You're Mad -- What Are You Going to Do About It? (Reflections on Landesman's Speech)

Disclaimer: The thoughts and opinions in the post below are solely my own and do not necessarily represent the opinions of any institution I am employed by.

I count myself lucky to have been among the two hundred people that NEA Chairman Rocco Landesman addressed at the national new play development convening at Arena Stage on Wednesday, January 26, 2011. If you are interested in viewing the entire speech, it can be viewed here.

His speech caused a swift and emotional response from bloggers and media alike. Some of the more interesting responses are below:
Dear Rocco Landesman, We Don't Want Your Theater Death Panels, Arts Dispatch
Landesman Comments on Theater, The New York Times
Fighting Words from Rocco Landesman, Arena Stage Blog
On Rocco Landesman, Theatre Ideas

In his speech, Chairman Landesman said "there is a disconnect that has to be taken seriously — our research shows that attendance has been decreasing while the number of the organizations have been proliferating,” He continued by saying "You can either increase demand or decrease supply. Demand is not going to increase, so it is time to think about decreasing supply.” I must say that hearing those words spoken by the chairman of the National Endowment of the Arts initially struck me pretty hard, but then I decided to reflect upon them. Landesman isn't the first person to suggest that the arts are over populated. His partner on the stage that day, Diane Ragsdale, previously of the Mellon Foundation, had a few days earlier written a blog entitled "Overstocked arts pond: fish too big & fish too many" with a very similar argument. In fact, yours truly wrote a blog on the same subject matter on November 17, 2008.

A couple of hours after his speech, outrage over his comments took over social media platforms. The tone was frighteningly homogeneous--how dare the NEA Chairman say that we have too many theaters! However, I would challenge everyone to momentarily set aside your emotional reactions to a statement that rocks who we are as artists just long enough to look at the data and ask if his conclusion, although painful, might be rooted in logic. Study after study shows an environment where supply exceeds demand, from the National Capitalization Project to the Americans for the Arts National Art Index to local reports like this one from DC's Helen Hayes Awards.

The data shows that at this moment in time, there is too little demand and too much supply. That is fact, not opinion. Where I believe Chairman Landesman drew sharp criticism was at his suggestion that we have to decreased supply, because we can't increase demand. Many marketers, such as HowardW, immediately went on the defensive, stating that of course we could increase demand (it is the job of marketers to create demand for art, right?). I respond by saying if you could increase demand to meet the current supply, then why aren't you? This isn't an acute symptom we are discussing, but a chronic trend. Marketers are not super humans. We cannot on our own create an infinite amount of demand to meet the skyrocketing numbers of non-profit arts organizations. The data shows that we are out of balance, and whether we want to admit it or not, we can only live out of balance for so long before outside pressures will return the system to stasis. Don't get me wrong. There is nothing I want more than to prove Chairman Landesman wrong, but I wouldn't bet the farm on it.

From a motivational sense, what Chairman Landesman has done is remarkable. There is nothing that unites artists like telling them they can't do something. By nature, we are counter culture. We like to swim against the current. We need a challenge. Well, Landesman has thrown down the gauntlet. He has said that in his opinion supply will have to be reduced to meet demand. So, if you so passionately believe he is wrong, my question to you quite simply is--what are you going to do about it?

Perception is Reality: Managing Underperforming Productions

A couple of months ago, I wrote a blog post about managing success. Since that time, I have received several e-mails asking me how to manage in times that are not so successful. Non-profit arts organizations should be taking risks, and sometimes those risks pay off, and sometimes they don't. In times they don't, a marketer's job becomes focused on managing perception. The truth may be that there is very little demand for your current product, however there are several techniques that can be used to create the perception that a struggling product is actually quite successful.

