Gene Carr's Patron Technology Blog

Is E-mail Dying? Digital Preferences of Arts Patrons Revealed

There is something that's been nagging me for years, and it has to do with marketing research, and the urge to compare what we’re doing against other such studies.

For the last seven years, in an attempt to advise our clients and inform our presentations and seminars, we've fielded a national survey of arts patrons' online behavior by working with a selection of our clients and sending a survey to their e-mail lists. I've used this as a proxy for arts patron behavior in general and quote from it extensively in our publications. In fact, the whole first section of our new book, Breaking the Fifth Wall: Rethinking Arts Marketing for the 21st Century, reports on our 2010 survey.

Each time I present this data, inevitably someone will challenge the results by pointing out that since the survey is fielded solely via e-mail, the data is skewed -- the results don't really give an accurate assessment of the arts-going public, because the survey over-represents online interest and participation.

That it is a purely online survey is true, and we’ve always taken great pains to point this out when we present the data. However, my assertion is that the sample is actually a very close approximation of the entire arts-going public because such a large proportion of the audience is in fact online.

That's why I was so interested to find out that the most recent study released by The Broadway League, focusing on the nearly 16 million attendees of Broadway touring shows across North America, was conducted entirely online. They too have gone to a 100% e-mail-based survey approach.

Since both pieces of research were done in the same way, and ask many of the same questions and examine a similar audience, I thought that comparing our survey results with the Broadway League’s might shed some additional light on the nature of the online arts community.

Here's what we found. (For purposes of simplicity I'll refer to the Broadway study as "BL" and ours as “PT.”)

●  72% of BL's attendees were female. In PT’s, women comprise 66%. 

●  The average age of the Touring Broadway theatregoer is 53.8 years old, and PT's is 58.6. 

●  74% of BL’s audience held a college degree; 38% of PT’s audience had a college degree.

●   BL’s survey showed 31% held a graduate degree and in the PT study 50% had a graduate degree. 

●  46% of BL’s national theatregoers reported an annual household income of more than $100,000, and in the PT study it was 45%. (This compares to only 20% of Americans overall.)

 

As you can see, the demographics are relatively consistent across both studies. My explanation for why the BL audience is more heavily weighted to women is that our study included all performing art types, including classical music and opera, which tend to have a higher percentage of men as attendees.

Going on, let’s look at online behavior.

● In the BL survey, 36% of respondents were subscribers to the "Broadway Series" at their local venue. In the PT survey it was 33%. 

● Nearly two-thirds of BL audiences looked to the theatre’s website to find information about the show. The PT survey results were similar: 68% said the same. 

● 35% of BL’s Touring Broadway theatregoers used the Internet to purchase their tickets. This was much higher in the PT survey: 73% of our respondents said they bought tickets online in the past year.

Most of the participatory aspects of the two audiences’ responses are similar -- what surprised me here was what’s different. 

The online ticket-buying ratio for BL’s survey is much lower than the average from our survey. My theory is that this may have something to do with the way these series are marketed, or the degree to which these series are sold online versus in a more traditional direct-mail and print-oriented marketing approach.

As for communication preferences, 69% of respondents to the BL survey said they would prefer to receive theatre information electronically, rather than via postal mail. In the PT survey we offered an additional option: while just 48% prefer e-mail alone, another 37% prefer receiving both e-mail and postal mail (for a total of 85% of responders being “e-mail friendly”).

Out of everything examined in both surveys, it’s this e-mail preference that shouts out at me. Over two-thirds of the touring Broadway audience says that e-mail is the preferred method of hearing about shows. This is a staggeringly high number and speaks to the continuing power of e-mail marketing, particularly for those who are already online. As I wrote in a blog post earlier this year, the persistent rumors that e-mail marketing is less relevant in a Facebook-dominated world can be put to rest. Among the older audiences in the arts sector demographic, e-mail use is actually increasing.

So what’s a big takeaway here? I think it’s that when you survey an audience online, you find that those who respond to it overwhelmingly demonstrate a preference for online communication. So even if traditional methods are still at work, you ought to exploit online marketing to these folks as much as you can because they prefer it, it’s less expensive, it’s faster and you’ll get a better response rate from them.

