Building Customer Loyalty v/Katy Raines


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Katy Raines (UK) presentasjon på Usus konferansen 11.mai

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Building Customer Loyalty v/Katy Raines

  1. 1. Katy RainesBuilding Customer Loyalty and Value<br />Christiansand, May 2011<br />
  2. 2. About me<br />Music Graduate, Cambridge University<br />Spent 15 years running Marketing departments in UK theatres<br />Consultant since 2004, specialising in Customer Loyalty and data-driven marketing<br />Clients include Royal Shakespeare Company, Opera North, The Lowry, Symphony Hall, Birmingham, Ulster Orchestra<br />
  3. 3. Building Customer Loyalty and Value<br />Why customer loyalty is important<br />How building customer loyalty can help your organisation<br />The 3 secrets of successful loyalty building<br />Examples from successful UK Arts organisations<br />NB – not about ‘new’ audiences<br />
  4. 4. And introducing the three key concepts for building loyalty:<br />Frequency<br />Retention<br />Customer Segmentation<br />
  5. 5. What’s happened to UK Arts funding?<br />Donations<br />Donations<br />Sponsorship<br />Sponsorship<br />Declining trends<br />Public Subsidy<br />Funding gaps<br />Public Subsidy<br />Earned income<br />Earned income<br />
  6. 6. A new model?<br />+<br />Donations<br />Sponsorship<br />Unlock hidden value in the customer base to increase donations and earned income?<br />Public Subsidy<br />+<br />Earned income<br />
  7. 7. A new model?<br />Donations<br />Retained customers<br />Frequent customers<br />Earned income<br />= More profitable customers<br />Increasing Customer Loyalty<br />= Increasing Customer Value<br />
  8. 8. The ‘Old’ Arts Marketing<br />Rewarded for obtaining ‘new audiences’ <br />UKGovernment (1997-2010) saw Arts as delivering on Social Exclusion agenda<br />Concentration on existing audiences seen as elitist<br />Arts Council / Public Subsidy targets skewed towards % of new attenders<br />
  9. 9. The effect of this on UK Arts Organisations<br />Research in England, 2005<br />40 Performing Arts Organisations using our Audience Loyalty HealthcheckTM (data analysis and interviews) 2005-2010 <br />
  10. 10. Key concept 1: Frequency<br />What % of your audience do you think are coming:<br /><ul><li>Once only in a year
  11. 11. More than twice per year
  12. 12. More than 8 times per year</li></li></ul><li>How are the Arts doing? - frequency<br />8+ times <br />per year<br />60%<br />5-7 times <br />per year<br />% of income in 1 year<br />2-4 times <br />per year<br />25%<br />Once<br />per year<br />15%<br />% of bookers in 1 year<br />
  13. 13. Customer Value and Lifetime<br />Customer Value<br /> = <br />total ticket spend <br />Per year<br />x <br />how many years?<br />
  14. 14. Key Concept 2: Retention<br />New audiences<br />Retained customers<br />Lost / lapsed customers<br />
  15. 15. How are the Arts Doing? - Retention<br />2009 audiences<br />% retained in 2010?<br /><ul><li>About half?
  16. 16. More than half?
  17. 17. Less than half?</li></li></ul><li>Poor retention<br />Current UK average around 30% retention <br />Losing over 2/3 audience annually<br />After 3 years this organisation will only have 3% of its audience left!<br />
  18. 18. My equation for Customer Value<br />Customer Value<br /> = <br />Income (total ticket spend) <br />x <br />Length of customer lifetime<br />Increasing any ONE of these will increase customer value. Increasing both will maximise it!<br />
  19. 19. The 3 secrets of successful loyalty building<br />?<br />
  20. 20. An aside – how UK organisations collect customer data<br />bookings<br />Organisation’s own Box Office system<br />Name & addresses (incl email)<br />Event purchased for<br />Amount paid<br />Time/date of purchase<br />Permission to contact again about similar events<br />
  21. 21. An aside – how UK organisations use customer data: the ‘classic’ marketing approach<br />Organisation’s own Box Office system<br />Customer contact data based on previous attendance and permissions to contact<br />Season brochure 3 times per year<br />‘Solus’ direct marketing<br />Monitor responses and amend communications<br />
  22. 22. The 3 secrets of building loyalty<br />A Big Welcome<br />Small steps not big ones<br />A dialogue that reflects their needs<br />
  23. 23. 1. A Big Welcome<br /><ul><li> ‘Morning after’ mailings</li></ul>- just to say welcome and thank you<br />- to push something similar<br /><ul><li>to ask opinions</li></ul>In many cases much more effective than waiting and sending the next season brochure<br />
  24. 24. Welsh National Opera<br />Large Scale Opera Company, based in Cardiff, Wales<br />Tour extensively in UK and abroad as well as at their home at the Wales Millennium Centre<br />Perform a mixture of popular and less well known operas each season<br />
