New Haven Symphony Orchestra Reduces Churn

For decades American symphony orchestras were stymied by a phenomenon called customer churn. Orchestras were successful at attracting newcomers to concerts, but struggled to get them to come back for a second concert or sign up for a multi-concert subscription. Studies showed that 90% of first-time concertgoers never returned and 60% of occasional concertgoers don't purchase tickets the following season. This is the same customer churn phenomenon that afflicts businesses dependent on repeat-purchases and subscriptions, such as mobile phone operators, cable TV companies, airlines, and banks. Each of these businesses must invest substantial marketing dollars to constantly attract new customers. As a further complication, not-for-profits found little success in fundraising appeals to large groups of one-time attendees.

The New Haven Symphony Orchestra (NHSO) also faced an industry trend that saw subscription-base declines in favor of single ticket sales for nearly 25 years. In 2007, in response to this trend, a $2-million-dollar customer-based strategy initiative conducted pro bono by the consultants at Oliver Wyman in collaboration with the nine top US symphony orchestras was conducted. The initiative was spearheaded by Jack McAuliffe of Engaged Audiences LLC.

The study¹ found that in order for orchestras to reduce churn they must fundamentally change how they think about their customers, product, and marketing. They need to focus on retaining first-time concertgoers, while continuing their usual efforts to acquire new customers and to keep their subscribers engaged. To retain users, orchestras must strive to provide a seamless and social first-time experience resulting in the customer having a good time. Immediately after attending the concert the customer is sent a survey which serves to engage the user and invite a future relationship. Next, the first-timers receive an irresistible promotional offer that encourages them to buy another ticket or two at a significant discount. Only after they purchase multiple tickets are they approached to commit to a subscription. Persuading first-time ticket buyers even once or twice during a season increases their likelihood of purchasing tickets for the following season from 10% to 50%.²

While this acquisition strategy is in force, new users are not approached to support fundraising campaigns (a significant change as for not-for-profits usual practice of asking for donations early and often in the relationship.)

Audience Growth Initiative at the New Haven Symphony Orchestra

During the 2010-11 season the NHSO engaged the expertise of Jack McAuliffe who was a catalyst in the Wyman study bringing with him nearly 35 years of arts marketing expertise. Throughout our history, one of the NHSO's greatest strengths has been our high renewal rate as patrons who have been with us for at least 3 years, have a renewal rate of 85%. Therefore, we knew if we could get new users to become repeat buyers, they would be highly likely to continue attending NHSO concerts long-term. We were a natural fit for the Audience Growth Initiative! With Mr. McAuliffe's guidance the NHSO follows a three-year on-boarding initiative that attracts new users at deeply discounted prices (each year the discount is slightly less) until new users become full-fledged subscribers.

Year One 2010-11
Compared to previous years, Year One of the Audience Growth Initiative was a MAJOR success. The NHSO saw 588 new subscribers across all venues due in large part to the deeply-discounted first-time offer, the introduction of telemarketing "asks" to our new audience, and better segmented mail lists purchased through a mail house.

Year Two 2011-12
Although subscriptions declined at Woolsey Hall compared to Year One, but the total acquisition continued to show an increase in long-term audience as we saw a increase in subscriptions in our Hamden and Shelton venues. Additionally, in Hamden and Shelton our "sophomore" retention rate was in keeping with the Wyman study (20-30%) with 26% of first-timers returning! Best of all, single ticket sales increased in ALL venues resulting in overall audience growth.

Year Three 2012-13
In Year Three we hope to see continued growth by attracting more first-timers, and continued retention of sophomore and junior buyers. We plan to leverage major box office successes by programming popular classical favorites as we've routinely seen our largest audiences when we perform major works (e.g. Beethoven's Fifth and Ninth, Mahler Seventh). Additionally, front-loading the season with an extremely popular work (e.g. Carmina Burana) helps attract ticket buyers who attend opening night to become repeat users and continue their participation throughout the season.

References:

^1,2Orchestra Audience Growth Initiative (aka Churn Report) by Oliver Wyman (facts and stats)

Stalking the Culturally Aware Non-Attender by Rebecca Winzenried

The Price is Right by Rebecca Winzenried

Relationship Status (Patron Growth Initiative) by Rebecca Winzenried

Special thanks to Nicole Gallego with the New Haven Symphony Orchestra for sharing this piece.