Thursday, August 16, 2012

Marketing Insanity

“Insanity: doing the same thing over and over again and expecting different results.” --Albert Einstein
Data from a registration survey for our Christmas in July webinar recently reminded me how valid and valuable Mr. Einstein’s definition is.

We had asked everyone to compare their marketing budget for last season’s holiday events with the year before. Most (76%) said they had about same amount or less to spend on holiday events – generally a sure revenue producer for arts and entertainment organizations.

We also asked them to compare their revenue expectations for holiday’s breadwinning events. And that’s where it got interesting. The majority (52%) said that they were expected to bring in more revenue.

Expecting more from less.
Probing deeper, this survey showed that a lucky 37% had a higher budget to meet their increased revenue goal. That means 63% had to make a higher revenue goal with the same budget, or less! 

This expectation is both incongruous and commonly seen in our experience —and not just with marketing holiday events. Subscription acquisition efforts, annual fund campaigns, and membership drives fall into to this special category of insanity as staff teams are expected to “work smarter”, “make do”, and “be creative” – all code for “do more with less money”.

You can work smarter—to a point. You can target your marketing better. You can use direct channels more. You can trim print quantities and spot frequencies to save expenses without sacrificing effective contact. But there is a point where you can also mismatch investments with expected results, especially when you are counting on an event or campaign to be a big financial success. Perhaps some of that 63% have reached that point.

Mindfulness guides.
It does arts managers no good to base revenue budgets on what they want to sell instead of what has been historically possible with set resources. Every manager wants every event to sell-out and make plan. Wishing does not make it so and yet every organization has its own version of marketing insanity: expecting extraordinary results from investing the same amount and doing the same things.

The solution? Being mindful of budget contradictions like this and correcting them by investing in your guaranteed successes. I’ve written before on this blog about under-investing in blockbusters.

Investing in shows likely to succeed doesn’t mean you completely neglect your other events. This is the arts, not Sophie’s Choice, but our study is clear on this point: Money is only going to get you so far with some events. Every season, there are a few events that are just not going to attract a large audience or even as large an audience as you wish it would. As Rick Lester has said before on this blog “A performance of Beethoven's Symphony No. 9 will always outsell an All-Scriabin Festival.”

And that’s ok. It’s important to do the All-Scriabin Festival, or new works and programs inspired by your mission and artistic vision. For some of us, the All-Scriabin Festival or similarly obscure pieces/artists are why we got into the arts in the first place. An all-blockbuster season will not serve your organization, any more than throwing a disproportionate amount of money at mission-based programming will, as good as it might feel.

ROI Rules.
Here’s the reality, though: Arts managers often fall into the trap of regarding blockbuster productions or exhibits as easy money, thinking that they’ll sell no matter what kind of time and money is invested. They set up unrealistic (or dare I say, insane?) revenue expectations. And they leave on the table the sustaining revenue that allows the All-Scriabin Festival to happen.

It’s common sense: If you expect bigger earnings, give those events a bigger budget. Especially if it’s a perennial audience favorite like The Nutcracker or A Christmas Carol.

So, make the decision now to invest in productions in direct proportion to anticipated sales and stick with it. Adjust your budget now so that you won’t end up short of cash to market holiday shows or other blockbusters. And resist the temptation to use budget for blockbusters on productions that won’t significantly return your investments.

1 comment:

  1. I do agree that we need to be smart and continuosly observant on our marketing budget allocations. But I think the approach suggested might really problematic and dangerous.
    As starting point, let's agree we are talking about a major symphony orchestra (otherwise they would neither program Skrjabin festivals nor Beethoven IX). The bulk of the programming is then week-to-week subscription concerts and that's a huge machine to run. Some of these concerts might be blockbuster but many will be hard to sell. What to do?
    Create smart subscription packages. Sell the subscriptions on the blockbusters. Insert the "risky" concerts into the subscription and accept the fact that they wont sell as well.
    Then to marketing budget allocation: You can only reach the awareness of the market with let's say 5 campaigns each year. The subscription campaign (featuring block busters) is certainly one if not two of those campaigns. The Skrjabin Festival would most certainly be one because that will help brand your orchestra as the "real" thing. Then you might want to focus on some of your entry-level productions (holiday concerts, summer park concert) in order to reach totally new people (and earn huge amounts of money).
    And then more or less nothing in between (I see symphony after symphony explode there marketing budgets for weekly concerts and getting deeper and deeper into both financial and audience problems).
    I think the suggestion to move marketing money from risky productions to popular ones is extremely shortsighted because (1) the bulk of the productions are risky (2) these risky productions is the core of most symphonies and (3) these risky productions should be the core of the symphonies if we want to maintain long term credibility. Don't blame the arts when the problem is shortsighted and incompetent marketing!