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Just two weeks ago, I presented the Keynote speech at Leap Technology’s 2024 Patron Manager Community Meeting in (chilly) Las Vegas. It was a wonderful event, full of the positive energy of a community that hadn’t been together as a group since prior to the pandemic. There was much to celebrate: good news within their community regarding revenue recovery; innovations taking place on the Patron Manager platform; and reinvigorated relationships and sense of community.
In my keynote, I donned my MythBusters hat (do you know these guys above…Jamie and Adam from the Discovery Network’s MythBusters series?) and busted some arts myths that I think we now must challenge.
Let’s start with ticket buying myths:
Myth 1: We just need more and new audiences to fill our halls, exhibits and pipeline.Bust: The truth is we are acquiring new audiences at a pace that beats pre-pandemic times. In North America, 50% of our audiences are new right now; prior to the pandemic that number was 43%.
Good! (you say). We need them!
My question is, “really”?
There have been so many incentives to increase new audiences over the past 20 years or more, either by governments or funders or boards. And yet: new audiences are expensive to acquire and even more expensive to retain. And before this pandemic, we already had an “over-prospecting-under-retaining” problem in the arts. Unfortunately, it’s even worse now.
What used to be new single ticket/admission churn rates of 75% are now ten points higher at 85%.
Why does this matter? Our ability to pay artists, staff and production costs requires us to have depend-on-able revenues. With such a leaky bucket, we can’t catch up. Do your organization’s math. Based on your current single ticket buyer average investment level, what would a 5% reduction in churn mean to your financial bottom line next year? And to the year after that? Those patrons in your database who ARE frequent? They take less time to return, and they cost less to retain year after year.
New audiences and ticket buyers are expensive to acquire…so let’s work to keep them active!
Myth 2: People are buying later than ever. Bust: The data does not tell this story. Prior to the pandemic, 66% of our audiences were buying three weeks prior to opening, now that number has REDUCED to 62%. What’s the deal? The research says that people are being more choosy, more plan-ful, and they’re making decisions much more practically about where and how they’re going to spend their time and money.
What does that mean to you? We find that non-profit administrators think WAY too much about organizational needs and priorities and not NEARLY enough about customer priorities. How can that change in your organization? First, consider backing up your marketing cycle to match your customer sales patterns. Second, be sure your customer is front and center in your thinking and communications (think photography, copy, and more). And finally, ask your customers what matters to them. Regularly. And then connect what you do to their priorities.
Myth 3: We can’t raise prices given inflation. Bust: Compared to 2021, when we were emerging from the throws of the pandemic, TRG’s client customers are now paying 14% more for each ticket they’ve purchased, and that is because TRG clients generally grow prices every year, including during the pandemic. They achieved this revenue growth without sacrificing volume growth.
What was the Arts & Culture Benchmark average increase over the same period? Just a 3% increase. You’ve regularly heard me talk about the non-profit mindset and here’s a place where I’ve heard it explicitly when I’ve heard statement like, “we can’t increase prices…it’s not moral or ethical,” or “we can’t be the first to increase prices in our market,” or simply “our customers won’t pay it”. I challenge you to put your business hat on, because the BUSINESS mindset would say, “I have artists and staff to employ to ensure our mission is possible in our community. I’m going to ensure we’ve evaluated the data, looked at the realities in our community, and take necessary steps to price fairly for our organization and our community.”
Next up we have philanthropic myths. Through the end of 2023, the number of gifts in North America had grown 6%. But revenue from philanthropy? It has declined 20%. So, yes: compared to pre-pandemic times, we encouraged many more people to “give”. Some of that was ticketing turn-backs when organizations couldn’t produce or present; much of it was entry-level giving. We all know that philanthropic giving to the arts has not grown.
Myth 4: Our donors will continue to get us through. Bust: it seems less and less likely. Over the past 30 years, the share of the charitable dollar dedicated to the arts has shrunk from 13% to under 5% today, making it the second smallest of the nine categories into which giving is divided. And more depressing, the Benchmark describes that fewer than 10% of donors increased their giving over the past five years.
The non-profit mindset often says, “my development department will close the gap.” Often, organizations budget with that assumption! The provocation I’d offer is that it’s much more complicated than that. The ability to close the gap through philanthropy requires that your organization prioritizes the relationships that exist as event attendees and ticket buyers…that you invest in and nurture them, WAY before you’re asking them to become philanthropically engaged.
Because Myth #5 is that giving capacity as described by sheer wealth provides ANY indication of future philanthropy. Bust: in most cases, just because someone has the capacity to give means NOTHING unless they have a connection to and relationship with an organization.
My take? You’re going to have to get clear-eyed about where your organizations’ future recurring revenue is going to come from. Investing in the relationships that already exist within your customer relationship management system is an excellent way to start.
Let’s continue this conversation. I invite you to join me and my brilliant colleague at TRG for an encore Executive Convene titled “Programming it Right: Planning with Recurring Revenue in Mind” this fall. This unique opportunity is tailor-made for chief executives, artistic leaders, and revenue-generating teams, providing a collaborative space to strategize on building a resilient future together.
Key Dates to Remember:
Boston, Massachusetts: October 15-16Newcastle, England: November 7-8
Spaces are limited, so I urge you to book your slot soon. Bring your team and join a community of forward-thinking leaders ready to make a significant impact. This is your chance to transform insights into actions and ensure your organization not only survives but thrives in the future.
Click here to reserve your spot and be part of shaping the future of the arts.
Jill S. Robinson CEO and Owner, TRG Arts