[This was originally published earlier this week as Patron Technology's "end of the year" newsletter -- I'm reposting it here in case you missed it.]
Each year at this time, I take the opportunity to reflect on arts marketing on the Internet, the work we've done here at Patron Technology, and the work we will be doing next year. As in past years, I'd like to use this as an opportunity to give my perspective on the direction that technology for arts and cultural organizations is heading.
I'm going to talk briefly about what's happened in the last year, but spend most of the time focusing on the future. One note before I get started: It’s hard to ignore the elephant in the room that arrived last week in the form of a report from the NEA about how the arts audience is shrinking. This is not news to anyone in the field, but it should spark an active debate on the topic, and will certainly put more pressure on those running arts organizations.The Social Web Meets Main Street
My quick summary of what's happened this year: The “socialization” of the Web has begun to really stick.
Twitter and Facebook are not new phenomena—Facebook started up in 2004 and Twitter celebrated its third year in 2009. This was the year, however, that the consciousness of arts organizations woke up to the possibilities of how these new media types could work to their advantage. As you know, we've done several workshops as well as 12 live webinars and multiple articles on this subject. We are still amazed that Michelle Paul’s nine Facebook webinars this year drew a total of over 1,500 registrants!
The social Web is here to stay, and those organizations that embrace it, innovate with it, and use it wisely will reap benefits. This is definitely not a fad—it's a new way of communicating.
Just take a look at how eMarketer projects Twitter’s growth:
Now, if you're not totally
convinced, let me present the following undisputed fact:
Notwithstanding how effective your direct mail or other marketing
efforts are, the hands-down winner for driving people to attend and/or
participate in things arts and cultural has been and continues to be word of mouth.
Word
of mouth wins by an order of magnitude. Someone telling their friend
about what you’re doing is far more effective than any statement you
can make on your own behalf. It stands to reason, then, that if social
media is nothing more than word of mouth on steroids, and if you can
harness discussions that other people are having about you, and can
both incite and participate in them, you can finally begin to use word
of mouth as a true marketing tactic.
I am always fascinated when I read stories in The New York Times about a Broadway show that is about to close. Inevitably, the writer will make a reference to the fact that the show “did not find its audience.” That is merely code for the fact that despite a huge marketing effort, people didn't talk to their friends about the show, and the word of mouth machine never put the show into orbit where it could become a commercial success. It's commonly accepted that good word of mouth is the sine qua non of arts marketing.
That's the key reason why I believe the social Web is
so amazingly powerful and so incredibly important for arts
organizations to embrace and to utilize. No, there are no rules of the
road that have been tested for years. And no, there are no hard and
fast ROI calculations that anyone has been able to come up with that
make sense yet. It's just too early.
But, like
everything else online, rewards come soonest to those who take chances
and innovate. In the early years of our business, clients used to tell
us that they would let their interns and volunteers do their e-mail
marketing. After all, wouldn’t it be best to have a 25-year-old who
“understood technology” handle it? Well, it's now commonly accepted
that e-mail marketing should not be the realm of the volunteer or intern, because it's too important a mouthpiece to the public.
We are seeing that move all over again with Facebook
and Twitter. Everyone seems to be lining up their twentysomething staff
member or intern and telling them, “You deal with Twitter. I don't
understand it, and I don’t have time for it.” In my view, they do this
at their peril. The fact is that Twitter and Facebook postings are
probably more powerful than print or direct mail because they live on
forever and spread virally through the Internet. And now that Google
and Bing are beginning to provide real-time search results, these
social media postings may soon be the freshest information out there
about your organization.
So if you're going to
“outsource” any of your marketing efforts, I wouldn't outsource social
media. This needs to be a medium that you understand and pay attention
to, in just the same way you do with your Web site or e-mail campaigns.
E-mail Still Wins
I was recently on a panel sponsored by the innovative marketing firm Situation Interactive, along with two other panelists: forward-thinking Broadway producer Ken Davenport (Altar Boyz, Oleanna, The Awesome 80s Prom) and Larry Goldman, a sports marketing consultant most recently with the NY Islanders. It was the most stimulating panel that I’ve been on in recent memory, and the room was engaged with energy and interest. At the end of the session, Erik Gensler of Capacity Interactive, the moderator, closed with a pointed question to each of the panelists asking us to give one idea that Broadway producers and arts managers should use to improve their business.
