Tuesday, September 30, 2008

Hoping to see you in Houston...

The National Arts Marketing Project Conference is a little more than a month away, and I am starting to feel like a child just before Christmas! It is the only time during the entire year that I get to see my colleagues from around the nation, and learn about what everyone else is doing. The markets are changing daily. Buying habits are shifting radically. And who knows what is on the horizon. This conference couldn't come at a better time!

This year I am honored to be participating in the following panels and/or presentations:

When I am not speaking, you will be able to find me at the following presentations:

And even though I have admitted my man crush on Alan Brown, I must say that I can't wait for the plenary luncheon on Monday with Karen Brooks Hopkins, the President of BAM. I have heard from colleagues who have worked with her that she is an amazing manager and an astute fundraiser.

So if you are looking for some interesting ideas on how to navigate the current economic crisis, or just need a good kick in the butt to get reenergized, register today! Don't confuse the National Arts Marketing Project Conference with the other one with a similar name--it might sound the same, but ask previous attendees and they will tell you it isn't by a long shot.

Friday, September 26, 2008

Navigating the economic turmoil...

If you are like me, by now you have been asked by your executive leadership and your board how you plan to address the failing economy. I would like to share some thoughts with you below. Some of these items are my ideas. Some are not. Some will be welcomed and popular, while others might be politically difficult to implement. But I found all the below strategies to be helpful.

1. Monitor your return on investment for all your advertising spends. If you have multiple productions running concurrently, and one production is showing a substantially higher ROI on your advertising dollar, then reduce your advertising spends on the lower performing production, and place those funds to promote the production showing a higher ROI. In doing so, make sure that you don't cut funds to the extent that the lower performing production is completely unadvertised--you still have a responsibility to that production and to those audiences. But place more eggs in the basket that is performing better. This strategy will ensure that you are maximizing the returns on each advertising dollar you spend, however it can become politically dangerous and could cause internal strife with your artistic team.

2. Stretch each dollar. Don't be afraid to negotiate with your vendors. This isn't a time to be shy. You have a responsibility to your organization and your employees. Get tough. Ask the tough questions. Demand more. Make your advertising representative work for you. Most likely there isn't an advertising medium that has cornered your market. In the past, newspapers might have been in that position, but with falling readership, this is probably no longer the case. In my market, for decades the Washington Post controlled the market. Organizations in the Washington DC metro area had to advertise with the Washington Post, and they controlled the relationship. No longer. Get the major players together, and tell them that you will sign major advertising contracts with those companies that play the nicest with you. Ask for free advertising. Ask for free promotion. Ask for freebies up to 50% of the value of your advertising contract. Don't accept anything less. You are the protector of your organization. Would you rather face a situation where you must cut expenses because you didn't hit your goals because you were too shy to ask for concessions or toughen up with your vendors and negotiate a deal?

3. Become more efficient. This economic downturn will have a silver lining. It forces us to examine everything that we are doing to find the inefficiencies in our marketing strategies. Be ferocious about monitoring every direct mail campaign. What segments are working? What segments aren't. Analyze your database for trends, and pay attention to the data. Eliminate mailings that aren't performing. Case in point: Arena Stage mails a package to every single ticket buyer that comes to its first couple of productions. If you are a first time single ticket buyer, you will get a letter from our Artistic Director thanking you for coming and a special incentive to return for another show (because we know most new subscribers were multiple ticket buyers in the previous season). We have a wildly successful show playing at Arena Stage at the moment which is attracting many more tourists than we normally get (in fact, we usually attract very few tourists). So I was proud the other day when our Director of Marketing came to me and asked if we should spend the money on creating and mailing these tailored packages to the first time single ticket buyers from more than 200 miles away from Washington DC. Of course not. These ticket buyers are interested in this one show because of the celebrity draw, not in attending Arena Stage on a regular basis. So we saved that money and put it toward other things. Way to go Shawn!

4. Be wise on what to cut in your expenses and what to keep. Never cut anything that sacrifices the quality of your product. That is never the answer. If your product lessens, you will have nothing to market. If you need to reduce your expenses, cut those expenses that aren't essential to the product, the experience or to the promotion of a production. So you might be thinking what do I cut then? Look at travel, software & hardware expenses, office supplies/furniture, research and development, and other niceties that might not be absolutely essential to the current fiscal year. If you want to be a friend to your executive director, don't spend the extraneous funds in your budget. Put those funds into an escrow account for use if you don't need to cut them later in the year. If you need to cut expenses later in the year because you missed your targets due to a fluctuating market, you will have those funds to cut. Remember that as a department head, you have more responsibility to the overall health of the organization than you do to a specific division or department. Don't bury funds in your budget, and be open and honest about what you can and cannot cut.

