Getting the Most Out of Gen Y

This week, the TRG team is contributing to the Arts Marketing Blog Salon on Americans for the Arts' ARTSblog. This article by Amelia was originally posted as part of the salon, which previews the National Arts Marketing Project (NAMP) Conference in November.

Photo by David Wellbeloved

For decades, the arts industry has chased new audiences, especially younger audiences. Today, that chase is directed at the largest population under 30 years old in human history.  It’s little wonder that Gen Y (born 1981 – 2001) is a hot topic for arts marketers.
 
As a data-informed member of Gen Y, here’s a take on my generation of arts consumers.

We curate our lives. For as long as we’ve been consumers, we have always had access to Google and Amazon. Search is our way of finding out anything and everything we want to know. We are the generation of the long-tail. This means we have had access to more variety of art, music, performances, and consumer products than any other generation in history.

What will your audience look like in 2020?

This week, TRG's own Will Lester and Amelia Northrup are contributing to the Arts Marketing Blog Salon on Americans for the Arts' ARTSblog. This article by Will was originally posted as part of the salon, which previews the National Arts Marketing Project (NAMP) Conference in November.

One of the prompt questions for this blog salon was “What research is affecting your marketing and fundraising strategies?” TRG’s research on arts patrons by generation has really given me perspective on where the arts are today and what we need to plan for long-term. Right now—even amidst the recession, organizational bankruptcies and funding pullbacks, today may be the “good old days” for arts marketing.

There are four generations of arts buyers in the market right now. Each cohort is born roughly between these dates:

• Traditionalists, born before 1945
• Baby Boomers, born between 1946 and 1964
• Generation X, born between 1964 and 1981
• Generation Y, born between 1982 and 1995

Among many arts and cultural organizations it is commonly observed that a large proportion of their audiences, patrons, and members become more loyal, active, and valuable around a certain age. Usually, this occurs when patrons’ kids leave the house. They have more free time and reach a stage in life where they have access to more disposable income. As you might imagine, today is the prime time for serving Boomers, a large pool of 60 million.

Young Friends, Lifelong Patrons?

To hear some of my fellow Boomers talk, getting young adults engaged in arts and culture is an urgent problem that requires a big solution.

We beg to differ.

Consumer research and our own studies on generational differences in patron behavior point to huge opportunities, not problems. What we are finding are some eye-opening considerations that reiterate an age-old best practice. Assume nothing.

Without the facts about who is in your audience or among your donors, it’s easy to guess wrong – especially when it comes to developing young patrons. As an age cohort, the under-30 population we’re calling Gen Y is replacing the Boomers as the largest generation in American consumer history. The spending habits of this young adult group are causing many industries to sit up and take notice.

So, consider a key finding of our pilot generational study. We examined donor transactions of some 51,300 individual donors who gave $75.6 million to the organizations in our study group during the 2009-10 season. We reported on this study at the March Arts Reach conference and our webinar last week called Developing the Generations.

Donors under age 30, while small in number, gave more generously per household than patrons who were a generation older. Gen Y represented only 2% of donor households and 1% of contributed revenue in our pilot study group. But, the average size of their gift was almost $900. Among the next older generation of donors – Gen X patrons who are 30 to mid-forties -- the average household gift was $150 less -- $747.

Older donors are undeniably important. In our pilot study, they gave 91% of the revenue and pushed the median household gift to just above $1,200. For the next decade or so, Baby Boomers and their elders will sustain arts and culture in America. Then what? That is the question.

It is the presence now and potential lifetime value of younger donors that we see as significant and potentially transformational – IF the distinct set of generational attributes of younger patrons is recognized. Respect under-30 patrons’ huge numbers, their unsurpassed tech savvy and ability to take in vast amounts of information. Accept their expectation of telling us what they think, what they want and when, where, and how they want it!

