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The Legendary Audience Churn Study
Episode 7

The Legendary Audience Churn Study

CI to Eye with Jack McAuliffe

This episode is hosted by Erik Gensler.

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Erik and Jack discuss the findings from four large audience research studies, why a good marketing director should have a role in programming, and how storytelling and context are so important for arts organizations.

Erik Gensler: Welcome to CI to Eye. I’m Erik Gensler. I’m an entrepreneur, an arts marketer, and on a lifelong quest to learn and grow personally and professionally. In this podcast, I interview leaders and thinkers inside an outside of arts marketing to understand how we can grow to be the best we can be. My goal: to see eye to eye. I sat down with Jack McAuliffe, who is an organizational coach for the leadership of a number of arts organizations. Jack has had a long career in arts leadership, including serving as the first director of marketing at the Kennedy Center and as the COO of the League of American Orchestras, where he commissioned several audience engagement studies, including the legendary orchestra churn study.

Jack McAuliffe: Turns out that it wasn’t 80% of first timers not coming back, it was 90. So we kept 10% of those people. We worked so hard to get in, 10% of ’em came back. If we could get them to a second or third concert, it went up to 50%. So half of them returned after their second or third concert, whereas only 10% returned after their first.

Erik Gensler: We talked about the findings from the four large audience research studies he commissioned why a good marketing director should have a role in programming and how storytelling and context is so important for arts organizations. So thank you so much for joining me today.

Jack McAuliffe: Oh, it’s my pleasure and I’ve thoroughly enjoyed listening to all your podcasts up to this one, so we’ll try not to disappoint.

Erik Gensler: So in doing research for this podcast, I learned that you share a name with a boxer and a brewer.

Jack McAuliffe: I had a general —

Erik Gensler: Oh, and a general too,

Jack McAuliffe: — who was famous for saying “nuts” in World War II when he was told to surrender. Of course he didn’t say “nuts,” but that’s what got printed back then.

Erik Gensler: So for the folks that don’t know you, can you just give us a quick professional bio? The highlight reel version.

Jack McAuliffe: The elevator version of 50 years in performing arts marketing, which I don’t call marketing anymore, I now call audience engagement marketing — it’s just too transactional. Started out with a Ford Foundation Fellowship with the Detroit Symphony Orchestra. Then that was Vietnam. I was able to get into the Coast Guard, spent three years in the chief of staff’s office in long range planning, which turned out to be useful and a lot better than the alternatives. Then went back to my undergraduate school to open a performing arts center. From there, I went to become the first director of marketing at the Kennedy Center in Washington. After 15 years of 66,000 seats a week to sell, I decided to focus on orchestras, went to the American Symphony Orchestra League, which is now the League of American Orchestras as their vice president and chief operating officer. And then about 10 years ago, I left that to focus entirely on audience building with my own company. So I’ve been doing coaching since then. So I was interested in your podcast with your coach because she was doing personal coaching and I’ve started doing institutional coaching, which is an interesting twist on it. I don’t know many other institutional coaches.

Erik Gensler: How does that work?

Jack McAuliffe: Basically, I work with the leadership of about a dozen and a half clients in an as needed role to talk with the executive director or the marketing director or a board member or the music director or a combination of them just saying, okay, what are the issues? What are the best practices we found in the industry? Sometimes a nudge, it’s time to get your subscription out. It’s April, everybody else was out in February. And the difference basically, you bring experience to very talented, bright people who haven’t done it 48 times before and it can make a real difference. Most of my clients are looking at double digit subscription growth every year. Really, you can turn things around if you do things thoughtfully and timely.

Erik Gensler: Do you think that it’s better for a marketing director to come from an arts background, meaning having worked in an arts institution because the learning curve of what we do is just so steeper. Have you seen examples where you’ve seen people from completely out of the arts start in a marketing leadership role and be successful?

Jack McAuliffe: I think marketing the arts is a very different skill than retail marketing. I will get a board chairman that will come and say, listen, this should be an easy job to fill. I know eight marketing directors, they’re hugely talented. One of those has got to do it. And I’ve encouraged ’em to actually change the title of the position to director of audience engagement because you’ve got to understand this is about building relationships. Now that can happen in the retail commercial world as well. So if they have a background in relationship building, then they may be a good fit.

Erik Gensler: A couple of thoughts from that one. I remember when I had my first job at an arts organization, I came in and I was young and probably hotheaded and thought, oh, this is easy. I’ll fix this and I’ll do this and I’ll do that. And then a lot of that didn’t work and all the people who had been there a long time were sort of like, oh, okay, this kid’s going to try all this stuff. And some of it worked. But I guess my point in saying that is it looks from the outside really easy for some things, but it’s actually quite hard and really requires a lot of knowledge of a lot of things. And I often say that the marketers of an arts and cultural organization are running such a core piece of the business, meaning you are responsible for the lion’s share of the revenue that comes in your institution, and that involves so many different moving pieces. You’re in charge of all of the advertising, you’re in charge of all of the pricing, you’re in charge of often the box office, you’re in charge of now all of the digital marketing. And really a lot of times the success and future of the organization rests on your shoulders. I mean, of course, with the support of the board and the leadership, but these are big jobs.

