In a recent presentation to the League of American Orchestras, Eric Nelson and Kate Hagen tackled one of the most pressing issues facing our sector today: customer churn. With lockdowns and shutdowns behind us, we are working tirelessly to bring new customers into our venues, and we are doing it! New audience levels are at an all-time high, but they are slipping through our fingers worse than before.
The Growing Challenge of Churn
Churn has always been significant in the arts, but recent trends are alarming. From 2017-2018, 62-80% of new bookers did not return in the following year. This number worsened in 2021-2022, with 80-95% not returning for 2022-2023 programs. At the same time, US consumer monthly spending on subscriptions is rising, reaching $273 in 2021, up from $237 in 2018 (Forbes). Why are the arts seemingly not benefiting from this rise in subscription spend?
The Importance of Recurring Revenue
TRG Arts consistently emphasizes the importance of RFMG – Recency, Frequency, Monetary investment, and Growth. However, current data is concerning:
• 75% of new buyers do not return within two years. (They aren’t very recent)
• 80% of ticket buyers only visit once per year. (They aren’t very frequency)
• Less than 10% of donors increase their giving more than once every five years. (Growth is slow)
This lack of retention is a missed opportunity for revenue, as it is three times less expensive to retain a booker than to acquire a new one!
A Call for Reinvention
Eric and Kate highlighted the need to refocus and reinvent our relationships with audiences. Their presentation to the League of American Orchestras provided new data, trends, and insights to help manage these challenges effectively. Addressing these challenges requires a holistic approach. Programming, marketing investment, and our team’s bandwidth and focus all play crucial roles. By strategically aligning these elements, we can strengthen our connections with audiences and build a sustainable future for our orchestras.
To delve deeper into their findings, download the presentation deck and schedule a call with Eric Nelson to discuss how these insights can be applied to your organization.
