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TRG Webinar: The Loyalty Business Model


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While some debate the feasibility of the current arts business model and look to new audiences to fill the gap, the fact remains: only 1 out of 5 new patrons come back a second time. Our problem is …

While some debate the feasibility of the current arts business model and look to new audiences to fill the gap, the fact remains: only 1 out of 5 new patrons come back a second time. Our problem is not new audiences; it’s keeping the patrons we have--and increasing their loyalty to our organizations.

Loyalty can be achieved when a patrons’ passion for the arts is activated. Strategies that promote loyalty involve common-sense measures to draw in "newbies" and deepen relationships among first- and long-time patrons. Best practices focus on increasing patron satisfaction and, in turn, ongoing revenue. The 5th Avenue Theatre, in collaboration with TRG Arts, is building a wholly new model of audience engagement, centered on this view of patron loyalty.

5th Avenue Theatre’s Vice President of Marketing and Communications Sean Kelly and TRG’s Senior Consultant Laura Willumsen lead this webinar, which focuses on the benefits of viewing patron interactions through the lens of their lifetime loyalty to your organizations. You’ll learn:

● why loyalty is the only sustainable model for revenue growth
● what makes a targeted, purposeful loyalty strategy different from more general audience engagement programs
● about the specific techniques Kelly and Willumsen used to drive retention, as well as increase engagement and revenue at 5th Avenue Theatre