It may now be a good idea to simply ask your patrons how they prefer to hear from you. You can do this through surveys, during subscription renewals, and even when they are buying single tickets. Once you now have information about each customer, you can segment your marketing and reach those who tell you they are interested in online marketing in the way they prefer. They will be happier -- your response rates will be higher.

We’re living in a world in which there are two audiences out there -- those that have adopted online marketing and those that haven’t. Why treat everyone the same?

 

 

A Springtime of Discontent: Two Paradigms for Thriving Arts Organizations

I spent last week at the League of American Orchestras annual conference in Minneapolis, and came away confused, concerned, and frankly somewhat depressed. My reaction didn’t stem so much from the problems the orchestra field is facing as from what people are talking about – or NOT talking about – in terms of solutions.

The conference last week emphasized the fact that things are pretty tough in orchestra-land. For the last two decades, there’s been no disagreement among thought leaders that the aging of the audience for classical music and the difficulty in recruiting large numbers of younger people is a central challenge. Pair this with the reliance on significant individual philanthropy from an existing but diminishing older audience, and you’ve got a combination that spells trouble.

The trouble now abounds, particularly for some of the country’s larger orchestras, and the recent economic collapse has weakened the financial footing of orchestras across the board. Government funding (both federal and local) is being slashed in the double digits as we speak. Corporate leaders who care about the arts are having more and more trouble convincing their companies to go out on a limb and support them. Foundation support has dwindled because the argument that orchestral music is a vital part of society is now relevant to only a very few major foundations. Costs to run orchestras have risen faster than inflation, and individual giving is not making up the difference. None of these facts should surprise anyone.

The main message of the orchestra conference, eloquently articulated by League president and CEO Jesse Rosen, was that artistic excellence is no longer enough. The industry must face its business issues head-on.

There were plenty of thought-provoking sessions by some of the leading thinkers in the field, all searching for solutions. We heard about “right-sizing,” economic planning, board development, and financial planning. All of these are relevant and appropriate. But sadly, none of these are easy, they all require a LOT of time, and all require that arts boards be willing to embrace change – which is by no means a given. I came away thinking that not only are there no easy answers, there is simply no consensus about what can be done right away that will make a difference in the next six months to a year.

In the days since the conference, I’ve done some thinking about solutions and have come up with some ideas of my own – ideas not only for the orchestra field, but for all art forms and institutions both large and small. These are changes that you can implement today that will make an impact nearly immediately, and don’t require raising funds. One is a purely an artistic paradigm, the other purely business:

1. Organizations will thrive if they make art that attracts a growing (not a diminishing) audience.

2. Organizations will thrive if they run themselves in a more and more efficient, effective, and professional way, and new technology ought to play a central role.

The first idea comes directly from a short speech at the conference by Larry Wendling, Ph.D., vice president, Corporate Research Laboratory, for 3M. He clearly and matter-of-factly described 3M’s alarmingly simple business approach: “Innovate and then add value.” He said it over and over: if you truly add value, people will beat down the door to your company (or concert hall).

And indeed, in the hallways of the Hilton Minneapolis, I heard stories from small and mid-sized orchestra managers that backed this up. A handful of managers told me that despite the economy, they were holding their own, or even improving in some key ways. Ticket sales were up, or subscriptions holding steady, largely owing to refinements in programming, pricing, or overall strategy.

A more dramatic example came from our client, the Stockton Symphony, which I mentioned more obliquely in last month’s article. Jane Kenworthy, the executive director/CEO, told me that Stockton, California, has a 17.3% unemployment rate and the seventh-highest foreclosure rate in the country. She said that “by all rights, our orchestra should have folded by now.”  

But she went on to describe how they had recently sold 3,000 tickets for a pops concert – the most they had ever sold for a single evening in the history of the orchestra. She was brimming with pride in having sold out the house and added that it had taken “years” for the board and music director to agree to initiate a pops series.

Was she bringing Mozart and Beethoven, as (some might argue) was the mission of a symphony orchestra? No. It was a pops concert, plain and simple. But she sold tickets – and lots of them.