My
response was the same as it has always been: The most important thing
you can do for your digital marketing efforts is to build the size of
your e-mail list. I suggested that everyone make a goal next year of
doubling the size of their list. Love Your Subscribers AND Your Single-Ticket Buyers
Back in the 1960s, Danny Newman wrote a book called Subscribe Now,
often considered to be the bible for arts marketers. In it, in no
uncertain terms, he described the long-term subscriber as the gold
standard relationship that your organization should aim to develop with
a patron. His view of the single-ticket buyer was that that person was
a noncommittal slug, a creature to be despised.
It’s easy to understand the benefits of subscriptions from the perspective of an arts organization. After all, you're getting a lot of money up front from your patrons, which helps your own cash flow, and you minimize unpredictability about what your season is likely to look like. But subscriptions ultimately should not be about you—they are about your patron. And not all patrons are created equal and not all patrons need or want subscriptions.
Fundamentally, I believe subscriptions are more about personality than anything else. A subscription satisfies a particular personality type of a consumer. There are people out there who will always subscribe because it makes them feel complete and organized. But there are others who will never be subscribers, not because they don’t like the work you do but because their lifestyle simply doesn't work that way, or they are unable to commit that far in advance. And, of course, there are also those who won’t subscribe because your own policies are so difficult that when they subscribe and then want to exchange tickets, you don’t make it easy for them to do so, and so the “benefits” of subscriptions don’t matter to them.
(As an aside: I'm not going to renew one of my subscriptions for a theatre company here in New York City because I've been unable to return or exchange my tickets twice this season. Why? Because they require you to physically go to the box office between the hours of 11 and 6 if you want to exchange any sooner than 48 hours before a show. You can’t do it online—the only way you can manage a ticket exchange is to go there in person, and for me that's enough of a hassle that my subscription consequently offers me no benefit at all. Now, if I were running that organization, I would make a deal with a messenger service that could arrive at my patrons’ office and exchange their tickets for a charge of $15. But I digress.)
The point is that subscriptions are perfect for people who have a plan-ahead personality, are price sensitive, and/or for whom the benefits of a subscription matter a lot. I reject the Danny Newman notion that somebody who buys, say, three tickets to the symphony on a single ticket basis should be treated differently (i.e., less well) than the person that subscribes for three concerts in a “make your own subscription” series.
Yet that’s exactly the approach most organizations take, and I have a theory about it. Let’s assume that some organizations would like to treat those single-ticket buyers better—but they simply don’t have access to technology that can enable them to care of those multi-single buyers in the same way that they take care of their subscribers. Well, that’s all about to change.
The Future is CRM
Let’s
turn to the year ahead, and focus on new technology which some of you
may be familiar with, commonly known in the corporate world as CRM,
which stands for “customer relationship management.” You'll be hearing
more about this from me in the next year because I believe it’s the
“next big thing” in the arts & cultural business.
Large Fortune 500 companies have been using CRM for the last decade, and those that use it effectively have transformed their businesses. CRM systems represent the ultimate simplification in managing your historical and current data. These systems integrate all of your organization’s information and databases into a single, seamless unit.
Once you have all your patron data in a single database, and that information is accessible online to everyone in your organization in real time, your organization can make dramatic improvements in efficiency, customer service, and marketing efforts. CRM is not simply a fancy name for a new ticketing system—it’s an entirely new way of managing all of the data for your customers. (I write about this with some energy because, as some of you know, we have been working on a CRM initiative for the past two years—you'll be hearing a lot more about it from us in the coming months.)
Why is CRM is so important now? The number of “touch points” with your customers is increasing, not decreasing. In the old days, you used to send out messages in a one-way manner—direct mail, newspaper, and telemarketing. You had a limited number of opportunities to connect with your patrons. But today, we can reach people in many more ways: through social media sites such as Twitter and Facebook, via e-mail campaigns and individual e-mails, and also on our own Web sites. Our customers are more accessible to us than they ever were before, and they are more easily able to reach us as well. It’s now incumbent upon us to manage those relationships in the most efficient and effective way. Customers expect it!
This is where CRM is going to make a huge difference. With CRM, you can track all of our customers in the same way, and offer preferred treatment to the best customers, no matter how or when they buy from you. (That’s why every time I rent from Hertz, they give me an automatic upgrade at the counter—they know I’m a frequent renter because I’m identified in their CRM system as such.)
