2013 WASHINGTON NONPROFIT CONFERENCE
THE FUTURE
IS NOW
STRATEGIES & TECHNIQUES FOR INTEGRATED PROGRAMS
Changing the Season
of Churn, Churn, Churn
Eric Nelson, DCM
Russell Jones, New York Philharmonic
Danielle St. Germain-Gordon, Arena Stage
2013 WASHINGTON NONPROFIT CONFERENCE
Churn Trends in Performing Arts
 Topic Overview - Eric
 Symphony Perspective - Russell
 Arena Stage – Danielle
 Panel Discussion
 Open Floor Q&A
THE FUTURE IS NOW
STRATEGIES & TECHNIQUES FOR INTEGRATED PROGRAMS
2013 WASHINGTON NONPROFIT CONFERENCE
THE FUTURE IS NOW
STRATEGIES & TECHNIQUES FOR INTEGRATED PROGRAMS
2013 WASHINGTON NONPROFIT CONFERENCE
When a nonprofit acquires a new
donor and then fails to secure a
long-term relationship
with any true financial gain.
Fundraising Success
THE FUTURE IS NOW
STRATEGIES & TECHNIQUES FOR INTEGRATED PROGRAMS
2013 WASHINGTON NONPROFIT CONFERENCE
Increased Competition, Decreased Retention
•
Competition for entertainment dollars continues to
increase and population growth is no longer enough to
counter declining arts and culture participation rates.
The NEA
•
Arts & Culture have worked to understand churn trends
•
•
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57% of 2006-07 orchestra buyers were new
55% did not return the next year
2/3 new patrons in 2008 did not return within the next 12 months to
cultural institutions in Philadelphia
THE FUTURE IS NOW
STRATEGIES & TECHNIQUES FOR INTEGRATED PROGRAMS
2013 WASHINGTON NONPROFIT CONFERENCE
Churn, Its Human Nature
•
Retail Banking - 15%
•
Cable and Satellite companies - 20-30%
•
Mobile phone providers - 15-30%
THE FUTURE IS NOW
STRATEGIES & TECHNIQUES FOR INTEGRATED PROGRAMS
2013 WASHINGTON NONPROFIT CONFERENCE
Increased Loyalty Can Be Achieved
•
Only 12%-15% of customers are loyal to a single retailer.
That small group generates between 55%-70% of sales.
65%-95% of these sales come from members of loyalty
programs.
Center for Retail Management
THE FUTURE IS NOW
STRATEGIES & TECHNIQUES FOR INTEGRATED PROGRAMS
2013 WASHINGTON NONPROFIT CONFERENCE
Increased Loyalty Can Be Achieved
•
Why first-time donors give
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•
•
The right thing to do
Help sustain the organization
Could afford to
Got a call/request
THE FUTURE IS NOW
STRATEGIES & TECHNIQUES FOR INTEGRATED PROGRAMS
2013 WASHINGTON NONPROFIT CONFERENCE
The Battle Against Churn Has Begun
•
The Whitney Museum’s “Curate Your Own”
•
Arts Club Theatre Company’s Super Subscribers
•
Pacific Northwest Ballet’s “Add-On” gifts initiative
THE FUTURE IS NOW
STRATEGIES & TECHNIQUES FOR INTEGRATED PROGRAMS
2013 WASHINGTON NONPROFIT CONFERENCE
The Symphony World
THE FUTURE IS NOW
STRATEGIES & TECHNIQUES FOR INTEGRATED PROGRAMS
2013 WASHINGTON NONPROFIT CONFERENCE
Audience Growth Initiative 2008
•
Why first time ticket buyers don’t come back
•
•
•
Atlanta, Boston, Chicago, Cleveland, Los Angeles, Milwaukee, New
York, Philadelphia, San Francisco
Oliver Wyman
Jack McAuliffe, Engaged Audiences
THE FUTURE IS NOW
STRATEGIES & TECHNIQUES FOR INTEGRATED PROGRAMS
2013 WASHINGTON NONPROFIT CONFERENCE
Audience Growth Initiative 2008
•
Changing the season of Churn, Churn, Churn
•
•
•
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•
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80% of first-time ticket buyers churned
Understanding what customers really value
Appreciating Judy’s Orchestra Experience
Nurturing first-timers, building loyalty and the Killer Offer
Outcomes
Surprise and Delight
THE FUTURE IS NOW
STRATEGIES & TECHNIQUES FOR INTEGRATED PROGRAMS
BO analysis &
clustering
Customer
experience
Offer design
& testing
Judy’s orchestra experience
“This was my first time back to the Orchestra since I was a kid, but it is
likely to be my last”
Illustrative
I hadn’t been to the
Orchestra since I was a
kid, so I bought 2 tickets
for a Mozart concert
That day, work got
completely crazy so I
couldn’t make it.
By then, it was too late to
have dinner. I was
starving at intermission
but the bar was super
crowded, didn’t have any
food and a drink was
$12!