Jack McAuliffe: Yes. In fact, more than that, a good marketing director also has a role in programming. It’s not just the artistic director’s job to bring in the six pieces of repertoire he really wants to play this year. He needs to be aware of what the market is for each of those pieces of repertoire. I had an experience at Kennedy Center with Mstislav Rostropovich, who was music director at that time, who I saw once a year he would come into my office, he’d give me a great big Russian bear hug, and he’d say, keep up the good work Jack. And that was it. And one year he wanted to do a tribute to Nadia Boulanger, the Parisian teacher and trainer of all sorts of composers, most of them at the university school, which meant beautiful pieces, completely inaccessible to the audience. And so he wanted to do this program of tribute to Nadia.

The most familiar work on the program was Elliott Carter’s Concerto for Orchestra, which is an extraordinary piece, but not easy to listen to and one nobody’s familiar with really, except for some of the musicians. Slava scheduled extra rehearsals for it, I’m sure it played the stuffing out of it. Unfortunately, he wanted to do it on opening night. And at the Kennedy Center at that time, the National Symphony did four performances of every program. So we had a Thursday, Friday, Saturday, and Tuesday performance of this tribute to Nadia Boulanger for opening of each of the series. All the subscribers exchanged out. We pretty much papered the house for opening night, which was fine for the first half, but nobody came back after intermission. It was just a, now did Slava have a right to do that program? Absolutely. In fact, I really would encourage it or maybe I would encourage to work in one of those works here and there, but to do it on opening night, I would’ve advised against if the hug had lasted longer.

And that’s a marketing director’s responsibility. Very quickly, five years later, after I’d left the Kennedy Center, I went back for a program with Leonard Slatkin conducting. He was then music director. He did Elliot Carter’s Concerto for Orchestra again, but he did it on a program with Andre Watts doing a Rachmaninoff piano concerto. He opened with the Carter, bounded out on stage as only Leonard can do, picked up a handheld microphone and said, okay, folks, fasten your seat belts. This is the most challenging piece we’re going to play all year, but it’s an important piece and it’s really just a theme in variations. Here’s the theme. And he turns around and he plays 10 seconds in the violins, which was quite beautiful. And he says, you’re never going to hear that again because he hides it. It’ll come back in timbers, it’ll come back in rhythms.

Here it is in a rhythm and it’s in the percussion section. And he turns around and he plays something else that was memorable. And he says, you will hear that, and it’s important because when you hear it, you’re halfway through. That was all he said. It probably took about as long as it took me to say it here, turned around and played it. People did not fasten their seat belts. They sat on the edge of their seats. They were listening. They were going to hear that theme one way or the other. When it was over, did they all leave? He got five curtain calls at intermission. Were they talking about the Rachmaninoff? They were talking about the Carter. He’d provided them context. And Erik, when you talk to my marketing group a couple of weeks ago, you emphasized the importance of telling stories in marketing. And that’s basically what he did. He told them a little story, and it used to be the only way we could tell those stories was at the concert. Now we can tell those stories in advance. Absolutely. And that’s really exciting and we’re really just learning how to do that.

Erik Gensler: Absolutely. It goes back to something I learned from, I think it was Thomas Whites at San Francisco Ballet who leads their digital team and they did some research and found that one of the major drivers to participation in more of the classical arts, like classical music and ballet and opera, is education. And the more someone knows about the art, the more they’re going to see it, the more they’re going to engage. And that’s a virtuous cycle. And once you told me that, I never forgot that about the importance of just educating your audience and the importance of really social media and digital channels and being able to audience build.

Jack McAuliffe: Absolutely. In fact, you just added one more huge responsibility to the marketing directory, which is director of education, not school concerts, but the familiarization of the audience. One of the things I believe very strongly in is the need to do research it. We get so wrapped up in selling tickets for tonight that we don’t look much beyond that and we really need to do that.

Erik Gensler: I’m excited to ask you about a lot of the research studies you’ve worked on. Yeah. That I think that will be really great for everybody here, and I’m excited to learn more about them. I understand that you’ve done five studies since 2000 and in the first one, I believe was the audience motivation research project. Perhaps I’m getting that wrong, but you want to tell me about perhaps the first study and the evolution of those studies and what, let’s take one at a time.

Jack McAuliffe: Yes. And you got it right. The first study that was formative in my thinking here was the audience motivation research project. And that was when I was still at the league. We really were troubled that we were doing a lot of things because we’ve always done a lot of things and are these the right things? And there were a lot of studies out there that were audience demographic studies. We knew how old the audience was.

Erik Gensler: Yeah, what are you supposed to do with that?

Jack McAuliffe: And we didn’t want to know how old the audience was, and it just didn’t help. So we said, okay, what we’re concerned about is really what motivates somebody to listen to this music, what motivates ’em to pay good money for tickets and what inhibits them? And we can look at that. And there were a bunch of findings that came out of it. One of the questions we wanted to know, why were people there at a concert? What was it? Because they would meet people that they might do business with later on. Was it, these are my people, I’m going, no, they were there for the music. It was hands down, it was the music that brought them there. It may not have been the thing that brought them to their first concert, but it was the thing that brought them back. If they didn’t fall in love with the music, they didn’t stick. And that was an important fight. We actually called that finding the frequency spiral. And that’s worth taking a moment on if you —

Erik Gensler: Sure. What is the frequency spiral?

