Temporary Audiences

A couple of weeks ago, TRG Arts unveiled the latest addition to our Data Lab arsenal of analytics tools. Designed to be a quick aid for arts administrators (both marketers and development officers), TRG’s new “Key Metrics” report provides a powerful summary of several data points that our consultants observe are good indicators of organizational health, namely new-to-file patronage, patronage loss (attrition), and multi-buying patronage. By leveraging our national data source in an automated analytical process, Key Metrics provides individual organizations with a low-cost snapshot of their situation alongside a baseline of national data from which to compare “what is normal” among arts organizations.

To provide the industry baseline, Data Lab selected 113 clients for what we called the “analysis group”. These are organizations from each major performing arts discipline: dance, orchestra, opera and theatre. They each have patron data that is extensive, deep in history, and unusually clean. Together, 113 organizations provided 5.3 million patron households for the study’s analysis group. To execute the analysis, we compiled all household transactions into a single aggregated database that was normalized for individual organization data collection, storage and segmentation quirks. We then looked for patterns of patron behavior that can be measured by purchases or donor transactions.

As the first findings rolled out, the significance of patron loss through attrition was clear. Attrition is an issue that has consumed a great deal of TRG research time since our first study with the Dallas Symphony Orchestra nearly a decade ago. Since then, further TRG studies – and the Oliver Wyman Study commissioned by the League of American Orchestras (under the stewardship of TRG’s long time buddy, Jack McAuliffe) a couple of years ago – have, without fail, raised concerns about the high turnover rates of arts audiences.

The conclusions from our initial work with 113 TRG client organizations confirm our earlier findings. Despite the eternal instinct to lay the arts community problem on a lack of “new audiences,” this is simply not the case. The number of new people entering the arts ecosystem each year is enormous. During our five year study period, nearly two-thirds of all households in the combined database (63%, or slightly more than 3 million of the 5 million households) were first time buyers. This fact endorses TRG’s oft expressed slogan in conference speeches and presentations: arts organizations must stop over-prospecting and under-retaining patrons – especially new patrons. The resources consumed to continually recruit new people to fill our theaters and concert halls are simply unsustainable.

For some time, I have believed that the attrition number for new buyers (households) has been slightly above 80%, or four out of five. All of our early work in the orchestra field confirmed that ratio. When examining this new and larger data pool, the numbers improve a bit. Across all artistic genres, average annual attrition is only 68%. Over the five year study period, aggregate attrition is 73%; meaning that three out of every four new buyers attend once and never return for a second visit. While this is better than 80%, it seems small comfort.

A side note: As I have noted in an earlier blog, one may quibble with our specific interpretations, but the data simply is the data. We either find a data point of activity, or we don’t. Over time, the size of this analysis pool will grow and the list of issues we are reviewing will become more robust. Over the next few months, I plan to share more of our findings in this blog space.

The bottom line is this. In a data set of 5.3 million total households, 3.8 million stopped buying tickets during the five years we examined. They stopped donating. They don’t subscribe. They simply stopped. How can any industry survive when spending so much money recruiting new customers only to see them walk away in such huge number so quickly? Too many organizations are actively engaged in marketing efforts that seek temporary audiences – those that will be here tonight and then never seen again.

Is there any good news to be found in these findings? I think so. When looking at new first time buyers (and most arrive using a single ticket), the effort to quickly encourage a return visit is well worth the effort. The new buyer who is successfully persuaded to make a return visit within a year of their first visit is twice as likely to remain in the family over the long term. These are odds that any savvy administrator can make money on – now and into the future.

So – is your organization obsessed with finding a new audience? You know -- that magic bullet target market segment that might offer huge response rates and recast the nature of your current audience into a younger, hipper and more diverse group of people? In other words, are you an over-prospecter?

Or, are you obsessive about encouraging a deeper relationship with every patron – regardless of their position on the loyalty continuum? Are your offers and “asks” driven by a data-driven (and provable) understanding of what that “next right offer” is likely to be for every patron? Is your prospecting campaign focused on the reengagement of lapsed buyers and donors?

If one examines the behaviors of millions of patrons of arts and culture, the answer becomes difficult to avoid. Over-prospecting for new audiences is not a game that anyone can win. As the old punch line goes, you “can’t make it up on volume.”

Want your own copy of TRG’s Key Metrics report for your organization, contact us for details.