I tried calling the
orchestra to exchange
the tickets, but I was
told my only option was
to “donate” them!
The musicians played
very well but I knew
nothing about two of the
pieces played
I decided to give it
another shot 3 months
later when my favorite
composer, Tchaikovsky,
was playing
Parking was a
nightmare. It took us 25
minutes to find a spot!
Imagine my surprise
when 3 days later the
orchestra called me to
ask if I wanted to buy a
subscription. I told them
no and then 3 weeks
later they called for a
donation!
Though I don’t think I
am ever going back,
they continue to flood
me with mail, phone
calls and emails. What
a drag!
Buy &
Donate
Now
© Oliver Wyman  www.oliverwyman.com
13
BO analysis &
clustering
Customer
experience
Offer design
& testing
Factor analysis
From the 78 attributes tested, we have identified the 16 most robust
factors that influence customer behaviors
Core product
Repertoire
 During the season, the
selection of works is
appealing
 During any given
performance, the selection
of piece(s) is appealing
 The selection of
performances within a
subscription series is
appealing
Hall
 The auditorium architecture
and décor are appealing
 The lobby is attractive
 The auditorium acoustics
are state of the art
Contemporary music
 I enjoy contemporary
orchestral music
 I like the sound of
contemporary orchestral
music
 I understand contemporary
orchestral music
 I am very interested in not
so well-known composers
Enriching experience
 Attending a concert is
stimulating
 Attending a concert is
entertaining
 Attending a concert is
always a special
experience
 I can feel a connection
between the artists and
myself when they perform
 I feel a connection
between myself and my
fellow attendees
Orchestra prestige
and quality
 The Orchestra brings us
famous guest conductors
 This Orchestra is one of
the nation’s leading
Orchestras
 The Orchestra brings us
famous guest soloists
 The musicians’ level of
play is always outstanding
© Oliver Wyman  www.oliverwyman.com
Music enhancement
Hall access
Social experience
Transactional
Music information
Access
Social outing
Planning &
purchasing
 The Hall is easily
accessible by public
transportation
 The policy regarding
latecomers is appropriate
 I feel safe in the Hall’s
surroundings
 I always find friends /
family members to go with
me
 I always top the concert
with a nice dinner or drinks
 I don’t mind going alone to
a performance
 I look for information on
the music before a
concert
Live commentary
 Pre-Concert discussions
increase my enjoyment
of the concert
 The conductor’s personal
comments enhance my
enjoyment of the concert
Special effects
 Special lighting and/or
visuals enhance the
music
 I can easily get schedule
/ price information on the
Orchestra’s website
 Purchasing tickets is
easy
Exchanges
Parking
 There are enough
parking options near the
Hall
 Entering / exiting the
parking lot is fast
 The Hall is easily
accessible by car
Ability to attend
 My health permits me to
attend concerts
whenever I want
 I never miss a concert I
have tickets for
Bar
 The Orchestra’s bar offers
the refreshments that I
want
 The service at the
Orchestra’s bar is fast and
friendly
 The Orchestra’s bar is
good value for the money
 Exchanging tickets is
easy
“The orchestra club”
 Being able to talk about
concerts give me some
“prestige” at work / with
friends
 I enjoy meeting other
attendees during the
Orchestra’s receptions
 I love events where I can
meet the performers and
the directors in person
14
BO analysis &
clustering
Customer
experience
Offer design
& testing
“Killer” offer for Unconverted trialists
Defined using the optimal levels for most attributes, the “killer” offer
increases share of single tickets by an extra 40% for Trialists
“Killer” offer
Base offer
 Weeknight
 Romantic
music
 All orchestral /
no soloists
 Program notes
on the website
 3 familiar &
unfamiliar
pieces
 Saturday night
 Quality seats
 Famous
instrumental soloist
 Favorite composer
 Conductor’s insights
in advance
 3 familiar & unfamiliar
pieces
 Quality seats
 Bring a friend for free
 Free drink
 Free exchanges
+40% share of
single tickets
Base
“Killer”
Source: Oliver Wyman Strategic Choice Analysis® survey, Box office data for weighting of orchestra, cluster and churn, unweighted N = 1,908
© Oliver Wyman  www.oliverwyman.com
15
Defining a new and comprehensive value proposition for
“Unconverted trialists”
Repertoire
Music
Social
information experience
Don’t surprise
me: I want
pieces that
‘ring a bell’
Initiate me:
Really?
Interesting to
know!
