There’s an interesting post from Jill Robinson at the TRGArts blog (Robinson is President & CEO of that consulting firm) where she examines the value of traditional subscriptions within the current arts marketing environment. The post presents some case study data to support the continued viability of that revenue stream but it never ceases to amaze me how the field gets tied into knots over this topic.
Since the downturn, we’ve seen two strong camps emerge in this discussion; “subscriptions are dead” or “double down.” For frame of reference, when we use the term subscriptions here, we’re describing the model where a ticket buyer purchases a package of event tickets to multiple performances spread over the course of a season in a single transaction.
A Quick Primer
For those who are new to this topic, subscriptions have been a mainstay of earned income for decades thanks to generating a large intake of cash in a comparatively short period of time combined with a much higher rate of marketing performance, which is marketing jargon for how much money for each ticket sale is left over after deducting marketing expenses.
Subscriptions also provide a higher level of guaranteed income thanks to no-refund and donate-return policies for any unused tickets. So there’s plenty to love in this model but the problem is that ticket buyer habits have changed, especially among Millennial buyers; many no longer wish to commit to multiple fixed dates and don’t respond as well to the traditional sales approach. As a result, subscription sales have dropped off thereby producing a negative twofer for arts groups in the form of lower revenue combined with higher marketing costs to sell single tickets.
As such, it isn’t difficult to see why this issue is hashed out on such “good vs. bad” terms.
The Real Problem
Robinson’s article approaches the topic from many of the traditional perspectives that define these conversations; likewise, she highlights what is perhaps the most crucial element: talking about the underlying value of loyalty associated to traditional subscription ticket buyers.
Robinson examines issues related to why ticket buyers do and don’t subscribe but that’s where things stray off path.
Perhaps unsurprisingly, each arts org needs to begin evolving into a new cash flow model which spreads revenue out over the course of the full season while simultaneously capitalizing on lower marketing costs to convert those single ticket buyers into a statistically reliable patron group, all of which is just more marketing jargon for developing loyal patrons.
But even if an arts org is committed to refining these methods, there’s a giant roadblock preventing them from developing similar levels of reliable single ticket buyer loyalty similar to what is experienced via traditional subscribers: Box Office/Ticketing and Customer Relationship Management (CRM) vendors.
A Problem That Is Waiting To Be Solved
Currently, ticketing providers have focused on developing the capacity to sell traditional subscriptions (which includes flex subscriptions) alongside single tickets. Unfortunately, there is little development geared toward making it possible for arts groups to easily design and implement the sort of loyalty and reward programs consumers are growing increasingly accustomed to expecting from businesses that provide online transactional relationships (more jargon that just means selling and buying stuff online).
The key here is a level of automation that allows arts orgs to track buying habits, analyze patron data, and provide benefits to ticket buyers that cross various thresholds. There’s nothing new about this technology, it’s been around for some time and was pioneered by large online retailers like Amazon.com and airline reward programs.
The process has inherent benefits in the form of custom tailored patron communication to court patrons without simultaneously overwhelming them but in a very different fashion than traditional subscriptions or single ticket efforts.
Robinson is spot on when she purports the value of loyalty among ticket buyers and on that point, she concludes her post with some excellent sentiments.
Each loyalty step should be rewarded, organizationally. What we should be rewarding is MORE. The more a patron invests, the more access and benefits they should get.
But the discussion here needs to evolve past the value of traditional ticket buying approaches to accomplish those goals and acknowledge the lack of capacity to do anything else.
Until that changes, everything else is a choreographed effort to rearrange the deck chairs on the Titanic.
In order to facilitate change, arts orgs are going to have to take a very strong position on the need for incorporating loyalty/reward capacity into the online ticket buying process. They will need to make their respective providers aware of this need and drive them toward those directions.
Having said that, and functioning as an arts org focused Web provider, I can say that the process will be neither simple nor comparatively inexpensive. This level of sophistication takes time to development and has to keep all of the current forms of ticket buying options included in the mix so groups can transition as needed based on patron buying habits. That means increased legacy and support costs, all of which ultimately get passed along to users.
Fortunately, none of that rises to the level of becoming a showstopper, but it is worth acknowledging.
Next, the topic of technical limitations needs to become injected into existing traditional subscription conversations.
In the end, process matters and it is all too easy to get wrapped up in the warm blanket of elements that are familiar and comfy; in spite of this, we need to move beyond the conceptual level and realize that the practical aspects related to implementation are artificially limiting not only the discussion, but preventing needed answers.