patrons to bring along disinclined friends and relatives by offering discounts or other premiums. Many disinclined will attend with a friend or relative out of obligation and find the participation experience more rewarding than anticipated. The value proposition for the disinclined includes products and services that are accessible to their level of arts education. Attendance at a symphony performance can lead to embarrassment if one applauds between movements; whereas a jazz musician is likely to be discouraged if applause does not follow each and every solo. Each arts discipline has its own conventions and levels of complexity that must be learned. Performers and audience alike have talents and skills that are developed with practice. Many presenters have staff dedicated to audience development activities. Having convinced the disinclined to attend, the experience of the performance must be captivating, enjoyable, and provide the intrinsic benefits that add value beyond the time and money costs of attending.
The perception of value is also central to broadening participation among the inclined. As cited earlier, attendees indicate that not having time and the cost of tickets as the significant barriers. Although the inclined value the arts, they are not likely to attend events unless convinced that the experience will be sufficiently compelling to overcome opportunity costs. Broadening participation requires the presenter to continuously improve the reputation and image of organization while simultaneously reducing the practical barriers to participation. Emphasizing the quality of the performance, the benefits of participating while making access more convenient, less expensive and time consuming, will increase the value proposition for the inclined.
A strategy of deepening experiences for frequent and loyal customers involves providing greater insight into the art, its context, the performers and the arts organization itself. Pre and post show lectures, artist meet and greets, season announcement events all draw the participant into the core of programming. Volunteer programs that encourage the customer to become involved in administration, fundraising and operating the organization deepen the relationship as well and provide significant social interactions. For customers that are more internally focused, challenging and innovative performances create a greater depth of experience. Given the market for the performing arts, the characteristics of participants and the strategies for participation, several customer value propositions are suggested for the performing arts presenter.
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