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.

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.