  25. 25. La Boheme<br />Welsh National Opera<br />Popular opera which attracted high levels of new customers on previous tour (average 57%)<br />Typically low repeat attendance rates from these types of bookers<br />Aim to encourage first time bookers to book early for another production<br />If WNO made you cry last night……<br />Branded WNO tissues mailed the day of the performance so they landed the morning after<br />
  26. 26. Cost less to produce than what was previously being sent on a season basis<br />Tickets for both shows in all three theatres more than doubled in the four weeks following the campaign<br />Generated word of mouth and media coverage<br />Won two prestigious advertising industry awards<br />12% of first time customers re-booked<br />
  27. 27. 2. Small Steps not big ones<br />Frequency<br />Frequent attender<br />It is not going to be possible to move someone from the bottom of the ladder straight to the top – different tactics are needed for each ‘rung’ of the ladder<br />Regular attender<br />Irregular attender<br />New attender<br />Non attender<br />
  28. 28. 2. Small Steps not big ones<br />Frequency<br />Reward top customers – lunches etc.<br />Frequent attender<br />Flexible subscription packages, reward schemes<br />Regular attender<br />Linked offerings / packages, loyalty schemes, small reward for<br />Increase in commitment<br />Irregular attender<br />Welcome strategies, time limited promotions related to previous<br />attendance<br />New attender<br />Data capture, interest types, promotions around <br />accessible entry points, celebration packages<br />Non attender<br />
  29. 29. 3. A dialogue that reflects the needs of the audience<br />These people have different needs<br />From these people<br />% of bookers by frequency band<br />
  30. 30. Communications need to be targeted<br />The best approaches at building loyalty take into account:<br /><ul><li>Frequency
  31. 31. Artform likes/attendance</li></ul>= Key Concept 3: Customer Segmentation<br />Each segment receives DIFFERENT communications from the others according to their needs<br />
  32. 32. The Lowry, Manchester <br />Large Scale Regional Arts Centre, built in 2000<br />2 theatre spaces (1700 and 450 seats)<br />Visual Art Galleries<br />One of UK’s most successful venues<br />Visits from companies such as Opera North, Royal Shakespeare Company, Birmingham Royal Ballet, National Theatre, London West End Musicals, etc.<br />
  33. 33. The ‘Old’ approach<br /><ul><li>Season brochure mailed 3x per year to 65,000 past bookers
  34. 34. No segmentation – simply mailed the past 3 years’ worth
  35. 35. Cost £50,000 each time
  36. 36. = £150,000 each year
  37. 37. Return on Investment = 2.5:1</li></li></ul><li>The ‘New’ approach<br /><ul><li>New segments created, </li></ul>based on:<br /><ul><li>Frequency
  38. 38. Recency
  39. 39. Artform
  40. 40. Different communication methods tested and measured
  41. 41. Cost savings of £50,000
  42. 42. Return on investment overall doubled to 5:1</li></li></ul><li>The Building blocks of segmentation at the Lowry:<br />Frequency<br />Recency<br />Artform<br />High<br />Low<br />First timers<br />Current Attenders<br />Lapsed attenders<br />Classic Theatre<br />Dance<br />Family <br />Comedy / Music<br />A combination of these building blocks is used to create<br />Customer Mailing segments<br />High Frequency<br />Low Frequency<br />Classic Theatre<br />First timers<br />Family<br />Lapsed<br />Current<br />Dance<br />Comedy/Music<br />Once onlies<br />An appropriate communications approach is planned for each segment:<br />Modified communication methods<br />Main brochure<br />Mini brochure<br />Comedy / Music print<br />Monitoring and Evaluation<br />
  43. 43. The basic principles<br /><ul><li>Understand the data
  44. 44. Target people with the communications most appropriate to them (this may be 100% digital in some cases)
  45. 45. Measure the results
  46. 46. Ditch what isn’t working and keep what is
  47. 47. Refine Refine Refine
  48. 48. Looking at in more depth in WORKSHOP</li></li></ul><li>Ulster Orchestra, Belfast<br />‘Old’ model<br />Return on investment = 1.6:1<br />‘New model’<br />Cost was halved<br />Income was 3x<br />Return on Investment increased to 21:1<br />
  49. 49. In conclusion<br />Get geared up to RETAIN customers once they come through the door<br />Tried and tested methods exist for helping you maximise your chances of retaining audiences and developing their loyalty<br />
  50. 50. In conclusion<br />The keys to success are<br />Good data capture<br />Measuring the right things<br />Sensible Segmentation<br />Creative Communications appropriate to each segment<br />Testing / Refining<br />
  51. 51. Thank you!<br />Katy Raines<br />Partner, Indigo-Ltd<br /><br /><br />twitter: @katyraines<br />