Speakers: Rick Lester, chief executive officer, TRG/Target Resource Group; Jill Robinson, president, TRG/Target Resource Group
Notes:
-A recession is defined by a decline in Gross Domestic Product for two quarters in a row. GDP = Consumer Spending + Investments + Government Spending + (exports - imports). The first quarter of 2008 showed a tiny increase in GDP. Although it might feel like a recession, technically it isn't (perception vs. reality). The problem with the definition of a recession is that you will know you are in a recession two quarters after you have been in it. Since 1980, the United States has gone through 4 recessions, but they have been short and shallow.
-The primary impact of a recession is not on box office, but on fundraising. People tend to give when they are optimistic, but in tough times, people still seem to go out--people still need an escape. The only exception to this is cultural tourism. Cultural tourism seems to be affected much more than regular box office.
-In a recession, marketers have a smaller margin of error and they are called into question more. There is a temptation to increase sales goals based on the drop in contributed revenue but just because contributed revenue drops, the demand for your product doesn't increase in response.
Strategies:
1. Go back to the basics by focusing on cost-of-sale ratios, database analytics, and investing at the maximum level possible. The quality of the product is of ultimate importance in all of these factors. Cost-of-sale ratios should be ran for entire seasons as well as individual productions.
2. Over spend on marketing performances with the greatest expected outcomes because they will probably generate the best return on investment.
3. When tracking response reports from your subscription campaign, continue to mail to "over-producing" segments and continue to mail to those "over-producing" segments until they cease to "over-produce." On average, 85% of all subscription sales come from patrons with previous single ticket purchasing history. These prospects are 8 times more valuable than anyone else. Poorest responses generally come from rented lists.
4. Find a way to create new multi-ticket buyers because they are your best prospects for subscriptions. Most single ticket buyers go once and never return--you must find a way to get them back in the door.
5. When looking for the best prospects for subscription campaigns, you need to examine three factors: Recency, Frequency and Monetary. The more recent, the better. The more they attend, the better. And the more money they spend with the organization in a year, the better.
6. If your budgets are cut, take the money out of your marketing for your least popular shows and put them into your most popular shows. The least popular shows will still remain unpopular. If you double your sales on unpopular shows, who cares--it will gain you a minor amount of additional income. If you increase your big budget shows by 10%, it could be a substantial amount of additional revenue.
7. Plan artistic risks at the end of the season when your subscriber renewals are done, and your blockbuster when the subscription renewals start so that subscribers feel that seats are in demand and their subscriptions are valuable when they are asked to renew.
-The biggest client mistake that TRG sees regularly is overspending on print advertising (50% of the budget or higher). Reallocate your existing budget so you spend less on print advertising, and put more resources toward direct mail, e-mail and broadcast.
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