1. Avoid mass public discounting if at all possible. Nothing sends a message that you have an unpopular product more than a mass public discount. Not to mention, it also upsets customers who have purchased earlier often at a higher price. GroupOn, Goldstar, Living Social, TicketPlace and TKTS are all examples of mass public discounting outlets. There are ways in which these outlets can be used successfully, but you have to have a very well thought out strategy. At some point in time, every organization will need to discount for one reason or another. However, discounts are best applied in one to one communications with limited abilities to forward on. In this case, viral marketing campaigns are not your friend. Here are some one to one discounting methods that I have used successfully:

• Cross-selling at the Box Office. Particularly in cases in which you have multiple venues, if one venue has a hit and the other doesn't, why not offer a very attractive discount to the less popular venue to all those who are purchasing tickets to the more popular venue? In this case, the discount offer is offered over the phone or in person and it cannot be forwarded. It also creates more multi-buyers which should increase the likelihood that they will respond to a subscription offer in the future.
• Robocalls. Before I say anything else, make sure you have the permission of those you call before you attempt to use a robocall. However, a short (30 second or less) robocall from an opinion leader (artistic director, celebrity, etc) with an attractive offer can be very successful.
• Direct Mail and E-mail. An organization can create a specific offer for a very segmented list, which will allow you to get an offer in front of people who are not subscribers, haven't purchased and are likely discount buyers with no history of purchasing full price tickets. If you are sending out an e-mail campaign, make sure to disable the "forward to a friend" option.
• Reward Sponsors. Offer a special discount to the employees of an important sponsor. The discount has to be significant enough to feel like a "reward." Often times, your primary contact will post the discount on a company message board or forward to department heads for distribution. This technique will help you fill the house, and will engage corporate sponsors.

2. Make sure you properly dress the house. When you place single tickets on sale, make sure you hold back certain inventory so that the house dresses itself from front to back, and from bottom to top. That way, when patrons take their seats even in a house that isn't full, the only thing they see in front of them are full seats, with the empty seats behind them. As patrons will be looking forward a great majority of the time, it creates the perception that the house is full. Some theaters are easier to dress than others. The easiest theaters to dress are proscenium houses with balconies. If the demand doesn't warrant it, then don't open the balcony and push all buyers to the orchestra. The orchestra will fill up, and you can close off the balcony. Seriously, how many people will stand up and turn around just to see if an upper balcony is full?

3. If you need to comp tickets, then make the comp tickets work for you. Ok, things are really desperate and you have found yourself in a situation where even discounts are barely working. You need to get some butts in seats, and your boss is telling you to just fill the house. In this situation, it is very important not to look desperate. Like everything else in life, you need a plan for dispersing complimentary tickets. Whatever you do, don't just throw out a comp ticket offer to a large group of people (i.e. listservs, message boards, etc). Like discounts, comping tickets is best done as a one to one activity. Use your comp tickets to:

• Reward your best customers first. Comp tickets can be used to thank new subscribers, reward donors for increasing gifts, to remedy customer service issues, etc. Even though you can't sell these tickets at full price, they still have value--make them work for you.
• Incentivize additional purchasing activity. Offer comp tickets to a poorly performing show as an incentive for additional purchases or upgrades.
• Reward your staff. Offer additional comp tickets above and beyond your normal policy to staff members as a way of thanking them for their hard work.
• Promote the production. Comp tickets can be given to media outlets, cab drivers, concierges, librarians, teachers, interest groups, convention and visitors bureaus, etc. in order to raise the visibility of the production and your organization.

The worst thing you can do when you have a poorly performing production is to take actions that make you look desperate. Like sharks, your patrons will smell blood in the water, and it will quickly kill an already under performing show.

Interestingly, a local theater company advertised that a recent production was one of the most successful shows in their company's history. However, for the entire run of the show, I kept seeing discount offers for tickets to that production all over the place, which led me to believe that the show was struggling. In this case, if it indeed was one of their highest grossing shows, in my estimation, they snatched defeat from the mouth of victory by creating the perception that the show needed to be discounted.

To wrap up, marketers are the masters of perception. It is our job to create and impact public perception for products that are popular and not so popular. But if we have done our jobs well, at the end of the day, our patrons won't be able to tell the difference between the two.

Customer Service from a Marketer's Point of View

I have been a lifelong customer of American Airlines. A frequent flyer, credit card holder, miles gifter--you name it. I started flying AA because they had direct flights into St. Louis, where most of my family lives. From there, I started to accrue miles, and soon enough, I booked all of my travel on AA. It became a habit. I knew their routes, the layout of their planes, and how to navigate Dallas Forth Worth airport like a local. In performing arts terms, I was a long time subscriber. That is until now.

