Data is everywhere these days. Our hunger to collect it is the “new normal” in keeping up with the Joneses. Collecting data is critical, but so is making the time to use it. If you’re spending almost all your research time measuring data and almost none of it applying data, your priorities are out of whack.
(Compare it for a second to hoarding in your basement. You’ve been putting things down there for years that you mean to use some day, and now scattered between your holiday decorations and your tools there is a mass of boxes filled with old t-shirts, decades-old birthday cards, random tools, and broken lawn furniture. You’d rather have a simple home gym down there, but there just isn’t room. Even though you know better, you just keep moving a few more boxes of junk down there every year.)
The things in your basement wouldn’t be junk if you actually were using them. The same is true with data. To make time to use it (learn from it, apply that learning, generate results), you may need to cut back on how much data you are collecting (at least for a little while). I can’t tell you everything you should cut, but I can say that if you were only able to prioritize three pieces of data, these would be the three I’d pick:
1) Churn
Churn measures the percentage of audience members you had in one year (or in one program) who do not return the next year (or to the next program). This is a critical metric because it allows you to understand what percentage of your audience you are able to consistently “keep.” The costs to acquire new audiences or to re-acquire lapsed audiences are always greater than the cost to retain existing audiences. If you know what your churn rate is today, you can begin to test strategies to lower that churn rate, keep more of your existing audiences, save the money you would have spent re-acquiring them once they lapsed, and ultimately have more budget to allocate towards acquiring other new audiences instead.
Graphic care of Saascoin.
Knowing not only how much churn you are experiencing, but who is churning (and who is not) and which programs are resulting in your greatest churn rates (and which are not) can also be very actionable data.
If there is a single-ticket buying segment of your audience that has reliably attended long enough, you may not need to spend as much money advertising to that cohort. Their reliable buying habits may mean they don’t need to receive every postcard or brochure you produce in order to attend.
If you look at the profile of audience members who consistently do churn you may find some strong commonalities. Perhaps they share some age or geographic similarities. If you are a major travel destination, perhaps your out of town audiences are skewing your churn numbers and it would be wiser to analyze local and national churn differently.
You may also find a higher churn rate for audiences attending a certain event or a certain kind of programming. This is critical data for you to share within your leadership team. On the one hand, it may be that these are blockbuster programs that bring people out of the woodwork once every five years. If you need to plan for a mass injection of audience and revenue, these are certainly worth continuing at an appropriate frequency.
However, you’re experiencing a higher than average churn rate at events that are seemingly normal core mission programming, there may be a cause for alarm. Is there something about the experience at that concert or that exhibit that actually turned people off from attending again? Was it the program itself? The context for the program? Or the quality of customer service at that program?
Recognizing program-specific churn may lead you to do more research to try to learn why. It may lead to conversations among your leadership about discontinuing the program - or about targeting your marketing efforts exclusively to people with the greatest intrinsic interest in the program. You may end up with less people attending the event next time, but if you have weeded out the portion of your core audience that won’t like the program anyway, you have sacrificed their short-term investment to secure a long-term one, instead of the much more harmful converse.
2) First Year Drop Off Rate
Bringing first time audience members into the fold is critical to the long-term success of your organization. (It’s just as critical retaining the audience members you already have!) Once they’ve attended for the first time, then what happens? Measuring your first year drop off is key to answering that question. This metric lets you see which percentage of new attendees in one year (or at one program) returned subsequently over the next year (or to the next program).
Analyze this figure and you will be surprised at how high this number is (and therefore how small of a percentage of your new audiences are actually returning). The study that put this into stark relief for me was one conducted in the early 2010s by the Elliott Marketing Group in Pittsburgh, where data on seven of the anchor institutions of the Pittsburgh Cultural District (including the regional theater, the symphony, the ballet, the Broadway touring house, and others) was analyzed over a ten year period. The study looked not just at the return rate of audiences to one organization, but to any organization within the district. After one year, approximately 15% of first time audience had returned to any other organization in the group. It took ten years for two-thirds of first time audiences from the first year of the study to have returned to the Cultural District, even once. That means a full third of ticket buyers simply never came back.