Here is a plucky orchestra manager pulling out all the stops when the chips are down. She added value to her community. And how did she do it? By taking risks and trying something new. Jane said, “We are still innovating in the midst of this economic crisis!”

This is my first point. Organizations will thrive if they make art that attracts a growing (not a diminishing) audience. If you find ways to continually fill your house, your economic engine will grow. You’ll identify new donors, board members, and you’ll look much better to prospective funders. Nothing breeds success like success.

My colleague Diane Ragsdale took me to task last month when I suggested that in this economy, filling the house must be job number one, and bending the mission of your organization might be part of that equation. For a few days others chimed in, and it was a spirited debate. You can read the whole comment thread here.

Perhaps because I straddle the fence between the for-profit and non-profit world, I have developed a particular point of view. In the end, I’d rather my local orchestra stay in business and do two pops concerts a year along with their two classical concerts, and have a growing budget, bigger audience, and a positive story to tell, than doggedly stick to what it’s been doing for decades and face extinction.

And lest you think I’m merely suggesting that everyone do more pops concerts, or more productions of Beauty and the Beast, I’m not. Witness the fact that the recent “Spring for Music” festival at Carnegie Hall sold out nearly all of its events, and presented not a single piece of standard repertoire – it was all modern music. Witness the fact that that Jacob’s Pillow Dance Festival presents nearly all new work each summer from both established and cutting-edge dance companies. They don’t do The Nutcracker. I’m not passing judgment on what the art is. I don’t have an agenda. I am simply arguing for the creation of something for which tickets are hard to come by as a prime objective in tough times.

Now, let’s turn to the business paradigm: Organizations must run themselves in a more and more efficient, effective, and professional way, and new technology ought to play a central role.

I spend a good deal of my business life immersed in the technology world. Every day my inbox is overflowing with announcements about new technology innovations to make businesses more productive. In corporate America, companies are constantly seeking new technology to streamline their operations, do better marketing, provide better customer service, and save time for their employees to focus on their jobs. 

What struck me at the League conference was this: If technology is seen as a central and critical solution for American corporations, why is it not a more central topic for discussion in the arts? For instance, if I told you that new technology could reduce the time your staff takes to do their jobs by 20 or 30 percent, isn’t that a worthy goal? If time is money – then the right new technology can literally manufacture time!

In an industry in distress, why isn’t technology front and center as part of the discussion? And if technology is driving innovation at every level of the corporate world, why aren’t arts leaders embracing it?

What I know for sure is that new technology is nearly always present when industries in crisis manage to wriggle out of their troubles. The much-maligned newspaper industry, which was teetering toward irrelevance a few years ago, has made valiant strides in this regard, and now some of the very best iPad apps are those created by The New York Times and more recently the New Yorker. So why isn’t this happening in the arts?

I’m now heading out to California this week for the Americans for the Arts Conference and TCG, where I suspect I’ll be hearing stories similar to the ones I heard at the Symphony League. As I do, I’ll be thinking about these two paradigms for the direction the arts field needs to head: making art that adds value and attracts a growing audience, and embracing technology that helps it cut costs, market better, and run more efficiently.

These may not be the only things the arts world needs. But I would bet that if these are nailed, a lot of other challenges will be a lot easier to manage.

 

We’re In the Business of Tomorrow

Along with 15,000 others in a packed convention center in San Francisco last week, I witnessed an amazingly inspiring event. President Bill Clinton took the stage (introduced by Stevie Wonder), and held court for more than an hour, talking about what’s on his mind. From physics to green energy to the earthquake in Haiti, he outlined his take on what’s wrong with the world, what’s wrong with America, and how to fix it.

He said a lot that resonated, much of it relevant to the arts. My ears continue to ring with this phrase from his speech: “We live in a world where the way people get information is filtered through yesterday's categories." Put another way: We’re constantly making decisions about the future based on the lens of the past.

Clinton explained that in highly evolved societies like the United States (as opposed to developing countries), entrenched processes and economic interests make profound change much harder than in other societies. People cling to the ways they did things in the past out of fear, and out of self-interest. This stops innovation and leads to stagnation.

