Patron Loyalty 101

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Guest Post By: Amelia Northrup, Strategic Communications Specialist at TRG Arts

Audience development. Usually when you hear this arts industry buzzword, it’s all about finding new audiences—everyone wants to develop a larger audience, right? However, audience development is not only about finding new audiences, but also retaining and deepening the commitment of the patrons you already have. Out of the two, the second will nearly always give you a larger return on your investment.

That’s the goal of patron loyalty programs—retaining and deepening the commitment of existing audience members.

Don’t get me wrong; new audiences are crucial to sustaining the arts. But when ongoing TRG research shows that anywhere from two-thirds to 80% of new audience members don’t come back, the real problem becomes clear. It’s retention. That’s what will get those larger audiences in the end. As the Girl Scout saying goes: Make new friends, but keep the old.

We will discuss all this and more during our chat on July 20 at 2pm EDT.

What exactly is Patron Loyalty?

What specifically are we talking about when we say “patron loyalty”? Let’s break it down:

Patron: anyone who has a transaction with an arts organization

Loyalty: developing a longer, stronger commitment to your organization

Patron loyalty is the discipline of customer loyalty specific to arts organizations. The for-profit sector spends millions of dollars determining ways to make customers more loyal—and they’re not alone. Smart arts industry practitioners have also turned their focus to loyalty and retention. They measure the lifetime value of their customers. They plot out which offer to make to which customer. Why all the effort? They know how valuable loyalty can be.

Why is Loyalty so important?

When you look at the numbers, it’s easy to see how valuable loyal patrons are to an arts organization. TRG does just that when we analyze loyalty for an organization. Patrons naturally fall into three different categories:

  • Patrons begin as a “Tryers” when they have their first interaction or transaction with the organization. About 90% of the typical arts organization’s database is made up of Tryers.
  • Patrons who come back again as a repeat buyer, multi-buyer, subscriber or member-based frequent attendee are what we call “Buyers”.
  • When an organization retains Buyers and cultivates them, they can become an ongoing, engaged investor—an “Advocate.”

You can then determine, on average, how much a patron in each category is worth over a set period of time. Below is an analysis that TRG spotlighted during a webinar with 5th Avenue Theatre.

The numbers in the pyramid are the numbers of patrons in each category. The dollar amount next to the category name is the average amount that a patron in that category was worth to the organization over 2 years. The percent is the total proportion of revenue each category represents. What you see in the pyramid is typical—the value of a patron increases 10-fold at each level.

What does this mean to you?

How can arts managers orient their work to promote loyalty? When you examine all the tools in your arts marketing toolbox, some are better than others at promoting loyalty—and some can be tailored to do so.

Data should be your #1 priority. Clean, accurate data can tell you who your most valuable patrons are and illuminate how to deepen their loyalty. Systems that capture every interaction—ticketing, donations, educational programs, etc.—are best. Patrons can interact with an organization in many different ways and you want to know their total investment across all categories. Their total value can add up in ways that may surprise you—outside of the traditional single ticket buyer, subscriber/member, or donor categories.

More communication, more directly. In your budget and timetables prioritize targeted, direct communications to your existing patrons over mass media advertising campaigns. That means postal mail, e-mail, telemarketing, and targeted online ads. If your data is clean, you’ll be able to target those most likely to respond. Dumping some of the mass media and reallocating the money to communications with existing patrons will result in stronger relationships with your most value patrons and in turn, more revenue.

What about social media? By all means, use social media. People now expect your organization to be there. But see it as a medium for customer service and patron interaction. Post messages that people will respond to, share, or click through, more than simply broadcasting ads. Strive to make it personal. And, if possible, try to log important interactions in your database.

Box office=big opportunity. Every time someone calls the box office, there’s opportunity to deepen loyalty. The database can be a big part of this. Knowing all of a patron’s interactions can point box office staff to the right next step for the patron—whether it’s buying more single tickets, upgrading their subscription or membership, or making a donation.

The goal of our discussion on the 20th is to have an open dialogue about how practitioners are approaching loyalty. I’ve structured the questions to facilitate the sharing of your ideas—what’s working (and what’s not), how your organization strategizes around loyalty, and the trends you’re seeing in the field.

  1. Does your organization focus more on new patrons or patrons you already have and why?
  2. What outcomes do you look at for measuring loyalty? (renewal rate, new donors, number of upgrades, etc)
  3. How do you motivate first-timers to come to your organization again?
  4. What loyalty programs have you developed to retain or upgrade subscribers, members and/or donors?
  5. How do you feel about loyalty programs like the subscription and membership model?
  6. How do you motivate subscribers/members to become donors?
  7. Which arts organization has a loyalty program you admire and why?
  8. What’s the best idea for promoting loyalty that you’ve used or heard about recently?

About Amelia Northrup

Amelia Northrup is the Strategic Communications Specialist at TRG Arts. She serves as a writer and editor for the firm’s consulting projects, Data Lab research and analytics projects, and a contributor to TRG’s knowledge center and blog. Additionally, she is a member of the artsmarketing.org Advisory Committee. Formerly of the Center for Arts Management and Technology, her responsibilities included writing for the Technology in the Arts blog, as well as authoring white papers and reports. She has presented panels at the Performing Arts Exchange, TCG and National Arts Marketing Project Conferences.

Previously Amelia has worked for Kansas City Repertory Theatre and the Wolf Trap Foundation. She graduated in May 2011 with a Masters of Arts Management from Carnegie Mellon’s Heinz College of Public Policy and Management. She holds degrees in Vocal Music Performance and Communications from University of Missouri.

Follow Amelia on Twitter , connect with her on LinkedIn and read TRG blog, Analysis from TRG Arts.

About TRG Arts

Since its founding in 1995, TRG Arts has helped increased patronage and revenue for hundreds of arts and cultural organizations throughout North America. TRG’s data-driven counsel and data management services have generated for clients double-digit growth, increased demand for their programs, and improved returns-on-investment. The firm’s analysis from client experience and patron behavior research is reported weekly online and in conference presentations nationwide.

Join The Discussion!

  • Tune in on Friday, July 20 at 2:00 – 3:00 p.m. Eastern (6:00 p.m. GMT) to participate in the seventh round of #artsmgtchat.
  • Follow @TRGArts and @artsmgtchat for questions. You can use TweetChat to follow the discussion. Make sure you use the hashtag #artsmgtchat to be included in the discussion.
  • If you are new to our Twitter chat, please check out our Twitter Chat 101 guide.
  • Bring a colleague to this Friday’s #artsmgtchat.
  • Tweet this post and share with friends on LinkedIn and Facebook.

3 thoughts on “Patron Loyalty 101

  1. As you know, I’m studying audience engagement with symphony orchestras and the classical music concert experience. I think this (audience development – growth AND loyalty) is so important, not only for the organization, but also for the patrons. Younger and contemporary audiences seem to be looking for these relationship building opportunities, personable interaction, and authentic experiences.

    I’m looking forward to discussing patron loyalty further on July 20!

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