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  • 1. WebinarThe Loyalty Business Model: How to use passion for the arts  to drive revenue Keri Mesropov, VP of Client Services
  • 2. National Census of Arts and Culture Database Networks Nationwide D D D D D D
  • 3. WebinarThe Loyalty Business Model: How to use passion for the arts  to drive revenue
  • 4. What type of loyalty promotion efforts  does your organization currently conduct?90%80%70%60%50%40%30%20%10% 0%  Campaigns  Subscriber/  Donor Don’t know   None  Other (blank) to get first membership cultivation timers to retention events and come back programs activities not related to asking for a renewal
  • 5. How often does your organization  communicate or interact with subscribers,  donors, or members? 90%80%70%60%50%40%30%20%10% 0%  At  At the  At least  At least  At least Don’t   None  Other (blank) renewal opening of quarterly once once Know  time. a new via eNews annually annually season or or online via printed via an major outreach newsletter invited program or direct special mail not event related to ticket sales
  • 6. At your organization, do the marketing and  development teams have a joint plan for  patron communication? 2% 8% Yes 24% No formal plan, but they often collaborate. 21% No formal plan, but they occasionally collaborate. No, the teams rarely collaborate. N/A 45%
  • 7. Our presenters Sean Kelly Laura WillumsenVP of Marketing & Communications Senior Consultant 5th Avenue Theatre TRG Arts
  • 9. Patron LoyaltyWhat are you passionate about? SK
  • 10. Patron LoyaltyHow would we know? SK
  • 11. Patron LoyaltyHow do you measure passion at your organization? SK
  • 12. Patron LoyaltyWhy is passion important?It’s what keeps patrons coming back and encourages them to getmore involved.Or put another way: It brings in more $$$! SK
  • 13. Patron LoyaltyDriving revenue via loyalty is the only sustainablemodel for growth LW
  • 14. Patron LoyaltyThere are two key drivers of loyalty  Subscriptions  Donations These two behaviors interact far more than we might realize! LW
  • 15. PatronRenewing Subscribers Donate More Loyalty They bring in 90% of sub-donor revenue Their average gift is 100-172% higher than new subs New Subscribers 2010 & 2011 • % who donate - 20% • Average per household $113 • $69,000 Renew Subscribers 2010 & 2011 • % who donate - 35% • Average per household $258 • $705,500 LW
  • 16. PatronDonating Raises Subscription Renewal Rates Loyalty Renewal rates for subscribers who donate are 11-22% higher than non-donating subscribers Non-donors Renewing into 2011 & 2012 • 65% retention rate (4883) Donors Renewing into 2011 & 2012 • 86% retention rate (2913) LW
  • 17. Patron5th Avenue Subscriptions LoyaltyYear over year 2012 - 13 Subscription Revenue 9M Renewal Deadline 8.473 M 8M 7.233 M 7M 6M 5M 12-11 11-12 3.909 M 4M 10-11 3M 2M 1M M Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May SK
  • 18. Patron LoyaltyThe carrot and the stick  Carrot  Stick % of Total Packages Season 4 Show Full 2004/05 46% 34% 2011/12 14% 50%  7, 6 & 5 show packages account for 90% of 2011/12 revenue  31% of all subscribers upgraded in 2011/12 SK
  • 19. Super Advocates $40,000 Patron11% revenue & Advocates $4,000 Loyalty43% revenue Buyers $52745% revenue Tryers $48 Patron Loyalty Index: Analysis LW
  • 20. Patron LoyaltyWho are the 180? 4 Profiles of Patron Loyalty SK
  • 21. PatronSuper Advocate – Single Tickets Loyalty Steve Tenge#104   He’s been a subscriber since 1996  Has 4 season Subscriptions, all 7 shows  Attends most shows 15-20 times, via see it again $20 ticket offer  Making a $1,000 gift to the annual fund since 2009  His PLI is $31,014 since 2007 SK
  • 22. PatronSuper Advocate - Gala Attendee Loyalty  Martha Dawson and Ron Corbell#31  Subscribers since ’04  Make an annual fund contribution of $1,000  Attend the gala each year and since 2007 have spent nearly $40,000  Their PLI is $90,205 since 2007 SK
  • 23. PatronSuper Advocate -Non-Board Major Donor Loyalty  Beth and Buzz Porter#17  They have been subs since 1999  Started giving $1,000 in ‘02  Now give an annual gift of $10,000 and attend the gala most years  Their PLI score is $151,469 since 2007 SK
  • 24. PatronSuper Advocate - Group Leader Loyalty Sharon Ahlen#5   Subscriber since 1990  Make an annual fund gift of $1,500  Purchases nearly $55,000 in subs each year for groups  Her PLI score is $441,966 since 2007 SK
  • 25. PatronWho’s Paying the Bills? Loyalty100 patrons over two years Renewing Subscriber/Donors Renewing • $101,604 Subscribers • $1,016 • $60,621 New • $606 Subscribers • $18,667 • $187 Single Ticket Buyers • $5,298 • $53 LW
  • 26. Patron LoyaltyLoyalty is building relationshipsPatrons respond because they already care.If we don’t invite them, we are literally ignoring them! LW
  • 27. PatronThe saddest words in the English language… Loyalty“What party?” MARKETING & DEVELOPMENT SK
  • 28. Patron LoyaltyWhat is a Patron’s first experience with the theatre? Handing their ticket to the usherWhy is that important?What is a Patron’s first experience with the theatre?Because there is an inherent promise in that interaction. SK
  • 29. Patron LoyaltyWho is responsible for building relationships(be specific)? The Director of Development SK
  • 30. PatronThe Patron Experience Loyalty Front of House FRONT OF HOUSE The Show! Customer Marketing Sales & & Devo Services SK
  • 31. PatronThe Patron Experience Loyalty Front of House FRONT OF HOUSE The Show! Customer Marketing Sales & & Devo Services SK
  • 32. Patron The Patron Experience Loyalty JOB: Acknowledge relationship Customer Make buying easy Sales & Address logistics Services Affirm order; upgrade PRE-SHOW JOB: MARKETING & FRONT OFGet theDEVELOPMENT phone to ring HOUSE Marketing Front of & Devo House POST-SHOW JOB: JOB:Cultivate & Upgrade Welcome patrons as guests & friends Set the stage for an The Show! excellent artistic JOB: Put on a terrific experience performance! SK
  • 33. PatronEvery Interaction Counts Loyalty MARKETING & Enhances DEVELOPMENT Detracts SK
  • 34. Patron Loyalty Implementation Timeline To ensure a sustainable transition to the new patron loyalty model. Jan Feb Mar Apr May June July Aug Sep Staff 20 Most Advocate Front of 1st GiftRollout Likely Concierge House Experience Integrated 180 Gala Customer Subs + Give Points Service Campaign Initiative SK
  • 35. PatronGetting Started LoyaltyChoose from the menu! Carrot Stick Upgrade Retain Free Parking Minimum Ask for a gift Calculate total with full season package size to with every subs revenue for see #1 show piece each patron Free Wine with Discounted “Super Who is your blind faith parking for Subscriber” “180” renewal partial package Free Chocolate $2 surcharge for 6 week Lengthen your with renewal exchanges with promotional subs campaign partial season cadence pre-seat release SK
  • 36. WebinarWhat’s new? What’s next?
  • 37. Webinar Thank you!If you have further questions, email