He used as an example the fact that while the U.S. once held the lead in solar energy panel production, we bungled the opportunity, and the Chinese and the Germans are now the ones who will likely own the industry. Clinton said that unless things change, we are on a path to becoming a country in decline, rather than one on the move. A sobering perspective.

His antidote? America ought to be in the “tomorrow business.” We need to recognize and accept how the world has changed, and adapt to the future. We need to make our plans for the way the world will be five years from now, not the way it was five years ago.

All of this resonated personally, because his thinking is very much in line with our company’s philosophy. In 2001, we were first to introduce e-mail marketing to the arts industry, recognizing that e-mail would quickly become a “must” marketing technique. We built PatronMail, and nine years later, e-mail marketing has indeed become mainstream. (As a small bit of evidence of e-mail’s prominence, our 1,800 clients sent out over 30 million e-mails in the last month alone.)

And, as you may know, we made our second big bet this year, launching PatronManager CRM to introduce CRM to the arts industry. If you’ve not yet heard about it, here’s quick video:

 

 

 

 

 

 

 

 

 

 

 

For those who don’t want to watch the video, here’s the skinny: PatronManager CRM is a cloud-based CRM system built for small and mid-sized arts organizations. It offers 21st century technology for next to no cost. It’s not a ticketing system, and it’s not a fundraising system. It’s an all-in-one system built from the ground up that instantly provides collaboration and efficiency for your staff, because it combines ticketing and subscriptions, e-mail marketing, day-to-day tasks, calendar, and fundraising in one web-based system. There’s no hardware to purchase and maintain, no software to install, and no IT person needed to operate it.

In the past, arts organizations operated stand-alone systems for ticketing, fundraising, and e-mail. But the world is changing, arts patrons are changing, and the technology options that are available to arts organizations are changing, too. The lens of the future shows that as our society becomes more and more web-connected, and social media and mobile devices take off, what’s required is an entirely new way of thinking – and thus a new approach to arts management and technology. That approach is CRM (customer relationship management) and cloud computing - in which all of your patron data, and all of your transactions and operations, are on the same system, accessible over the web.

That’s why, when we decided to build a CRM system, we partnered with one of the most dynamic and successful CRM technology companies in Silicon Valley, the $20B salesforce.com. Salesforce.com pioneered cloud-based CRM for the corporate market, and today has over 85,000 corporate clients and over 2 million users. Mark Benioff, Salesforce’s CEO, is also a non-profit visionary who, starting on day one, mandated a corporate commitment to philanthropy by creating the Salesforce Foundation. The Foundation has already donated technology to 9,500 non-profits worldwide, and our partnership takes advantage of this philanthropic program. (It was at the annual salesforce.com conference that I heard Bill Clinton speak.)

Indeed, we are in the business of tomorrow. CRM and cloud computing are the future of business technology; that’s why we’re introducing and evangelizing CRM for the arts. Our mission is to revolutionize the industry by providing world-class cutting-edge technology to arts and non-profits, at a price they can afford, and CRM fits our mission.

I hope in the year to come, you’ll join me in looking at the world with your own lens of the future. The economic climate is challenging, and your jobs are not getting any easier. New technology is a proven way forward to building better, more robust relationships with your patrons, and maximizing every moment of every staff member’s precious time. And just as e-mail went from unknown to commonplace in five years, I predict that CRM will quickly become a “must-have” technology for the arts.

In 2011, as you wear that lens of the future, we’ll help guide the way. I’m pleased to announce that early in the year, we’ll publish (in print and for Kindle/iPad) a new book I’ve written with my colleague Michelle Paul, outlining our vision of arts marketing for the 21st century with a focus on CRM, e-mail, websites, and social media.

I hope as we travel around the country in this coming year, you’ll attend one of our seminars or presentations. Despite the efficiency of e-mail and webinars, there’s nothing like meeting you face-to-face, and we look forward to it.

On behalf of our entire staff, thank you for your support. We wish you a wonderful holiday season.

 

If you'd like to learn more about PatronManager CRM, click here.