5. Always be on the lookout for new revenue sources. Just like diversifying your portfolio protects you from major losses in any one specific investment, diversifying your revenue sources does the same thing. Take a look at your merchandising, concessions, parking, sponsorships, advertising opportunities, partnership opportunities, space rentals, summer camps, education programs, etc. They are all important even if they are smaller sources of revenue. Diversify as much as possible.

6. Lock in those sales today! We have significantly increased our investment in group sales at Arena Stage this year. The best way to guarantee that your sales don't ride up and down with the market is to lock them in early (this is also the best way to protect your sales from bad reviews). Announce your season as early as possible, and put as much importance on developing your group sales brochure as your do on your subscription brochure. Group sales departments need time to sell your shows. Give them as much time as possible and the resources to sell. Invest in group sales. And a lesson I am learning currently--make sure the deposit that you require from your groups at booking is large enough to weed out the people who aren't serious in bringing a group, but small enough not to scare people away. We are working on this at Arena Stage.

Sunday, September 07, 2008

Remember the entire experience

Recently Arena Stage held a couple of focus groups about membership programs at Shugoll Research in Bethesda, MD. While I was there trying to figure out whether or not a membership program could supplement our subscription options, I learned another lesson entirely.

Our first group was with recent lapsed subscribers, and we asked them why they decided not to renew their subscription. We got several answers that we anticipated--our move to temporary venues while our new building is being built, the selection of shows, not enough time, don't want to commit, etc. And I got some answers that I completely wasn't expecting:
--"I love the productions, but I was having a tough time getting a cab after the performance, even though I asked house management prior to the show. I don't want to stand around for a half hour waiting on one."
--"I understand your move to Crystal City, but do you really have to charge $5 for a cup of coffee at concessions."
--"Parking is going to be difficult at the Lincoln Theatre. I know you have valet parking, but at such a large venue, it is going to take forever to get our vehicle."

These issues had nothing to do with the product, the sales vehicles, the messaging, or anything else that a marketer normally thinks about. They have to do with the entire experience. Reflecting on these comments, I have made it my number one commitment that we will provide the best overall experience of any theater in the metro area. To do this, we have changed the way we do business, and are looking for more opportunities everyday.

We now:
1. Offer free coffee and cookies at every performance, and for every patron. Our customer service mission includes positioning ourself as "warm and friendly." What is more warm and friendly then free coffee and cookies.
2. We are working with our valet company to get the timing of every vehicle return down to 10 minutes, which is quite an accomplishment in DC on a Friday evening. We are using shuttles to shuttle valet drivers back and forth so they don't have to run to vehicles, and therefore don't get fatigued or winded. I literally have stood at the front of the theater with our Director of Audience Services and have timed the delivery of cars. We still have a little way to go, but are making headway.
3. We now require our ushers to wear black and white, and have brand new name badges. They are trained to welcome each guest at the door, route them to the free cookie and coffee bar, and then thank them when they leave. We actively seek ways in which we can go out of our way to help people (i.e. loaning an arm to an elderly patron to assist in getting out of a vehicle, walking people to a nearby restaurant, etc.)
4. We have opened our house to both food and drink. I initially thought this was going to be a disaster and we would have to increase our cleaning staff, but our audiences are very respectful of the space and there haven't been any issues. And our patrons love taking food and drink into the space.
5. We started a Money Back Guarantee for our subscribers. If they don't like the first show, we will refund their subscription. This puts the pressure on us to solve every problem they have, and to provide the best service.
6. I moved a significant amount of funds into a "customer service" allocation. If we make a mistake, or it is perceived that we made a mistake, not only will we fix it, but we will make sure our customers leave happy. If this means buying them drinks, giving them a restaurant gift certificate, a free CD, or something else, we have funds for this purpose.

These are just a couple of things off the top of my head. I am very lucky in that I have a Director of Audience Services who is phenomenal, and is just as committed to this as I am. If you have any great ideas, please share...