Case Study: Theatre Aquarius

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The Situation:

Exterior of the Dofasco Centre for the Arts, the primary performing venue of Theatre Aquarius.
Dofasco Centre for the Arts
With the economic downturn that began in 2008, attendance and revenue at Theatre Aquarius began to decline. As the decline coupled with the financial recession continued into the spring of 2011, General Manager Lorna Zaremba hired TRG Arts to analyze the theatre’s situation and improve revenue.

This analysis revealed that there were entire elements of the Theatre’s business model that were missing, which influenced an atmosphere of waning loyalty, specifically among subscribers. A few contributing factors were:

Pricing eroded loyalty

Theatre Aquarius has one venue that had been scaled traditionally, with more expensive seats in the front and the cheapest seats in the balcony. As is common with horizontally-scaled houses, the balcony filled well but there were visible holes in the orchestra section. Before rescaling, the Theatre addressed these visible empty seats by selling them as $15 (CAD—all dollar amounts Canadian) “Rush Seats” on the day of the show. This encouraged patrons to buy late and pay less, eroding the value of tickets and removing incentives to subscribe.

Overly complex pricing & packaging

As with many other arts organizations, the number of subscription packages and prices had grown by accrual rather than by design, with many variations created in the hopes of stimulating demand. With so many subscription choices, it was more difficult for the box office to sell and for the patrons who were confronted with complex decisions. Generous early bird discounts for renewing subscribers cost the Theatre needed revenue and also created an additional tier of prices during renewal time each year. In addition, the renewal discounts effectively increased prices for price-sensitive new subscribers.

5-show package didn’t invite subscribers to “step up”

Each year, Theatre Aquarius produces five regular season plays and a different holiday show each season. The largest subscription offered was the 5-play package and subscribers would be offered the Christmas show as an add-on. With less than 100% buy-in from subscribers, sales for these expensive shows started at a disadvantage. The marketing investment to meet the revenue goal was high and the goals were not always achieved.

Results:

In the two years since TRG began work, Theatre Aquarius has seen the following results:

Revenue:

Subscription revenue in 2013-14 has surpassed goal and has increased 20% in two years. Not only did subscription revenue increase, but as of March 2014, single ticket sales were also up 57% over last season.


 

Upgrades:

In the 2011-12 season, there were no 6-play subscribers. In 2012-13, the first season the 6-play package was introduced, 74% of subscribers upgraded. During the 2013-14 campaign, that total increased to 94% of all subscription packages sold! Due to upgrades and smart pricing changes, per capita revenue for subscribers in 2012-13 rose 16% above the prior season and was up a further 7% in 2013-14.

How they did it:

With the help of TRG, Theatre Aquarius simplified and improved their pricing by keeping loyalty in mind.

Scaling to encourage loyalty

TRG consultants and Theatre Aquarius re-scaled the house, with the goal of increasing the perception of success. “After rescaling, our hall looked good no matter what the size of the audience,” Box Office Assistant Manager Carolyn Drost said.

Among other things, the scaling process made Theatre Aquarius re-evaluate the $15 day-of-show seats. These became permanent $25 tickets available from the time tickets first went on sale. The new price encouraged newer, more price-sensitive ticket buyers to buy early and save. The Theatre maintained pricing accessibility by converting age-based discounts into a range of accessible prices which were available at every performance and to every ticket buyer, regardless of age. 

“We all had a degree of trepidation about removing senior pricing, since 70% of our subscribers self-identified as seniors,” Marketing Director Gregg Taylor said. “For us the key was communication. The box office identified subscribers who were most significantly affected and contacted them personally. Through a careful strategy we were able to explain the decision in a way that allowed our base to feel respected and valued.”

Smart package options

TRG recommended that Theatre Aquarius incorporate the holiday show into the main package and then proactively invite subscribers to upgrade to the larger 6-play package. Package pricing was reworked so that the 6-play package became the best value at only $20 more than the 5-show package. Subscribers were automatically renewed into this “best value package”; however, they were given the option of staying at the 5-play level on their invoices. 

“With a $20 difference between the new 6-play package and the 5-play package, it made the change seem like such a great value that almost no one said ‘no’,” Box Office Manager Susan Horridge Nuzum said.

Entire organization backs full series subscriptions

The whole organization got behind the 6-play package in a big way. Theatre Aquarius re-focused its sales materials to be more sales-oriented, promoting the value of subscribing instead of only promoting the productions.

One of the critical factors in the theatre’s success was incorporating the box office. The box office was instrumental in:
  • implementing the streamlining of subscription price levels from 36 possible price levels (with a $138 differential between the highest and lowest price) to 8
  • communicating the rescale and the new demand-based pricing policy
  • asking for add-on donations
“Prior to working with TRG, the box office saw its role in customer service in a more limited way. Now everyone understands that encouraging people to attend more plays and donate increases patrons’ loyalty to the theatre and actually improves their experience. For both subscriptions and single tickets we have learned to utilize our database resources to connect with our patrons. As a result we’ve moved from a model of passive engagement to a more dynamic service model engaged in sales at every level,” General Manager Lorna Zaremba said.

About Theatre Aquarius

Located in Hamilton, Ontario, Theatre Aquarius is recognized as a leader in Canadian theatre. Theatre Aquarius produces work of the highest quality, premieres new plays, develops the skills of professional artists, invests in youth and families and contributes to the quality of life in its region. Theatre Aquarius is dedicated to improving its region through the arts and embodies the qualities that define Hamilton as a community: an appreciation for excellence, an appetite for diverse ideas and a need to connect with one another.



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Theatre Aquarius case study from TRG Arts


Posted March 11, 2014




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