Realize too that the other group of young patrons, Gen X, deserves attention. In the U.S. population, their numbers are smaller than Gen Y and the Boomers. In our study, Gen X represented 15% of all donors. They give, and their approach to giving is very different. Donors of Gen X are more individualistic, highly skeptical and hard-to-sell but can be deeply loyal once sold. Young Friends groups comprised of Gen Xers will require a different set of criteria than will programs for under-30 prospects.

The bottom line is this: Getting the facts and getting to know your patron population is the only way to assure the success of “Young Friends” or other programs designed to attract specific patron age groups.

Database and transactional analysis can describe the size and scope of opportunity each generation represents for your organization. Analysis also can identify Young Friends prospects. Find out who they are and how you can cultivate and maintain a relationship with them on their terms.

The upside of making investments in these programs is that today’s Young Friends have three or more decades of patronage ahead of them. That is a staggering amount of potentially sustaining loyalty, patronage, and revenue.

Want to join an upcoming webinar on this subject? Leave a comment or contact us.

Today may be the good old days for arts marketing!

I was recently asked by Chad Bauman, the bright young communications director of Arena Stage (Washington, DC), to offer my thoughts about the most significant marketing challenge facing arts organizations in the new decade. He posted a portion of my thoughts on his blog (http://arts-marketing.blogspot.com/) last month. My complete remarks are posted below.

Today may be the good old days for arts marketing.

Know that I’m not a fearful person. In fact, I’m typically quite optimistic about my future, the future of my family, my business and my country. So why do I hesitate when considering the year 2020 and the future of arts and cultural in America? My problem, I think, is found in the simple arithmetic of life. I fear that some very good organizations may be running against a tide of numbers that may ultimately prove overwhelming.

Three decades of selling tickets, raising money and balancing unbalance-able budgets frame this view. But it’s what we see in TRG’s cumulative data on arts and culture buyers that is alarming for arts managers everywhere.

As a young orchestra marketing director thirty years ago, a high proportion of my subscribers were serious avocational musicians. They studied seriously. Many performed chamber music in their homes. As this generation departed from the scene, marketers of the day successfully made a clever transition of message. The new proposition was that current study or performance of the art was no longer a prerequisite. Instead, study and performance as a child was all that was required. To “Subscribe Today,” one could find happiness as a spectator. Participation no longer mattered.

This strategy worked. Across the country we added hundreds of thousands of new subscribers and single ticket buyers. Admittedly, these new folks no longer wanted to attend 24 Saturday night performances. Simple, we said. We’ll sell you twelve performances – or nine. Or six. And it worked. Unfortunately, another force was in play. Demographics.

As theatre, opera, orchestra and ballet companies replaced one generation with another, the new target market came of age -- Baby Boomers. Today marks the best of times for serving Boomers. Right now the target pool is 60 million of us who were born between 1946 and 1964. Any current marketing or fundraising effort need not be as efficient as those programs implemented twenty years ago. There are so many people who fit the current target, one can miss the bulls eye and still be okay.

What happens in 2020? The members of Gen X finally begin reaching the target life stage. Even if we forget the cultural divide that resulted from the demise of public arts education when this group passed through our schools, the arithmetic boils down to one number: 20 Million. That’s how many Americans were born between 1964 and 1981 -- 60 million Boomers will be replaced by 20 million Gen X’ers.

The math is simple - and it doesn’t work. Everything an arts organization does well today must be three times more efficient in 2020 if they are to maintain today’s level of success.

We could, of course, wait and see what happens when Gen Y (born between 1982 and 1995) replaces Gen X. These so-called Echo Boomers are almost as big a group as its parent generation. But our data suggests waiting is a high-risk option.

Is there a solution? Yes, but it won’t be easy. The rate of audience attrition today is unacceptably high. Nationally, TRG analysis shows that 80% of all new single ticket buyers never return for a second visit. Unchecked, attrition will continue depressing audience growth and feeding decline. Smart organizations, however, won’t ignore the danger signs or wait for the generational echo. By 2020, the best among us will have long since stopped over-prospecting for new stealth patrons and will retain almost everyone they touch.