We would like to believe our art forms are “stickier” than that. But the data continues to prove otherwise. There is a litany of reasons why a first-time attendee might not return, some of which are in your control and some of which are not. I am confident that a deeper analysis of first year return rates will come out of the research that the Wallace Foundation is currently exploring in its Building Audiences for Sustainability initiative. Through that initiative, they have been able to look at data from around two dozen “blue chip” performing arts organizations across the country and across disciplines (theater, symphony, dance, opera, and multi-disciplinary arts centers). When Wallace-funded research examined this question at Opera Theatre of Saint Louis, JCA Arts Marketing found a (comparatively) whopping 21% of first-time attendees returned the next season (gentle growth from 18% a few years prior). For some other peers in the cohort that percentage could be as low as 8%.
Average Return Behavior of New First-Time Attendees
It doesn’t matter if the number is 21%, 15%, or 8% though. Those numbers are scary. But facts are our friends. And, just as with churn, knowing where you stand to start gives you the power to measure your progress. Whatever your number is now, even increasing that number by one or two percentage points can translate into tens of thousands of dollars of incremental revenue. And it’s not only the short-term revenue that will have an impact. It’s also the the long-term impact of building greater loyalty more quickly. At OTSL, analysis of our audience trends showed that once a patron purchased tickets to between 4 and 5 productions over a 4 year period, that patron could reliably be considered part of our “casual core” - reliable casual attendees. Special offers were no longer needed to retain them. They had internalized a level of loyalty that now made attending our festival a habit.
Every new audience member you can get to return (and return quickly) is an audience member who has the potential to build that level of loyalty. Every audience member you lose in the first year is someone you are going to have to invest meaningfully in to get to return one day in the future. (And while they are not attending your organization, they are probably building loyalty and habit with your competition - whether that’s another theater in town, a free concert series in their neighborhood, a chef’s table event at a popular restaurant, or Netflix and Hulu.)
Here, just as with churn, having data allows you to model out audience profiles based on behavior. Are there commonalities you can define among first-year attendees who do return? Are there certain kinds of programs they tend to come to first? Certain kinds of programs they tend to come to next?
With that data, you can begin to direct existing new audiences towards programs that attracted other similar previous first-timers. You can also develop a marketing campaign to attract more people who match the profile of current returning first-timers to become your next wave of new audience members. After all, to improve first-year return rates, you don’t just have to make more existing first-timers return: you can also find more first-timers who are more inclined to return organically and bring them into your pipeline.
3) Net Promoter Score
If there is one data point that can help predict the likelihood of someone returning, it is their net promoter score. You are likely familiar with the concept, which was introduced in 2003 by Fred Reichheld in an article in the Harvard Business Review. The premise is simple: people who rate their experience with you very highly (promoters) counteract people whose experience was negative (detractors) in the court of public opinion. Subtract your percentage of detractors from your percentage of promoters and you have your net promoter score. If you have more promoters than detractors, your score is positive. If you have more detractors, the score is negative.
Whereas the other two measures I’ve mentioned require you to simply analyze existing data from your CRM system, to get this data point you do need to survey members of your audience. Thankfully, the question you need to ask is fairly straightforward: “Based on your experience, how likely are you to recommend [insert the name of your organization] to a friend or a colleague?” If you can create a mechanism to survey your audiences with just one question, make it this one. Put it in your customer satisfaction surveys (and put it in early so that if patrons don’t finish the survey, at least you got this answer). Set up an ipad in your lobby at each exit point so that people can see the survey as they go and answer it (and to connect the response back to a patron, ask for their email address while they’re at it).
Your net promoter score (particularly if its low) may drive you to survey your audience further to understand what factors are driving it - and to discover what you need to do to improve the quality of your patron experience. Whatever it is today, odds are you can still make it better. The higher you can raise it, the more likely you are to see your churn rates and your first year drop off rates improve - and the more likely you are to see your audience (and your revenue) grow!
Infographic courtesy of Netigate.
Now, as with all rules there are exceptions. If you can only make time to measure and act upon three pieces of data, I strongly encourage you to start with these three. However, not all data is actionable at the moment you receive it. Some data only serves us well when it is longitudinal. (Longitudinal data is information that spans across a lengthy period, allowing one to assess broader multi-year trends). If you there is a specific question you want to answer, but you need to see trends in order to answer it effectively, put that question in your post-performance survey now too. If you need to, add other questions along the way that you discover you need to answer. Odds are that by looking just at churn, first year drop off, and net promoter scores, you’ll find that there are more questions you’d like to answer than you could have dreamed of before you started. Just be sure the questions you ask actually can lead to something that is actionable.
And… promise yourself that when you reach that critical mass of information from any of those other questions so that you can act on the data, you do. Don’t let all that valuable information add to the mess of cardboard boxes, plastic tubs, and “one day” usable again tools collecting in your basement!