Jack McAuliffe: We asked the question, what correlates most to frequency of attendance? And the real answer was enjoyment. If you the music and you enjoyed the concert experience, you are far more likely to come back to another concert. That made sense, although we weren’t quite sure what to do with it at that point. So then we said, okay, what correlates most to enjoyment? And this was the answer that was transformative for me. Familiarity. The more familiar you were with the music, with the concert experience, the more likely you were to come back. Lakin’s experience with Carter Concerto, you were more familiar, you enjoyed it more, you came back. Okay, so we’re on a roll. What correlates to familiarity? And the answer was frequency. The more frequently you attend, the more familiar you become. The more you enjoy it, the more frequently you attend circular. But it isn’t circular because it accelerates.

So it’s a spiral. So if you can get people into that spiral, you just pull ’em along with you. And then we looked at, okay, are there points of entry? And there’s, in fact, each of those frequencies is a point of entry. Enjoyment is a point of entry. Familiarity is a big point of entry. Frequency, you can improve by pricing. You can get people back to another concert with a discount. You can get people to subscribe frequently with a discount. You can lower the price as Henry Focal who was president of League part of the time I was there, said there is a price when you can fill any house for any program. I’m not sure of that, but it’s close. So there are a few things you can do to intervene at frequency. There are a number of things you can do to intervene at enjoyment, but they’re mostly artistic. So the choice of the program is a huge difference on enjoyment. Do these three works go together or do they just all use four bassoons from a market point of view? Right. And

Erik Gensler: That’s where you go back to where you said the marketer’s…

Jack McAuliffe: …role in programming, yeah. So a marketer does have a role at improving enjoyment and of course how well it’s rehearsed, the quality of the soloist, all of those things, plus all the environment are factors. If the ushers are rude, you’re already set off for a terrible evening if you felt welcomed when you came into the call, if you found a parking space, all of those things. So everything’s on the table to improve enjoyment, but the big factor is familiarity. And it’s also the one that was trickiest to address because you could do it like slapping did with a carter and you could say a few words when people take that to excess. And he said nothing about the Rachmaninoff didn’t need to. That was familiar enough to begin with. But if somebody tries to introduce every program, especially if they’re not good at it, you’ll have audience members coming up and say, well, you get these people to shut up and just play the music. I remember Philadelphia once tried, it was part of one of these foundation grants to better engage audiences and they put up video screens around the hall and they did a really good job of zeroing in on a solo instrument. And that provided access if not.

Erik Gensler: Familiar familiarity.

Jack McAuliffe: And when they interviewed people as they went out, half of them said, wow, that was fabulous. I finally got into a concert or I had no idea this would be that visual and fascinating. And the other half said, you do that again and you see my back.

Erik Gensler: Yeah. It just goes back to there’s no monolith. All of these things are segments. And when you say everyone’s familiar with rock mono enough, I would challenge you on that and say, that’s not true. People who go to the orchestra regularly are, but I’m certainly not. And if we’re trying to get new audiences in, I don’t think it’s even fair to make that assumption.

Jack McAuliffe: In fact, the California Symphony did a study of millennials and they were looking at how the millennials were interacting with their website, and they had a fairly traditional website at that point, and they had one millennial came up to ’em and they said, well, this is all well and good, but what’s a concerto?

And we just take that for granted. People know what that is. So on the other hand, if I take two minutes to define concerto for you, I’ve turned away a whole bunch of people who don’t want to spend time with that. They want to get to something else. So now we have the beauty of being able to talk to different markets through different media rather than having to treat in the hall. Everybody is an audience member outside the hall. They may be on social media, they may be reading the newspaper, they may be getting direct mail. We have a whole bunch of avenues to reach markets and we should craft messages —

Erik Gensler: — to meet people where they are that market.

Jack McAuliffe: So instead of having to have one message to sell, one concert, you got to have six strategies for each concert. The job just keeps getting bigger.

Erik Gensler: Well, and that’s the beauty of digital and social is the real ability to use segmentation in a way that was not possible before. Both in terms of how you’re emailing people, how you’re speaking to ’em on social media through slicing and dicing audience and giving different, I mean a capacity. We call it top of funnel audiences and mid funnel audiences. So top of funnel is someone who’s new to your organization, and for example, take Jacob’s Pillow dance. If you’re a top of funnel audience member, meaning we don’t have you and you’re not following them on social media, you’re not in the email lists, you’ve not been to their website in the past six months, we’re going to talk to you about the great experience of seeing the space, the nature, the dance outdoors message. But if you’re a more engaged person who perhaps has been there before or follows on social media, you’re going to get program specific messages because we assume that based on your past purchase history that there’s kind of dance that you would like. And so it’s really a way to segment the audience based on past participation and assumed interests.

Jack McAuliffe: And with even a moderate amount of database management, you should be able to start doing that sort of thing. Although it’s amazing how many people do not have a moderate amount of database management.

