The Background
York Theatre Royal’s work with TRG Arts began in part to solve what might be considered a “good problem”. Each year, as early as March, long lines would form at York Theatre Royal’s (YTR) box office, full of loyal patrons looking to secure their tickets to the Christmas pantomime production, some eight months away. The “good” in this scenario is obvious enough, but the “problem” part is that this loyalty and high demand was to be found at no other time throughout the year. This case study explores the journey of York Theatre Royal’s Revenue Accelerator partnership with TRG Arts as they reshaped their organization around a culture of data-driven decision making.
Tom Bird was the Chief Executive of YTR in the spring of 2018 when the work began. “I could see that TRG Arts’ council had worked everywhere from Honolulu to Sydney, so I trusted that it would work in York as well.” The trust that Tom described turned out to be the crucial piece of York’s success to follow.
The Work
The work focused on loyalty, perception of success and pricing, and required some revolutionary changes to be made that would be felt at all levels of the organization. To improve demand at the on-sale of every show, the first step York Theatre Royal needed to take was counterintuitive – offer fewer seats for sale. At TRG Arts, we refer to this as demand management, releasing new seating inventory as demand increases, and setting price in accordance with that demand. For long-term patrons or members, who have enjoyed sitting in a particular seat consistently, this can be a contentious change.
Tom remembered navigating this sensitive transition at YTR, “it’s a tough balance because often the people who are most perceptive to this type of change are your biggest advocates who may intimately know your venue’s operations. We managed these conversations by bringing them in on the vision of what we were creating and at times making small compromises, but never big compromises. TRG’s demand management strategy is not one that can be watered down.” The result of demand management is that audiences fill the hall more evenly, creating a higher perception of success with every show and an opportunity to maximize revenue as demand increases.
York Theatre Royal has a unique venue shape with multiple balconies. Previously, the upper tiers of seating were sold at the lowest ticket price point, which meant as the house filled the average ticket prices declined. Historical data illuminated which seats were truly the most highly sought after, allowing YTR to create informed demand-based pricing. As a result of implementing this new demand management strategy, York Theatre Royal’s customers began to see the benefit of booking earlier, at the on-sale of all shows, rather than waiting for discounts nearer to the event. Customer habits take time to develop and time to change, but incentivizing the behaviors you want, such as early booking and multi-buying, is a crucial to creating revenue resilience.
With the new scale plan in place, it was time to focus on inviting audiences. TRG Arts’ relationship focused counsel is built on loyalty, and segmenting your communications to get the right invitation to the right patron at the right time is the key. In the UK, this strategy requires data permissions to contact customers and welcome them with the right message. At the time, YTR only had roughly a quarter of the permissions needed to contact their full database this way. Acquiring the remaining permissions was a necessary step that took time, contributing to the results of the demand management work not being seen as quickly as Tom or TRG Arts had expected. There was a moment, Tom recalled, where trust in the full process was vital and it became necessary to stop picking and choosing which bits of TRG Arts’ council to take. “Instead of individuals making decisions based on their instinct or experience, the culture at York Theatre Royal became data driven,” Tom reflected, “when you wanted change, the expectation became that you would bring evidence. Data allowed for myth-busting and clearer decision making, but it took a lot of trust to give up that amount of agency. I had to focus the team on the little green shoots of evidence that this Revenue Accelerator journey was working.”
RFMG
Revenue Accelerator is the product most aligned with a new acronym being used in TRG Arts’ counsel – RFMG - recency, frequency, monetary investment, and growth. These customer metrics and concepts drive business stability because it is an evergreen truth that recent attendance, frequent attendance, increasing monetary investment and participation growth are the behaviors that define customer loyalty and develop recurring revenue streams. A common tactic to achieve these habits in North America is the subscription model, but in the UK, where venues do not commonly deploy subscription loyalty models, York Theatre Royal’s new approach to building frequency was revolutionary.
YTR began to incentivize frequency of attendance by rewarding multi-buyers, offering a substantial discount on the purchase of five shows. An even more attractive offer required membership and thus drove membership acquisition as well. At first glance, selling a consequential amounts of performance tickets at a discount might sounds like a bad idea, but this discount offer incentivized and built RFMG for York Theatre Royal. Participating customers attend a show (recency), attend more (frequently) because they commit to five shows, the purchase of multiple shows increases their total (monetary) investment, and their investment and participation (grows) by moving from single ticket purchasing to membership investment. The transformative work of Revenue Accelerator has enabled YTR to see strong demand at on sale for more than just their Christmas program and build a more resilient organization with a more loyal customer base that provides YTR with recurring revenue.
Data Informed Decision-Making
Seeing results took patience, trust, and steady leadership on the part of Tom Bird and the York Theatre Royal team. The data culture now in place at York Theatre Royal has grown them from a seasonal hotspot to a year-round theatre destination. The Revenue Accelerator journey, founded in the RFMG principles, has not only bolstered their ticket sales but has also cultivated a deeper sense of commitment from their patrons and created a culture of data informed decision-making.