CRM is a new paradigm for running your organization, and in the next three to five years, a complete transformation of the technology for back-office operations for arts and cultural organizations will emerge. There's a generation of CRM technology in the offing which will be several magnitudes less expensive and several magnitudes more powerful than anything arts managers have to work with now.
You will see new products and services; new competitors; alternative ways of developing technology that will knock your socks off. In many ways I think the golden age of running a non-profit cultural organization is just now starting. In the foreseeable future, those competent managers who want to run an efficient and smart operation will now have a fighting chance of running their organizations the way they know they should be run, but could never before afford.
Next year will be the
beginning of a new standard of technology. The era of CRM is coming and
I’m betting it’s going to be quite exciting.
Weathering the Bad Economy
In
closing, I want to comment about the economy. Last year at this time,
we all were worried about the arts & cultural industry, and a lot
of fears were justified. What is amazing to me is that a year later the
vast majority of small and medium-size organizations (which make up the
bulk of our client base) seem to have made it through by sheer grit,
smarts, and hard work.
Sure, many have cut budgets and are doing things more
efficiently than before. And they are surviving. Larger organizations
appear to have been harder hit. When corporate funding gets cut by
$250K, that’s hard money to replace.
However, when I
look at the vast majority of arts and cultural organizations across the
country, I see hard-working and committed managers weathering the storm
and persevering to continue to do what they are so very passionate
about.
To you, I tip my hat. I know I speak on behalf of our entire staff—a
staff filled with technically savvy folks who also happen to be theatre
buffs, singers, actors, musicians, playwrights, composers, directors—arts lovers—in
saying that we’re trying our hardest to do our part to help you attain
your goals, and we are in constant admiration of what you do every
day.
Have a wonderful and happy new year.
If you like to look over the shoulder of the corporate market to get a sense of how to allocate scarce marketing dollars (as I do), today's E-marketer provides a pretty good window into what business executives are planning in the coming year.
Needless to say, I agree with it!
This week, my favorite site eMarketer seems to be doing nothing but delivering holiday gifts. The most recent one below says in a simple chart what we all know to be the truth about e-mail marketing: Relevance is king.
If you mail a message with content that's relevant to your recipient, they will open and read it, and some percentage will take action. But if you mail an irrelevant or boring message, you're doing damage to your e-mail list by wearing it out.
E-mail marketing turns out to be mostly a creative editorial endeavor. In the end, it's not about the date you send it, or the time of day, or how many images you include, or the font size. It's simply about what you say and to whom.
That's why my mantra for 2010 is going to be audience segmentation. If you "blast" out the same message to everyone and assume it will be relevant to all, your message is probably too generic.
(I'll repeat a comment I made in a blog post a few weeks ago. The Obama campaign e-mail list had over 300 segments based on all sort of things like state, city, and job titles.)
The chart tells the story better than words.
We've been in the e-mail business for eight years now, and for eight years I've been saying that even the "very old" arts audience is indeed online, and actively so. "E-mail isn't just for younger audiences" is a mantra I wish more boards would pay attention to, and this study shows some definitive evidence of what seniors (65+) do online.
What do you think their #1 activity is?
Open rates are the industry standard way to measure of how well an e-mail campaign did in attracting readers. (I happen to think they are actually a pretty crude measure, but I'll get to that in a minute.)
The good thing about open rates is that that they are monitored closely across the digital universe, and the graph above recently published by Epsilon is fascinating. For instance, the average open rate under "consumer publishing" of 15% is among the lowest here, which says a lot about the ability (or lack thereof) of traditional publishers to engage with readers online.
The Epsilon report doesn't track arts industry e-mail open rates, but we do. We maintain an ongoing benchmark across all our 1,600+ clients, and the average open rate for the last six months is 20.1%. That's a lot better than the 17.5% generic 'non-profit" benchmark.
That said, open rates only tell a tiny part of the story. A more significant measure is what percentage of your e-mail list opens your e-mails consistently, what percentage open sometimes, and how many don't open at all. We've done some research into this and determined that approximately 2/3 of any list will open an e-mail at least once in a six month period. I've long been obsessed with this "cumulative average open rate" but it isn't a number that anyone else tracks.
The point of all this is that tracking your e-mail campaigns and targeting your e-mails based on the interest/engagement level of your recipients (behavioral targeting) is smart, and something that sophisticated e-mail marketers are doing, and you should be thinking about doing it too. When you target your content based on interest level, you get better results - simple as that.