Erik Gensler: Well, and the amount of people it takes to do that. I mean, it’s hard enough to get an organization on board to send one monolithic email. It’s much harder to hire enough people and gather enough resources and make the case internally that guess what you need someone focused on this. It’s sort of taken us away from the study. Let’s jump back to these studies, and the one that I have been familiar with for a very long time, and I think was the most notorious, was what I believe is called the churn study. That’s what I always called it, and I’d love to hear about how that came to be, what the results of that were. And I think it’s one of the really sort of iconic pieces of research that’s come out of the arts.

Jack McAuliffe: Certainly has been for me, and I agree with you. I remember it was Ed Cameron, who was the marketing director in Philadelphia at the time, who said, I’m under a lot of pressure from my board, from my executive director to bring in a lot more new people. He says, I can’t walk down the hallway without somebody saying, I didn’t see anybody new at the concert last night. And he said, I went back and looked at my database and I was going through it. There were an awful lot of new to file names on it, really, not just one here and one there, but a significant number of the people who bought tickets last weekend were new to file. This doesn’t jive with what I’m hearing. And so he said, I went back and I looked and I said, I’m bringing in a ton of new people, but they’re not coming back. He said, I think maybe 80% of ’em are not returning after their first concert. And so the informal title of the study, churn, that’s churn. You capture a customer and they walk away on you Triers. Yeah. The group said, okay, Jack, find somebody who knows something about this.

And so I just did a web search and I stumbled on a study that was published called Churn in Subscription-based Industries. It was done by Martin Khan who was with what became Oliver Wyman Research. He was head of the New York office. So I called him up and I said, Hey, I’ve got a challenging study for you. Would you like? So after a four hour breakfast, Martin made a commitment to do a pro bono study for this group.

Erik Gensler: Nice work.

Jack McAuliffe: And he paid for the breakfast. It was intriguing. Not only that, it provided Oliver Wyman with access to the boards of directors of 10 major American orchestras, and these people were in every field imaginable, not foolish on his part either, but he agreed to do a study. He devoted six staff members full-time for three months on the study. He said it was a $2 million study when he finished, and it was called the Audience Growth Initiative. And basically it was, are we experiencing this churn? So all 10 of these orchestras provided five years worth of data so that they could massage this and find out what the churn rate was. Turns out that it wasn’t 80% of first timers not coming back. It was 90. In other words, we kept 10% of those people. We worked so hard to get in, 10% of ’em came back. But…

Erik Gensler: That’s single ticket buyers?

Jack McAuliffe: Yeah, subscribers are taken out. That’s only single ticket buyers. Of first time single ticket buyers.

Erik Gensler: First time single ticket buyers.

Jack McAuliffe: 10% came back even one more concert.

Erik Gensler: But within a year, or…?

Jack McAuliffe: Whereas if we could get them to a second or third concert, it went up to 50%. So half of them returned after their second or third concert, whereas only 10% returned after their first. Now some of that’s a natural selection. I’m sure of the 10% that came back to a second concert, half of those came back too. But if we could get more of ’em to come back, then we’ve got them on the road. So it’s —

Erik Gensler: — all about that second concert.

Jack McAuliffe: So what do we do to get ’em back for the second concert? And they looked at a dozen different levers, day of the week, programming, soloist, pricing, discounting, seating. If you invite ’em back to a Saturday night, you got a few more back than if you invited him back to a Thursday. If you invited them back for a famous solo West, you tended to get a few more back than if you invited them for an all orchestral program. But if you offered ’em a 50% discount, that was hands down the most powerful lever to get them back to that second concert. So that became sort of the focal point of, okay, how do we then speak to these first timers and offer ’em an opportunity? Now that you’ve gotten a taste of what the Phil Armani can do, we’d like to invite you back to your choice of this program or that program, a special 50% discount. And we’re finding that we had dropped that number from the 90% not coming back to something in the seventies, which is still a huge number not coming back, but it’s at least a hundred percent improvement over where it was.

Erik Gensler: But do you create a situation where you’ve now devalued the product and it’s harder to get them to pay full price after getting such an extreme discount, particularly on a Saturday night, which is a premium night.

Jack McAuliffe: That discount helps people move to a second concert. The third concert, you don’t offer the discount, you just come back to the program. It’s a little bit of that. If you fall in love with the music, you’ll come back. Okay, so you don’t fall in love with the discount. You fall in love with the music. And so if we can get them more into the music, they value it more and they forget what they paid in the price. And moving from one concert to a second concert to multiple concerts to subscription is basically a progression in my mind. It’s your funnel.

Erik Gensler: Yeah. It’s baby steps. So it’s not a leap.

Jack McAuliffe: Once you try to move people from coming to two or three concerts to subscribing, discounting again becomes a factor. So not so much in these larger budget orchestras, but in some of the mid-size budget orchestras that I work with as a coach, we’ve tried a 50% introductory subscription discount. First year subscribers say 50% off the ticket price. Then in their second year when they come back is what I call a freshman, they get a 30% discount. And when they come back the third year as a sophomore and beyond, they get a five or 10% discount. And by the time they get the third year, many of them are making a contribution on top of their ticket price. So in fact, they’re may be paying a 10, 20, 30% premium on top of the price. The point I was going to make was the measuring the effect of the discount when orchestras were bringing people in at a 10%, renewing ’em at 10%, renewing at a 10% first year subscribers tended to renew at about a 45% rate.

