The Situation:
Royal Manitoba Theatre Centre (Royal MTC) was stable throughout the recession. However, the company saw a dip in patron-generated revenue in the 2011–12 season, attributed to changes in their entertainment landscape, including the return of the beloved Winnipeg Jets. With flat annual fund donations and declining single tickets and subscriptions, Royal MTC prioritized reversing patron decline and revenue losses.
Royal MTC relied heavily on their subscriber base, which was one of the largest among Canadian regional theatres. Even with strong renewal rates, subscriber decline is inevitable without strong campaigns to attract new subscribers. In Royal MTC’s case, the subscriber audience far outweighed the single ticket audience, which meant they often did not have the sheer number of leads necessary to fuel successful subscriber acquisition campaigns. That, coupled with a low volume of individual donors, created a patron loyalty challenge at Royal MTC.
Work began with TRG Arts in January 2012, focusing on creating sustainable patronage for the 2012–13 season and beyond. TRG consultants and Royal MTC staff started their Capacity Building consultancy with single ticket sales and entry-level annual fund donations. By changing the organization’s focus, implementing best practice campaigns, and a relentless attention to the data to tailor and update plans, Royal MTC has experienced incredible growth in key loyalty-building patron-generated sources of revenue.
Low investment by donors
For many years, annual fund giving had been relatively flat, both in terms of revenue and donor numbers. TRG’s initial analysis revealed that the number of donors was proportionally low compared to their total patron base.
Why might donors be investing so little? Digging into Royal MTC’s previous campaigns, TRG found that Royal MTC’s appeals asked for both annual fund and endowment gifts. And, the endowment campaign was crafted with more direct solicitations (such as direct mail) while the annual fund had more passive solicitations (such as ads in the playbill). Royal MTC prospected the same patron pool for the endowment and the annual fund gifts, and the associated giving levels created confusion among the patron base as to which campaign was the best use of their resources—especially with entry-level donors. The result of the mixed campaign messaging was that donors often made gifts to the endowment campaign but ignored the operational needs that are inherent with a theatre, and Royal MTC missed the opportunity to educate their donors about sustainable support. It created a loyalty problem as the entry-level donors gave to the endowment and considered their support for the theatre to be “done.”
Insufficient single ticket buyers contribute to subscription losses
Royal MTC was not attracting enough single ticket buyers to cultivate into new subscribers. As a result, subscription sales had been uneven for the past several years. Analysis of Royal MTC’s single ticket campaign strategies revealed an over-reliance on mass media (advertising on billboards, radio and bus banners) and an under-reliance on relationship-building strategies (direct mail and email) to current and lapsed ticket buyers. Direct marketing only made up 3% of the single ticket marketing budget. Thus, the theatre was not communicating directly with the segments of patrons who would be most likely to buy, such as single ticket buyers who had already attended the theatre or lapsed subscribers. By shifting resources to support best practice campaign strategies, Royal MTC had the opportunity to continue to prospect for new ticket buyers while developing relationships with current and past audience members.
Loyalty matters
How does a theatre grow patron relationships? By moving individuals up the “loyalty staircase” one step at a time. Royal MTC needed to create a broader single ticket base to move up the loyalty staircase and sustain the subscriber base. On the fundraising side, Royal MTC also needed to create more entry-level annual fund donors (most often comprised of current subscribers) to cultivate into future Advocates/Investors.
Evolution of a Patron at Royal MTC
Royal MTC was heavily reliant on subscribers, but faced challenges acquiring new subscribers and converting subscribers to donors.
Results
Since 2011–12, Royal MTC has experienced:
- 125% growth in annual fund gifts
- 63% growth in annual fund revenue
- 59% growth in single ticket units
- 59% growth in single ticket revenue
These increases have resulted in a stronger base of Tryers (those who are new or less involved with an organization), a stronger upgrade movement of Tryers into Buyers (those who most often subscribe), and a movement for Buyers to migrate to Advocates (those who support the art through subscription and significant donation).
How They Did It
An organization-wide commitment to loyalty-building campaigns and measurements In 2012, TRG’s recommendations invited the Royal MTC leadership team to change their approach. It was an invitation to:
Broaden the view of organizational health beyond the metric of subscriber units
Radically change investments and campaign messages
Create reports that provided consistent and transparent measurements so campaigns could be improved and refined as each season progressed
In essence, the organization was invited to look at fiscal health through a more balanced, holistic approach to the loyalty groups of Tryers, Buyers, and Advocates. More energy was needed to cultivate Tryers and move them into Buyers, and to move Buyers into Advocates. TRG’s partnership not only brought recommendations for building loyalty through best practice campaign strategies, but also offered thought partnership, professional coaching, and tailored guidance to the Royal MTC team.
