If we believe our patrons want and deserve the best, then why are we offering them the least? As part of our ongoing campaign planning counsel with clients, TRG Arts is often surprised that organizations don’t contemplate how smaller packages represent a missed opportunity with full subscription. In an effort to provide choices for potential package buyers, they undermine their ability to acquire subscribers who might buy the full season, given the right strategic messaging.
This is particularly problematic from a loyalty perspective, as TRG Arts research shows that flex buyers have double the attrition rate of subscribers. Even if flex buyers spend more per ticket, they are twice as likely to disappear, making them shakier ground on which to build loyalty.
Offer the Best
What is a subscription but a set of experiences? A great deal of time has gone into curating what those experiences will be. Let’s face it: everyone is busy. Given the opportunity, it is not surprising that patrons are opting for flexibility over value. Offering too many options or smaller packages early in the sale cycle can undermine your subscription growth. It’s a slippery slope. You’re not doing your patrons or your organization any favors by offering the least.
Here’s an example. When the Virginia Repertory Theatre hired TRG in January of 2017, the first thing we noticed in their sales trends was that, after several years of flat sales, there were now declines in their main series but significant growth in flex packages. While the success of flex was being celebrated, attention was not being paid to the main revenue and loyalty drivers of their fixed series. A quick review of their season brochure held the answer.
All the shows in their multiple series were well represented in the brochure, yet when it came time to order, the clearest option was to select any three or more shows and receive a discount. Further, there was no incentive for choosing the fixed seat packages that would offer the best experience and build loyalty.
The first (and easy!) steps to correcting the negative sales trends were to remove flex options from early offers. Their marketing team went on sale with the best: best seats, best prices, best value. Next, we approached previous flex buyers and offered incentives to upgrade to fixed series. Lastly, we reduced the discount for flex buyers. We rewarded the loyalty of full series subscribers by preserving the best options for them.
The results: Fixed series units increased 28% in the 5-show Signature series and 22% in their 3-play Hanover Tavern series. Flex units were also maintained, with new buyers coming in at the end of the subscription campaign and through the start of the season.
We’ve seen it again and again. Organizations try to put all the options in one brochure, when they should be offering only the best, first.
How do you know if you're offering the best? Data!
It’s clearly important to measure subscription campaign success by renewal rate – the higher, the better. But do you also know your downgrade and upgrade rates? Measuring how many renewing subscribers move between fixed and flexible packages or between large and small packages, is an essential indicator of patron loyalty.
Grant Park Music Festival decided to introduce Create Your Own Memberships in 2016. Survey results from members indicated a strong desire for more flexible options. However, it was important to mitigate the revenue risk from downgrades as much as possible.
With TRG’s help, the Festival strategically structured their offerings so that the fixed memberships would retain deeper savings rates and select enhanced benefits, while the Create Your Own options would provide early access and flexible scheduling. Messaging in renewal packets emphasized the differences between these options, with a clear emphasis on the added value provided to fixed series members.
In the first season, the Festival achieved a 78% overall renewal rate. Eight out of 10 renewing members opted to stay in the fixed package series, proving that despite the survey results, solid campaigns with the right incentives can motivate people to behave differently than their expressed desires in surveys. Today, in year three of these efforts, upgrades continue to exceed downgrades by a nearly two-to-one margin.