My flight from St. Louis to Washington, DC was canceled the day after Christmas due to weather (even though DC didn't receive any snow, and my plane was at the airport ready to take off). I was informed by a robo call, which also told me that I was rebooked for a flight 26 hours later. The message ended by instructing me to call AA reservations if I had any questions or concerns. Knowing that I had to be at work the next day for two interviews with major media outlets, I tried calling the number given. After being hung up on four times, the automated telephone system said "we are experiencing high call volume. If you would like to speak with an agent, please call back later." Knowing that I wouldn't be able to speak with a human, I tried working out my problem on the AA iPhone App and on their website, neither of which were designed to handle cancellations. My last option was driving an hour and a half to the airport, which I did only to be met with an apologetic but complete ineffective gate agent. So with no other option, I boarded a flight 26 hours later, however I decided I would no longer be an AA subscriber.

As marketers, we know that it costs significantly more to attract new customers than it does to retain them. Customer service is one of the easiest ways to create brand champions or to drive loyal customers away. As the economic crisis continues, we are all being forced to examine our expenses and improve ROI. So here are some thoughts on customer service as a marketing tactic to reduce churn:

1. When dealing with a customer service complaint, take a holistic view of the customer. At Arena Stage, we are fortunate enough to have a robust database that allows us to see a holistic view of our patrons. Each time a patron comes into contact with our company, it is recorded. Any employee can log into the database, and see a lifetime's worth of interactions. Like most companies, Arena Stage has policies and procedures, however our greatest asset is the excellent judgment of our front line staff. They are instructed and empowered to thoroughly review a patron's file, and to depart from most policies and procedures if necessary to retain loyal customers. I would rather waive a $10 exchange fee for a longtime subscriber every once in awhile than spend ten times that finding a new subscriber. Senior managers must allow front line employees the flexibility to take care of highly valued customers.

2. Track all customer service issues, and start to look for a pattern. Each time a customer complains, be it to front of house, box office or anyone else, the complaint should be logged into your database and tracked. Every Monday morning, senior members of the Arena Stage staff are sent a CSI (customer service issue) report listing all the complaints that came in the previous week. These complaints are then put into a spreadsheet, sorted into categories and analyzed for any visible patterns. If the same issue continues to come up, you can bet that there are ten times the number of frustrated patrons with the same issue who haven't complained. It is then your responsibility to proactively address the issue swiftly to prevent future patrons from having a similar disappointing experience with your company.

3. Be proactive, rather than reactive. The best service comes from proactive management of customer service issues. Instead of relying exclusively on complaint tracking and analysis, be proactive and solicit opinions. Send customer satisfaction surveys. Benchmark numerical responses from year to year, and ask open ended questions. Aggressively solicit customer service issues and correct them before others have to experience them. In addition, if you notice a customer has experienced a problem, try to contact them before they contact you. We ask our house managers to get the names of all patrons who share complaints and/or concerns. This allows us to follow up with the patron and suggest a solution, apologize or offer some form of compensation before they contact our box office. Imagine receiving an apology and a compensatory offer from a box office before you even contact them to report an issue.

4. Even small gestures go a long way. After doing a little research on airline customer service, I was reminded by Time Magazine's Richard Zoglin in his article "The Airlines' Customer Complaint Lines: No Answer" that even small gestures go a long way. You might not be able to meet all the demands of an angry customer, but you should be able to offer a little something to most of them. A comp ticket to an under-performing show, a free drink at the bar, complimentary parking, an autographed poster or perhaps a handwritten response from your Artistic Director. In today's world of fast-paced, unfriendly, automated response systems to customer complaints, it shouldn't take much to stand out from the crowd. Differentiate yourself from your competition by making a small gesture to each upset patron.

By offering better customer service, you can reduce your marketing expenses by slowing down churn. Make it a priority to retain the customers you spent valuable time and resources attracting in the first place.