So about half of the people who tried it as a subscription decided it was for them, and they came back a second year. Sophomores, they came back at about a 75% rate. Established came back at a 90% rate. When we applied the discount scenario to it, half off, 30% off 10% of the first year people, about 45% came back. So you got the same amount returning going from a 50 to 30% discount as you did from a 10 to a 10. The only thing is when you had a 10% discount, you might’ve had 50 new subscribers, and with a 50% discount, you may have had 500 new subscribers. So you’re bringing back half of a much larger group. And after three years, everybody’s paying the established series.

Erik Gensler: ‘Cause they’re through the spiral.

Jack McAuliffe: Which is why so many of them are growing their subscription bases by double digits every year with that kind of an approach. But it also depends on the market. If you’re the only show in town, you’re only orchestra in town, this works better than if you’re in New York City. And I can go to any one of four orchestra concerts at any given night.

Erik Gensler: Right? You can be more picky of your curate your own. The thing that I remember from that was you called that, if I remember from the study, right? It’s the killer offer, right? Yes. You have to give the killer offer, and that’s the 50% return for the first time ticket buyer.

Jack McAuliffe: And that is what Oliver Wyman called it. I think it dropped out of usage for us. We didn’t want any mortality in the —

Erik Gensler: Keep it positive.

Jack McAuliffe: But a lot of people did apply it. How they applied, it was interesting. A lot of people just mailed them an offer or emailed them an offer. A number of orchestras went a little bit beyond that, and they put a familiarity piece in it too. And by email, they invited the first time attenders to take a short online survey to tell us about your experience. We’d love to know how this hit you. The email that went to them said the subject was your concert last weekend. What did I leave my wallet there? And then of course, by the time you read it, and we said, and to thank you for taking the survey, would make you a very special offer to come back. And there were maybe two or three other questions on it. What we learned was that a lot of the traditional media was not drawing like the money we were putting into it. And that, in fact, I’m still doing these surveys right now. The top response tends to be web search.

Erik Gensler: Sure. I mean, search is a huge indicator of intent. Oh god, their exact number was like 70 or 80 or even 90% of people who are searching for theater in theater ticket terms end up purchasing within 30 days. Yeah. And I think people are dramatically under investing in search engine marketing. There’s the Google grant, which is a great thing. It gets you $10,000 per month of free AdWords, but there’s a huge untapped market because you just can’t be competitive enough for certain terms with that grant money. So a lot of our clients are supplementing that with paid search and it really pays off.

Jack McAuliffe: And I push them that direction too, because the paid search isn’t that expensive.

Erik Gensler: Not on a cost per conversion basis at all.

Jack McAuliffe: I think the thing that got me thinking that way was the study you published online where you looked at actually somebody who had done display ads in on the New York Times and Facebook ads.

Erik Gensler: Oh, right.

Jack McAuliffe: The return on both of those and the return on those two really surprised. I said, I have to look at this closer now. This capacity group is doing something interesting here. And that was the first thing you saw. That was my acquaintance with you.

Erik Gensler: Oh, wow. Yeah. That was a really fascinating, and that was, that’s kind of an older study that we still bring up sometimes. It really goes to the power of behavioral advertising and social media where the idea of it’s really buying display ads on a site like the New York Times where you’re paying a $40 CPM, you’re buying on a very old school way, which is cost per eyeball. Seeing it. And when you buy behaviorally, not only can you target much better, but you optimize on a cost per acquisition basis like buying from a local radio or TV station or newspapers website. They’re not giving you acquisition data. They’re giving you clicks, they’re guaranteeing you a certain number of impressions, impressions, but that is also, it’s quite expensive. You can’t optimize it. And when you’re using a tool like Facebook, which I think is the absolutely most powerful advertising tool ever invented and fundamentally should be the driver digital of your communications, of your advertising, it should be the top line item on your budget hand down in terms of the amount of time people are spending on it, the amount of people using it across all ages and demographics and its ability to turn dollars into ticket sales.

It’s unmatched anywhere else. And that was probably four or five years ago we published that. And it remains true today.

Jack McAuliffe: The biggest problem with it is that unlike newspaper advertising where what you do hasn’t changed in 30 years, what you do on Facebook, what you do in search changes almost monthly. And to be able to stay on top of those changes and to optimize what you’re doing there, this is where I think you guys play a huge role. Arts organizations just don’t have the staff to have invest in somebody to stay current on this. They need a coach, a partner, somebody who is going to keep them focused on what’s working on Facebook today, why you have to augment or Google grant with paid search. That never occurred to me until you talked to our group a couple of weeks ago and I said, okay, that makes sense.

Erik Gensler: I appreciate that.

Jack McAuliffe: And cost sense.

Erik Gensler: Definitely. As opposed to —

Jack McAuliffe: Opposed to that print ad.

