Forget About the Hamilton Effect. Focus on the Power of ‘And’.

Forget About the Hamilton Effect. Focus on the Power of ‘And’.

How Omaha Performing Arts capitalized on the extraordinary and explosive opportunities around blockbusters.


By Keri Mesropov, Vice President of Client Services

In the world of Broadway, The Hamilton Effect is synonymous with a massive surge of sales a presenter experiences in the year it presents the industry’s most exceptional blockbuster and the desire to replicate it again in the future. The problem is that it is atypical, focused solely on short-term revenue gain, and centers attention around the production itself. To be clear, The Hamilton Effect does not center around the people who come see it. 

In the work that TRG Arts does with clients who present chart-topping blockbusters, we focus on maximizing the short-term gain (revenue) with the intent of focusing on the long-term impact these blockbusters can, and should, have on an organization by focusing on creating an environment conducive to building loyalty. In our counsel, we refer to this as “sticky money.” We know blockbusters will attract thousands of patrons to your hall for that singular performance but our question to you is this: how are you going to get these patrons to return? How do you get them to stick and build loyalty? 

Blockbusters tend to do the heavy lifting when it comes to short-term revenue. Frankly, it’s easy to make loads of money on a blockbuster if that immediate need is a myopic view. What is harder and more intrinsically valuable is to see the blockbuster as a launching pad for building sustainable patronage. How are you effectively leveraging over-the-top popular programming for the long-term good of your organization? 

Omaha Performing Arts (OPA), one of the nation’s preeminent presenters of first-run Broadway programming, knows how to play this longer game. Since its founding, Omaha Performing Arts has grown to become the largest arts institution in Nebraska, dedicated to the mission to present the highest level of performing arts. As a presenter, the organization has a deep commitment to patron loyalty and is keenly aware of how to focus their pricing strategies to maximize revenue and develop more loyal audiences by leveraging demand management practices, including dynamic pricing and inventory management. Since 2002, OPA has reached over 4 million people, engages more than 303,000 young people through educational activities, and has a $48 million annual economic impact on the Omaha community.

Omaha Performing Arts regularly presents the hottest musicals to very high demand. Four years ago, through its relationship with TRG, OPA began an organizational-wide strategy to create loyal patrons with the goal of sustainability. Step One was an initiative to turn more of their subscribers in to donors because we saw opportunity in the fact that only 12% of OPA’s subscriber base was also a donor of any amount in fiscal year 2016. In understanding OPA’s situation, we wanted them to consider the following: 

Patrons who add ‘and’ statements to their transactional ledger with an organization are retained at much higher levels than those that only transact in a singular way (single ticket, subscription, donation) – in some cases by as much as 4 times
 
Knowing their subscribers’ value the experience they have with the art first and foremost, OPA developed a strategy to invite subscribers to add an ‘and’ to their transaction: 

Become a Super Subscriber for just $100 and enjoy benefits that enhance your experience with the art you love. 

The first year’s results were minor – with minimal effort by the OPA team: 100 subscribers elected to add-on the donation. But in fiscal year 2017, with a full-on, robust and multi-channeled campaign, the number of Super Subscribers grew to 485.

In a strong lead-up to their Hamilton Season (in fiscal year 2019), OPA poured effort into its Super Subscriber campaign and for the fiscal year 2018 season, 742 subscribers said, “Yes! I’d like to enjoy the benefits of being a Super Subscriber!”

The Results:

OPA had not only generated more philanthropic revenue over a three-year period, but the organization secured more loyal patrons for the future: OPA’s renewal rate for super subscribers in fiscal year 2019 was 91%. What about the renewal rate for those who opted to not become a super subscriber? For fiscal year 2019, the non-super subscriber renewal rate was 81%. 

The Takeaway: 

Every year, but notably in a year where demand is expected to be unusually high, look to create ‘and’ invitations for patrons. By doing so, you are giving them opportunities to become “sticky” and vested in your organization. 

Upcoming Opportunity: 

Thinking about how you can maximize your subscription revenue? Join us for our new online Subscription Campaign Planning Summit on 9/25/19 or 11/6/19 to learn best practices.


References:


Posted January 23, 2019
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