Royal MTC accepted the invitation with an integrated commitment. General Manager Camilla Holland led with unwavering focus. Artistic Director Steven Schipper joined alongside with a drum-beat persistence in asking the question “What can I do to help ensure these efforts are successful?” The marketing, development and patron services teams supported the growth with strong implementation and with honest dialogue. The Royal MTC board of directors sought this as an opportunity to change the way they focused on reporting and understanding the organization’s health. Together, they created an ensemble cast that ensured a steady foundation for Royal MTC’s growth.
“Before TRG began working with us, we were facing a rapidly changing environment with no tools to address the challenges. Their counsel has made our organization relentlessly focus on data driven decisions, so we are aligned in understanding today’s situation and aligned in direction for our future. It has empowered us to work together and be proactive, not reactive, about our patron base,” Camilla Holland, General Manager.
Annual fund: the major way to support Royal MTC
TRG recommended the endowment campaign to continue, but with a diminished public front and targeted to a more select group of potential donors. In contrast, TRG recommended that Royal MTC expand its annual fund messaging as the major way to support the theatre, and to keep the campaign elements consistent with best practice campaign strategies. This meant monthly renewal initiatives, bi-annual acquisition campaigns, bi-annual donor upgrade campaigns and integrated donation requests during subscription renewals. It also meant an investment in direct mail and telefunding, a re-evaluation of donor benefits, and a concerted plan to “tell our stories” in our campaign materials. The financial commitment to these campaigns increased as TRG counseled Royal MTC to invest more in order to grow, although it took a couple of years for Royal MTC to grow that investment.
“The strategies and tools really work for us. As of July 2015 (2 months into the 2016 financial year) we already had 20% more annual revenue than last year at this time and 10% more gifts. It was a great start to the year thanks to the direct donation ask during the subscription renewal campaign. We will continue to build on that success for the rest of the year,” Heidi Struck, Individual Giving Manager.
Single tickets: direct communication, easy to buy
For the single ticket campaign, TRG recommended a shift in resource allocation to support more direct communication with Royal MTC’s current and lapsed audience members. Direct mail became a standard component of the marketing mix for each production. And, Royal MTC implemented retention efforts that included post-show postcards to all new-to-file buyers. Undergirding all of this was a new scale-of-house and pricing plan that simplified the ticket buying experience, a key improvement as the old pricing chart was cumbersome and difficult to navigate. With all of these changes in campaign planning, implementation and monitoring, Royal MTC experienced substantial gains.
An example of Royal MTC’s post-show postcard, designed to retain new single ticket buyers.
“Direct mail is an expensive proposition in Canada. But it is the most effective way for us to build relationships with our patrons, so we are committed to the investment,” says Katie Inverarity, Director of Marketing & Communications.
Long-term commitment to ROI
Royal MTC continues, with TRG’s partnership, to learn what works and what doesn’t. The revenue results they’ve seen have provided growth capital to keep investing in the practices that work. For single tickets, they’re now able to begin leveraging blockbuster programming with best practice campaigns, with the end goal of growing revenue further. On the annual fund side, they’ve built a pipeline of lower level donors that can be upgraded in the coming years. “We’ve developed patience as we invest—knowing that results show in two ways, immediate ROI and then in multi-season ROI with the patron’s lifetime value. What worked three years ago when we started implementing best practices has been tailored to what works in this season thanks to data-driven decision making,” says Holland. “I am incredibly proud of our team and of our partnership with TRG,” says Steven Schipper, Artistic Director. “Our patrons are vital for our existence as artists, and these changes in the way we manage relationships are helping us create a more sustainable future.”
About Royal Manitoba Theatre Centre
The Royal Manitoba Theatre Centre was Canada’s first English-speaking regional theatre and, under founding Artistic Director John Hirsch, became a model for regional theatres throughout North America. Under Artistic Director Steven Schipper and General Manager Camilla Holland, Royal MTC now presents over 250 performances annually for more than 100,000 theatre-lovers. Royal MTC produces six plays at The John Hirsch Theatre at the Royal MTC Mainstage, four plays at The Tom Hendry Theatre at the Royal MTC Warehouse, as well as a Regional Tour, which annually travels to communities throughout Manitoba and north-western Ontario. Royal MTC has a comprehensive education and engagement program for young people. Royal MTC also produces the Master Playwright Festival and the Winnipeg Fringe Theatre Festival, North America’s second-largest Fringe Festival.