Erik Gensler: It’s a very hard transition for organizations that have been operating this way for so long to make, and it takes a lot of internal evangelism, and it takes, I think mostly it takes one person internally to really grab the bull by the horns and just be dedicated to driving that change. And to this day, I still see organizations buying TV for shows with no star and play with the star. In a small market, and they’re just throwing the money away. And it’s very hard to say to them, you’re doing this wrong, and you have to really establish a relationship. They don’t want to get on a phone call with me and say, what are you doing? You’re buying television ads and for a play that no one’s ever heard of with no stars. Put that money in Facebook and it’s going to, I see it time after time when organizations make that switch. They’ll email me after a few months and say, we’ve had the bestselling show we’ve ever had, or Our sales are growing, they never had before. It’s just true. Just you have to be where the eyes and ears are. And people are addicted to social media these days.

Jack McAuliffe: And with a TV spot or that radio spot, you’ve got one spot out there working or maybe not working with Facebook. You can do more than one post a day.

Erik Gensler: If you want storytelling.

Jack McAuliffe: And like they used to publish novels. Here’s the first chapter, here’s the second.

Erik Gensler: What is that called? Serial?

Jack McAuliffe: Serial novels.

Erik Gensler: Yeah, serial novels. Yeah. Yeah, exactly.

Jack McAuliffe: Oh, that’s a podcast called Serial too.

Erik Gensler: Oh yeah. Oh my God. I just listened to S Town.

Jack McAuliffe: I do too.

Erik Gensler: Lost the day. Let’s go back to your studies. I love talking about digital marketing. We can keep talking about it, but I just want to make sure we add in this next layer, which I believe the next step was a survey around how does this impact fundraising and development.

Jack McAuliffe: There was a hint in the churn study that there might be an implication for development. And I think three of the orchestras, it was San Francisco and two others that gave us some donor data that we could compare back to frequency of attendance and the indications of that to the limits of the project seems to impact this as well. So we decided that we really needed to look more holistically because truthfully, we felt that our audience were not just customers, they were also donors. The churn study was done in 2008 or reported out in 2008. The patron growth first home was 2011. So we had three more years of data in that study, plus we augmented it with development data. And we found that what was true for customers was just as true for donors. That actually frequency of attendance trumped tenure in terms of what percentage of people would donate and the size of their gifts. So if you came several times a year for a few years, more of you tended to give and give more than people who came infrequently for four or five years. And we found that that just accelerated that people who came seven or eight times a year for a few years, or giving three times as much as people who came infrequently for even longer periods of time. And so this whole idea of that basically marketing was the front office of development, right?

Erik Gensler: Absolutely.

Jack McAuliffe: And that there needed to be a partnership here. So the whole concept of I bought a ticket, I came to my first concert, and the next day I get a tele funding call to become a member of the institution is completely counterproductive. It tends to inhibit me from taking up a marketing call three days later to come back to a second concert.

Erik Gensler: Don’t ask them to get married on the first date.

Jack McAuliffe: Yeah. It’s just that we don’t have that many chances to make a second oppression. That’s right. If we do it wrong, we’ve just thrown them away.

Erik Gensler: Absolutely. And that second impression you learned from the churn study is the most important one. Yeah.

Jack McAuliffe: And so I remember in Chicago, after the Patron Ghost study was over, Chicago refocused its development effort to instead of spending a great deal of time trying to bring in first time attenders, they spent the time looking at people who have been giving a moderate amount of money for several years, $50 gift for several years, or a hundred dollars gift for several years. So they reassigned the people that were working on bringing people in as new donors to getting the people who were giving a moderate amount to give more. And that’s where the nickname of the Patron Growth study turned out to be. Surprise and delight. One of the things we found is that everybody has these wonderful charts of, for $50, you get your name in the program for a hundred dollars, you get your name in the program in bold for 150, you get coat check and a free drink at one of the concerts, maybe.

Erik Gensler: 500 bucks.

Jack McAuliffe: I dunno. Yeah, free. And at some point you got free valet parking. When we asked people, why do you give? Unprompted, nobody — next to nobody — mentioned for the benefits.

Most of them said, this is an important part of the community. I enjoy the music. I need to support quality institutions. It was all about the mission deserving. Right. Then when we followed up with, did you get a benefit for your gift? Yeah, but I can’t remember what it was. So wait a minute. All these benefits we’re using out there as carrots. We should be talking about the motivation to support it. But we came up with the concept of surprise and delight benefits. So what a number of orchestras that were on Tessitura and had this capability did is that they selected for every concert, several dozen patrons who were on the bubble stock car racing term. I think it’s the car that’s just about to be eliminated or not come back anyway. So that could mean they were a first time subscriber. It could mean they were a donor stuck in the $50. It could be anybody that was, it needed a nudge to move up a level of engagement with them. And so they identified several dozen of these. They had, I think six or eight staff members at each concert who were assigned to intercept those patrons on the bubble. And what happened was when their tickets were swiped, Tessitura sent a text to the staff member assigned to that person, said,

Erik Gensler: They’re in the house.

Jack McAuliffe: They’re in the house. They’re in L two and four. Go get ’em. And I remember Cincinnati would come down and say, just want to thank you for being here tonight. You’re why we do this. Here’s a symphony chocolate bar. Enjoy somebody who’s a donor that’s on the bubble. We’ve got a couple of seats up in the box tonight that are empty. Would you like to join us up in the box tonight or invite you to the patron lounge at intermission to just something that out of the blue, thank you for being part of this. Thank you for your support. No ask. The ask happens a little bit later, and I don’t have measurements on how much it’s jumped up, but clearly talk, when you ask people about benefits, they remember the surprise and delight ones, right?

