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Arts and Culture Leaders,
Before the end of 2024, I’m working to connect with as many executive leaders in the sector as possible to hear, in their own words, where they believe the sector stands four years after the pandemic—a moment in time that still has us discussing everything in terms of “before” and “after.”
The conversations are complex and cover the full landscape of our industry. If there is a word to sum up the concern right now though, the word is money. Those who have cash reserves want to hold it for the unforeseen needs that may arise. Those who have major budgetary gaps have obvious concerns of needing to close them. When venues reopened after the worst of the COVID period, we all knew that we had to rebuild back to 2019 levels. What we didn’t know then was how insufficient that would be due to inflation.
I wonder if we are forgetting that the “before” times were also hard. Weren’t deficits commonplace then? Weren’t donors just as relied upon? Were relationships between chief execs and artistic directors any easier in the nostalgic bliss of pre-pandemic times? Discounts were still as tempting and audience diversity just as needed. Right?
These “D” words have caught my attention. I think they’ve been with us all along. I want to take a moment and step through each of them in light of my recent conversations. I hope you’ll feel you can relate and benefit from these reflections.
Deficit
This is the one that sits beneath all the other problems, the one that if you could fix it, the other issues would be greatly allayed. But why are budgetary deficits so ubiquitous in our sector? COVID was a serious challenge to be sure, but there were shortfalls before. Regardless, today the gap numbers are huge. The factors diverse. We hear that the subscription is just not working anymore; but we have plenty of evidence that it can and does. We hear, too, that younger generations don’t attend, but again: we see different evidence that causes our firm to ask clients and prospective clients: are you pursuing and working to retain them? Most of the leaders I spoke with don’t “have time” to plan over multiple years, much less to consider the lifetime revenue impact of retention and organization-wide engagement of their audience and patron segments. Recurring revenues.
There are many factors, but the reality is that the cost of doing business has risen some 25% percent since the pandemic. Unless your organization has matched that percentage in your ticket prices and maintained the same or increased audience and patron levels, you’ve felt it. The costs have risen; so, too, have revenue goals. Has your organization’s revenue management and retention practices risen accordingly?
Donors
Some organizations are lucky. They have the board member or patron who hears about the shortfall and without hesitation writes the check to help address the short-term problem. Others take to social media or other channels to put out a plea. Regardless and in either case, we’re treating symptoms and not root causes.
Don’t get me wrong. Advocates and donors are wonderful and needed. But counting on the “one-hit wonder” largess of private persons or public government is not a business plan. Revenue-focused engagement strategies are at the core of our work with clients. As I often say, “nonprofit is a tax status, it shouldn’t be an attitude.” But culture trumps all. Entrepreneurialism generated and cultivated from within creates abundance, momentum, and solutions that energize widely, inside and out. We teach this in our client relationships. We can help.
Directors
The artistic director is sometimes the chief executive too. But when that is not the case, we often find tension between the person responsible for the stage and the person responsible for keeping the lights on. This can be because of disagreements about artistic investment priorities, how much to invest, and how to commercialize those investments. Sometime the creative priorities and the capital priorities are irreconcilable. What then?
An unflinching commitment is needed by both exec and artistic director to get the organization stabilized and capable of delivering on its mission. Often, this requires audience volume and wide-community relevance that yields short-term revenues. Yes, organizations can “blockbuster” themselves to death. This never works in the long term. But it’s also possible to marginalize existing audiences right out of support and attendance now and forever. Getting the mix right and letting data drive decisions and arbitrate disputes is the way forward. We teach this in our full suite client relationships. We can help.
Discounts
You know what they say, when the times get tough the tough offer seats for 30 quid…
Here’s the truth: it’s much tougher to stop papering the hall; to stop putting good marketing money into shows that aren’t selling; to stop thinking short term. Organizations that offer regular discounts, especially late in the selling cycle, are broadcasting a message to audiences that they should wait for the best deal. We’re not alone here. It’s cold comfort from my point of view, but our current retail environment can teach us a lot. From ToolsGroup, a leading retail supplier, that echoes so many voices in the retail sector right now: there are diminishing returns of discounting in a promo-saturated market. Discounts may drive demand in the short-term, and we know that feels relevant and like it meets demands of the “now.” But long-term discounts don’t’ drive demand, they scare it away and discourage early booking, loyalty and relationship, and train audiences to behave in a detrimental way for your long-term financial stability.
Discounting has its place. That place might be for the encouragement of multi-buying– think Costco – where customers receive cheaper prices per unit when they buy in bulk. Discounts can also be great for offering very specific segments incentives to return. There are many strong tactics anchored in customer long-term relational strategies, but an unconsidered strategy of discounting to ease short-term pain is a bad idea, full stop.
Diversity
This sometimes loaded word is synonymous with values and vision statements. But what do we practically mean? Based on the conversations I’m having, we mean we want to see younger audiences with more racial diversity. How do most venues go about achieving this? Marketing schemes that try to be relevant? Seeking relevance through programming? Sometimes even going so far as blatant exclusion of other audience demographics for particular events?
The word “culture” has the same root word as “cultivation”, which means to sustain conditions suitable for growth. In the context of gardening, this is never an overnight process, no matter the fertilizer. In short: this takes time. With long-term sustainability in mind, please: don’t let your noble goal of being inclusive to all result in fracturing your audience into endlessly divisible segments. It’s too much! Find the beautiful unity within the beautiful diversity of your community through the art you produce, the welcoming posture you adopt, and consideration of where access may be an issue. And then solve for it. TRG’s approach to customer journey mapping helps identify where opportunities and challenges exist in practical and unifying terms. Revenue and access must be built together, at the same time. We can help.
Okay, so these are 5 “D” words on everyone’s mind in arts and culture. No doubt you have thoughts, feelings, or emotional outbursts for us. We want to hear. Because we believe we can help. Our consultants have a century of combined experience in this sector. They have seen it, been there, and are ready to roll up their sleeves and work alongside you. Let’s push the word pattern a little too far and close with more “D” words. Lead with a dream not with fear of doom. We are here to help you do it.
Jill S. Robinson
CEO and Owner, TRG Arts