Enough familiar
concerts to
choose from
during the
season
Enough
background to
enjoy the
performance
© Oliver Wyman  www.oliverwyman.com
Let’s
socialize!: I
want to have a
good time
with my
friends
Enjoyable pre(and post-)
concert
experience
Exchanges
Access
Me too!:
I want flexibility
No hassle:
I just want
to park and
forget
about my
car
Easy to exchange Easy to get to
tickets, even for
and park at
single tickets
the hall
Relationship Compelling
building
offers
Don’t ask me
to marry you
after the first
date: I don’t
want to
commit yet
One step at a
time
Such a good
deal: A nobrainer to go
another time
Right discount/
promotional offer
combination
Socializing
opportunities at
the concert
16
2013 WASHINGTON NONPROFIT CONFERENCE
Pensacola Symphony
•
Retention strategies
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Single ticket holders received email thanking them for purchase
Program notes about the music, written by the Music Director
Tips on where to park and eat before concert
Buy one get one free drink offer
Killer offer
•
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By one get one free
$10 ticket offer for all local Air Force and Navy
THE FUTURE IS NOW
STRATEGIES & TECHNIQUES FOR INTEGRATED PROGRAMS
2013 WASHINGTON NONPROFIT CONFERENCE
Pensacola Symphony
•
Outcomes
•
•
Added 300 more subscribers
• 12.8% attended three or more concerts previous season
• 9% had attended two concerts
Annual Fund goal was met thanks to 10% increase in donors who
attended two or more concerts.
THE FUTURE IS NOW
STRATEGIES & TECHNIQUES FOR INTEGRATED PROGRAMS
2013 WASHINGTON NONPROFIT CONFERENCE
Additional Results
•
Patrons buying two or more concerts after receiving the
Killer Offer
•
•
Baltimore Symphony increased sales by 10.4%
Orlando Symphony by 22.6%
THE FUTURE IS NOW
STRATEGIES & TECHNIQUES FOR INTEGRATED PROGRAMS
2013 WASHINGTON NONPROFIT CONFERENCE
Key Learning
•
•
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Consider single ticket buyers
Build loyalty around what matters to your customers
Frequency trumps tenure
The Future
•
Surprise and Delight
THE FUTURE IS NOW
STRATEGIES & TECHNIQUES FOR INTEGRATED PROGRAMS
2013 WASHINGTON NONPROFIT CONFERENCE
Further Information
•
League of American Orchestras
www.americanorchestras.org
•
Symphony magazine
www.symphony.org
•
Jack McAuliffe, Engaged Audiences LLC
www.engagedaudiences.com
THE FUTURE IS NOW
STRATEGIES & TECHNIQUES FOR INTEGRATED PROGRAMS
2013 WASHINGTON NONPROFIT CONFERENCE
Arena Stage
THE FUTURE IS NOW
STRATEGIES & TECHNIQUES FOR INTEGRATED PROGRAMS
2013 WASHINGTON NONPROFIT CONFERENCE
Arena Stage
•
Donor loyalty was put to the test due to a recent venue
renovation
•
While construction was underway performances took
place in venues across DC and NOVA
THE FUTURE IS NOW
STRATEGIES & TECHNIQUES FOR INTEGRATED PROGRAMS
2013 WASHINGTON NONPROFIT CONFERENCE
Arena Stage
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Difficult to keep donors engaged during renovation
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Re-opened in Oct. 2010
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Subscriber numbers have grown significantly
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15,300 subscribers
THE FUTURE IS NOW
STRATEGIES & TECHNIQUES FOR INTEGRATED PROGRAMS
2013 WASHINGTON NONPROFIT CONFERENCE
Arena Stage
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Larger pool of donor prospects
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Using research to build engagement appeals
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Bi-weekly Board Screening effort
PLI
• Learn history and motivating factors
Wealth Engine
• Monthly screenings
• Integrated with Tessitura- capacity visible in header of patron
account
THE FUTURE IS NOW
STRATEGIES & TECHNIQUES FOR INTEGRATED PROGRAMS
2013 WASHINGTON NONPROFIT CONFERENCE
Arena Stage
• Planned giving
• 2 events-Coffee with Artistic Director and matinee performance
• One on a weekday for those who are retired, one on a
weekend, for those still employed
• Sent invitation to:
• Current members of the Full Circle Society
• Gave to Individual and/or Special event campaigns
08-13 with a total giving of $1000 or more
• Gave to Individual and/or Special event campaigns
08-13 with a total giving of $1000 or less with a
giving capacity of $100K+
• SW Residents with $500K+ giving capacity
THE FUTURE IS NOW
STRATEGIES & TECHNIQUES FOR INTEGRATED PROGRAMS
2013 WASHINGTON NONPROFIT CONFERENCE
Panel Discussion
THE FUTURE IS NOW
STRATEGIES & TECHNIQUES FOR INTEGRATED PROGRAMS
2013 WASHINGTON NONPROFIT CONFERENCE
Q&A
THE FUTURE IS NOW
STRATEGIES & TECHNIQUES FOR INTEGRATED PROGRAMS
2013 WASHINGTON NONPROFIT CONFERENCE
THE FUTURE
IS NOW
STRATEGIES & TECHNIQUES FOR INTEGRATED PROGRAMS
Changing the Season
of Churn, Churn, Churn
Eric Nelson, DCM
Russell Jones, New York Philharmonic
Danielle St. Germain-Gordon, Arena Stage