Erik Gensler: And it dramatically increases the loyalty and the propensity to give more.

Jack McAuliffe: And we found we can even do it on a bigger scale than that. New York Philharmonic, again for first time subscribers, which again is a bubble group at their first concert taped to their seat is a letter from one of the musicians in the orchestra. They printed stationary with a musician’s picture. The letter is personally to them from her signed a lot of the letters, looked a lot. I like think they were all written by marketing, but with a little touch. The musicians volunteered to sign these and to be part of it and basically telling them, we’re so pleased you’ve chosen to subscribe. If you weren’t here, this would just be a rehearsal and enjoy your evening. And nothing much more than that. We know those people in the audience were saying, yes, it’s that violist back there. She’s our musician. And we had people coming to the stage door afterwards saying, I’d like to meet my musician.

Another thing that a number of the orchestras I coach do is at one of the first concerts, they send either a postcard to reach everybody or an email to reach cheaper saying, your first concert is this night. Here’s a good place to get parking. Please bring this postcard with you to the welcome desk for your welcome gift. They staff the welcome desk with board members. And when somebody comes up to get their gift, they don’t just get a CD of the orchestra or a symphony chocolate bar or something of nominal value, they get a handshake from a board member who says, we’re so pleased to have you here as a subscriber. We want to make sure you enjoy every note of this thing. If you have any issues or whatever else, please give the office a call. They’ll get it fixed for you. Enjoy your concert. And it’s a two minute encounter, but it’s personal.

Erik Gensler: It’s the human touch.

Jack McAuliffe: I made the right decision. I’m in the right place, and it makes a difference.

Erik Gensler: That’s fascinating. And then the final study was more about 2015.

Jack McAuliffe: We decided to do one more, but looked by age cohorts because we figured there isn’t just one market of patrons. There’s a bunch of ’em. This is the one we’re struggling with now because my generation, and you can guess that what that is, if I’ve been doing this for 50 years, my generation’s pretty typical in the audience. We’re there for the music. We’re all about, as far as the orchestra is concerned, they’re about maximizing our participation, both in person and in terms of support. Am I going to leave money in my will to them? Am I going to make a major donation at some point? It isn’t to get me to more concerts. I’m going to the concert. It’s vibrant, but you have to work at it, and it’s a part of it. It isn’t all of it. And we could spend a lot of time on it.

So the boomers, we really want to maximize their frequency and develop the propensity to give the amount is less important. Or actually the amount starts changing here at this point. The next group would be Gen Xers, but it isn’t really, it’s younger boomers, older Gen Xers, which we really should classify as empt nesters because that’s a critical transition point. It’s when you have a little more time and a little more money that you can do what you want and do it more frequently. And we want to make sure that what we are, what they want. So that’s an area we’re really focusing on. Millennials are intriguing, they are curious. They can get really committed, but they’re probably not going to be a part of our base for another 20 years. So we have to find a way to begin building a familiarity with millennials. For millennials, if the membership includes a social element and very few concerts, it can become a piece of familiarity. That’s going to be an investment that’s going to pay out later. We don’t expect these people are going to subscribe right now.

Erik Gensler: Right. Set your expectations, have your realistic —

Jack McAuliffe: In fact, that was another finding of that initial research is that there was a 20 year gestation period from when you got inoculated into the music and when you actually became a part of the audience.

Erik Gensler: So it really is about resetting expectations and looking at it often through a framework of age and generation.

Jack McAuliffe: You don’t have just one market you’re talking to, right?

Erik Gensler: You can’t look at anything like a monolith. It’s really sophisticated and segmented by all sorts of different variables.

Jack McAuliffe: And this is all often being done by one or two people, which is why access to a coach who can keep you on track, access to outside professionals who can keep you up to date and get you an inside track to doing the pieces of what you do. You used to go to an ad agency to place your ad in the newspaper. That’s irrelevant now. And so the stuff, the work that you’re doing is in essence being that professional guide to people in an ever-changing world.

Erik Gensler: And that was really the point of this podcast. And I was thinking about it recently, and I remember when I started in the field, I would get Thomas cots, you’ve caught mail. And it really made me feel like I was part of a community that was focused on the same goal. And it had a professional development aspect that I so appreciated. And I just texted Thomas the other day and said, I think what part of this podcast is is building on that legacy of you’ve caught mail. The community created, the professional development created. And I’ve been looking at some of the reviews we’ve got on iTunes and one of the ones has said, I’m an executive director from a small organization and the podcast has given me this professional development that I’ve been looking for. And I’ve been hearing from people that it’s filling a void of inspiration and coaching and leadership that they’ve needed. So that means the world, that kind of feedback and giving this away as a service to the community. And as a, we are a mission-driven organization. We care deeply about the health and the success of arts institutions in this country. We think the arts makes the world a better place. And having these conversations I just think is so valuable. So thank you for everyone who’s leaving feedback.

