NPAC: Growing Ticket Revenues in an Economic Downturn



Speakers: Rick Lester, chief executive officer, TRG/Target Resource Group; Jill Robinson, president, TRG/Target Resource Group

Notes:

-A recession is defined by a decline in Gross Domestic Product for two quarters in a row. GDP = Consumer Spending + Investments + Government Spending + (exports - imports). The first quarter of 2008 showed a tiny increase in GDP. Although it might feel like a recession, technically it isn't (perception vs. reality). The problem with the definition of a recession is that you will know you are in a recession two quarters after you have been in it. Since 1980, the United States has gone through 4 recessions, but they have been short and shallow.

-The primary impact of a recession is not on box office, but on fundraising. People tend to give when they are optimistic, but in tough times, people still seem to go out--people still need an escape. The only exception to this is cultural tourism. Cultural tourism seems to be affected much more than regular box office.

-In a recession, marketers have a smaller margin of error and they are called into question more. There is a temptation to increase sales goals based on the drop in contributed revenue but just because contributed revenue drops, the demand for your product doesn't increase in response.

Strategies:
1. Go back to the basics by focusing on cost-of-sale ratios, database analytics, and investing at the maximum level possible. The quality of the product is of ultimate importance in all of these factors. Cost-of-sale ratios should be ran for entire seasons as well as individual productions.
2. Over spend on marketing performances with the greatest expected outcomes because they will probably generate the best return on investment.
3. When tracking response reports from your subscription campaign, continue to mail to "over-producing" segments and continue to mail to those "over-producing" segments until they cease to "over-produce." On average, 85% of all subscription sales come from patrons with previous single ticket purchasing history. These prospects are 8 times more valuable than anyone else. Poorest responses generally come from rented lists.
4. Find a way to create new multi-ticket buyers because they are your best prospects for subscriptions. Most single ticket buyers go once and never return--you must find a way to get them back in the door.
5. When looking for the best prospects for subscription campaigns, you need to examine three factors: Recency, Frequency and Monetary. The more recent, the better. The more they attend, the better. And the more money they spend with the organization in a year, the better.
6. If your budgets are cut, take the money out of your marketing for your least popular shows and put them into your most popular shows. The least popular shows will still remain unpopular. If you double your sales on unpopular shows, who cares--it will gain you a minor amount of additional income. If you increase your big budget shows by 10%, it could be a substantial amount of additional revenue.
7. Plan artistic risks at the end of the season when your subscriber renewals are done, and your blockbuster when the subscription renewals start so that subscribers feel that seats are in demand and their subscriptions are valuable when they are asked to renew.

-The biggest client mistake that TRG sees regularly is overspending on print advertising (50% of the budget or higher). Reallocate your existing budget so you spend less on print advertising, and put more resources toward direct mail, e-mail and broadcast.

You can download the entire presentation below:



Comments

Post a Comment

Popular posts from this blog

Thinking about creating a blog (Part 2)...

If you are thinking about creating a blog for your organization, there is one thing I cannot stress enough: make sure those who will be contributing content have bought into your idea! I have created a couple of blogs for different organizations, and I must say that I have learned this the hard way. Don't get me wrong. I think that blogging is very effective if done right, but that is a really big IF. Many organizations launch blogs and don't do it right, and when the blog fails they blame it on the ineffectiveness of the technology. Readers of a blog don't want to get hit with your marketing messages! If you try a hard sell technique with every blog, of course your readers are going to start tuning out your blog. You need to offer your readers a reason to read your blog, and a way to do that is to offer exclusive content that they can't get anywhere else. This is the reason that while at Virginia Stage Company, I started to post video clips of rehearsal and "behin...
Read more

Marketing Awareness.

Modern marketers tend to get very excited by ideas of conversation and engagement with customers. Given that they are aware how many images and messages each of us receive every day, they have become less impressed by the more basic aim of generating awareness. This, I think, is why this pun-based campaign has received such criticism from within the advertising world. Some complain that the imitation of Morgan Freeman is a deceitful hijacking of the actor's gravitas while others just deem it trite, shouty advertising disguised as something else. But that is to overlook context. It's an ad for insurance. Insurance stubbornly remains a commodity business where price trumps service because we buy it before we need it. The engagement with the product/service occurs at a time of distress and not at a time of purchase. In a commodity business, awareness is key. You want your customer to have your name come to mind when they consider the purchase. It's brutally simple. A differen...
Read more

Thinking Inside The Box.

Image
A combination self-help and business book, Michael Port's Beyond Booked Solid focusses on scalability issues and how to expand a small enterprise. It is filled with pragmatic tools and techniques designed to grow a business via innovation and leveraged income, but the key message is that of developing a mind-set that works on your rather than in your business. To some extent that's just a reframing of the old adage of keeping one's eye on the big picture, but it's something that can't be repeated too often. Constantly reminding yourself and your colleagues of why you're in business (and specifically what customer needs you meet by doing something better than anyone else) is crucial to evaluating everything that you do day to day. If your marketing tactic du jour, your latest product development or your inter-departmental meeting isn't centred on that, they're not worth your time and resources.
Read more