Jack McAuliffe: Two responses I give you of that is one, I’ve been doing this work for almost 50 years now, and I’ve learned something new from each of your podcasts that I’ve heard just constantly need to constantly grow in our perception of what’s going on. And the other perception is that in a way, this podcast is doing a little bit what my marketing professionals group did is it’s creating a community. All of these people are doing similar work all by themselves. They’ve got no access to anybody else’s doing the same thing to talk about this failed. Why did this fail? Have you tried it? Yeah, I tried it, but I tweaked it this way and it worked. Oh, I should have thought of that. And your podcasts are providing that same sort of, have you thought about this?

Erik Gensler: Right. In addition to all the conferences throughout the year, I think those are just so valuable of just bumping into other people facing the same challenges. It’s so helpful and validating to have the ability to just learn from other people’s mistakes. Yeah.

Jack McAuliffe: We learned early on in the groups that we’re not in competition with each other, so we don’t have to hide anything. I mean, you can be embarrassed by something that didn’t work or you can learn from it.

Erik Gensler: What is the overall health of symphonies in America?

Jack McAuliffe: They’re surprisingly resilient. They have changed a lot in the 50 years that I first started with the Detroit Symphony. The challenges are substantially larger. And there are two major groups of challenges. One is that there’s far more competition than there was 50 years ago. I mean, one of the few things that you could do would be to go to a symphony concert or go to a play, but if you were in even a moderate size community, there was one orchestra, there was one theater company, there was a part-Time ballet, so you could go to everything and it worked. That’s no longer true. Well, especially in a city like New York where I think I’ve been to six things in the past two weeks of all different theater music. So there’s a lot of competition for your attention and especially if it’s something you aren’t familiar with. And that’s the bigger challenge is that people are growing up today without the background in classical music.

Erik Gensler: Leonard Bernstein’s not on the TV. Beverly Sills is no longer on The Tonight Show.

Jack McAuliffe: Ola Renee Fleming was, but not singing opera.

Erik Gensler: Well, the Tonight Show is not watched by nearly as many people either. That’s probably the bigger point.

Jack McAuliffe: People are coming to it without the familiarity. So we really, it’s now not about, our job is not just to make the decision to buy the ticket. We have to make them to make the decision to consider a symphony concert and then which concert and why that concert. And also, it’s a difficult decision because it’s not an impulsive one. One never makes it by one or one. Seldom makes it by oneself once usually comes with someone else. So not only do you have to say, I think I’d like to do that, but then you’ve got to go to your spouse or your friend or whatever else and say, Hey, you want to go here, the Philharmonic tonight, and then you have to sell them. Or maybe they sold you. There is the concept of the drag along.

Erik Gensler: I’m the drag along often.

Jack McAuliffe: Then all of a sudden the venue changes and the other person becomes the drag along and we need to focus on the drag along because we can convert the drag alongs.

Erik Gensler: Absolutely. Well, I always say even if every single person bought a ticket online to your website, that’s probably only 50% of the emails captured in the venue. What are you doing to capture more emails and social media follows at your venue because you got to get the drag alongs.

Jack McAuliffe: Yep. Really good point. Yeah, going to note that.

Erik Gensler: So I mean, orchestras a while ago, it was big news that orchestras were failing and orchestras were going bankrupt. When you look at the overall health of the industry, have it been swinging in a more positive direction?

Jack McAuliffe: I think it’s been precarious as long as I’ve been in it. We keep finding new ways to get there. I think one of the more telling things right now is that we’ve been looking at the percentage of expenses that are covered by ticket sales and the percentage that are covered by contributions. And 10 years ago, for the very large budget orchestras, about 70% of the expenses were covered by sales and 30% by donations in the last decade. That is pretty well flipped with. And it isn’t that sales have gone down, it’s that expenses have gone up and sales haven’t.

Erik Gensler: Well, I’ve really enjoyed this conversation and we’ve come to the last question, and this is your CI to Eye moment. If you could broadcast to the executive directors, leadership teams and boards of a thousand organizations, what advice would you give them to help them improve their businesses?

Jack McAuliffe: I knew you were going to ask that question, but I didn’t know what it would be exactly. So I think it goes back to sort of what I started, that we’re not a transactional business. We’re not a retail business. We’re not selling tickets. We’re about building relationships. And I would just say everything you do, you should think about how this relates the music to the audience and what you can do to strengthen that relationship.

Erik Gensler: That’s great. Thank you so much.

Jack McAuliffe: Thank you. I’ve thoroughly enjoyed it. Erik,

Erik Gensler: Did you enjoy the podcast? Please join Capacity Interactive on email and on Facebook so you could be the first to know when we release new episodes. You’ll also get content all about digital marketing for the arts, and you’ll be the first to know about our webinars, workshops, and our annual digital marketing Boot Camp. Thanks for listening.

About Our Guests
Jack McAuliffe
Jack McAuliffe
COO, The League of American Orchestras

Jack McAuliffe is an organizational coach for arts organizations. He’s had a long career in arts leadership including serving as the first Director of Marketing at the Kennedy Center and as the COO of the League of American Orchestras, where he commissioned several audience engagement studies including the legendary Orchestra “Churn Study.”

Read more

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