Posts tagged ‘Loyalty’
A colleague Timmy Metzner of The Pricing Institute put me on to this interesting idea by asking the question “Wouldn’t it be interesting to see what would happen if arts organizations tried something similar?“
The article 6 Washington DC Cafes Team Up For Disloyalty Program discusses a scheme that in effect honors loyalty to competitors, not return patronage of your establishment.
The scheme is called Drink DC Coffee and the tag line says it all “DISLOYAL IN THE DISTRICT“
“DC’s coffee community is a friendly, thriving one; area baristas have fun serving customers and each other. A scene like this deserves not a loyalty card but a disloyalty card, which encourages people to visit different neighborhoods, try coffee from different roasters each shop presents on their menus, and meet some awesome coffee professionals.“
I love it – collaboratively they are encouraging repeat visitation of their district and the coffee consumption in general. Potentially at the expense of their brand loyalty, but taking a larger view of consumer behaviour, more inkeeping with the oft used phrase ‘cultural omnivores’ (In Praise Of Cultural Omnivores or The Rise of the Cultural Omnivore 1964-2004).
This got me thinking. How often do you hear people talk of audience development and their interpretation is about finding new people to attend their event/s and binding them to attend their events in the future? Put simply taking a ‘brand’ only approach to audience development, not a generic or service-form approach to audience development.
Sustainable audience development is about losing the brand competition perspective and taking a larger view based on a generic or service-form definition of the market.
An interesting comparison of the reasons why customers vs donors abandon your organsation (in this case a charity) which carries relevance for other noprofits such as arts oganisations. A scarey statistic is highlighted in Mr and Mrs … Kiss Of Death on the blog The Agitator
“53% of donors leave due to the charity’s lack of communication.“
I suspect the issue may be larger than just lack of communication. Loyalty is also compromised by communication that is: impersonal, unpersonalised (that is more than just mail merged <Title> <Surname>), untargeted, untimely, incorrect, irrelevant, and even (as a contradiction) … too frequent.
Stalker award to Cellarmasters Wine Club :-(
A colleague, Tim Baker posted this article on the Thinkaboutpricing LinkedIn group. Jez Butterworth’s The River prompts fears of rise in paid queuing.
In 2012 it does seem anachronistic that the Royal Court Theatre seems to be supporting the idea that “… the queue is the happiest and fairest medium we have found so far … some things should perhaps be considered sacrosanct.“
For Jez Butterworth’s new play, The River with Dominic West at the Royal Court tickets will only be available to those who queue at the venue on the day of performance. That means no advance booking in person, by phone, by mail or online.
Tourists will be OK as they have time on their hands and it can be a unique new ‘London experience’ – queuing in the rain. Touts will be OK as they can pay people to stand in queue to buy the allowed two tickets and hand them over to touts (or touts will bid to buy) to pass them on to the market with “cost of sale” and profit?
In addition to disadvantaging the disabled, regional audiences will miss out (unless they make an early trip to London on the off chance that they will be lucky for later that day) and it would appear to disadvantage the employed with the two access options only in person at the theatre in queues at 9am and 10am?
I can’t help but feeling suspicious that given it is only a 85 seat studio, the queue is a made to order publicity stunt. It also seems to be a ready made publicity opportunity that the Royal Court Theatre can transfer it to the larger Jerwood Theatre downstairs with 300+ more seats and be seen as the good guys giving everyone a chance to see it.
But, will the existing audiences of the Royal Court see queuing as “fair”, I am sure they will not be “happy” that their previous patronage will account for nought when they try to see what is being pushed as the next ‘must see’ show.
As described this innovative access scheme does not appear to acknowledge or reward valuable relationships like friends, donors and other supporters in the form of sponsors, funders, benefactors, foundations, members and associates? Friends membership includes the stated benefit “exclusive priority booking”, I do hope they also received their other benefit of “priority advance notice” of this policy.
There are three shows ‘sold out‘ already, one month before the show even starts (or ‘bookings’ open), so maybe some lucky ones (255) are being looked after. But again, I would not be “happy” or see it as “fair” if I had travelled down to London to queue that morning to see the show on one of those nights.
The notion of treating the customer journey as an ongoing cycle resonates for me in Why Experience is Key to Customer Loyalty. The cycle puts wheels (oops sorry) on the notion of maintaining and building ongoing loyalty. The more times successfully around the journey cycle imbues a momentum of loyalty and that great human trait of habit can take hold. (By the way, I am not sure what Lego has to do with it.)
I have touched on the journey idea before in Mapping The Customer Journey.
It is interesting the concept of ‘fairness’ that is introduced by Valeria which is put in context in her linked post re: Lufthansa as “transparency”. This reminds me of an article Tim Baker of Baker Richards and The Pricing Institute recommended written by yet another Tim, Tim Hartford The Undercover Economist, Enough Whingeing About Price Gouging. Tim discussed the concept of dynamic pricing which is the darling of many an airline’s Revenue Management strategies. After mooting dynamic pricing as a way of better managing the finite supply of Easter Eggs to less garden watering bans to the need for a lottery to allocate Olympics tickets, one of the comments by a reader raised a very interesting extension of dynamic pricing that highlights the question of fairness. We are used to passengers paying very different prices for an airline seat depending when it was bought in response to demand and the finite supply. Just imagine the extension of dynamic pricing to the equally scarce commodity of storage for hand luggage, yes you can take on that hatbox madam, but it will cost you $100 extra. Whoohoo, that would cause some air rage (well ground rage ) and accusations of price gouging, before they got airborne. BUT it would help solve the problem of luggage locker hogs on planes and provide space for the rest.
Another poster, Joanna mentioned an application of dynamic pricing that was new to me, street parking in San Francisco. At peak times around special events parking charges on meters are raised in response to the increased demand and finite supply. The result is that if you want a car park you can find one … but you will pay a premium for the privilege. That reminds me of the car park outside a tax office somewhere in Scandinavia (I think) that wanted to ensure that the bays were only used for dropping off tax returns, not parking. Rather than higher charges and fines, they used the Nudge: you could park as long as you liked as long as your car lights were left on, otherwise you would be towed away. Guess what problem solved.
Facing a funding shortfall in 2009/10, 2010/11 subscriber were approached to become “Super Subscribers” and make a donation to “enhance their theatre-going experience“.
This is explained as follows: “Instead of requesting help for the organization, the letter invited patrons to enhance their theater experience with a tax-deductible gift that included experiential benefits: a backstage tour, a one-time guest pass to the major donor lounge, and a show poster of the subscriber’s choice from the upcoming season. Their gift would also support scholarships for the 5th‘s upcoming summer camps, but the primary focus of the ask was on the subscriber’s experience.“
40% of donations came in response to just the direct mail campaign without the need for any follow up calls.
The campaign brought in 453 gifts and a total of $51,189 at a 10% cost-of-sale and analysis by TRG was very interesting:
- “Most Super Subscribers were relatively new to subscribing. 65% included first timers, subscribers of five or fewer years, or patrons returning after letting their subscription lapse.
- Super Subscribers were primarily new donors. 70% had no previous giving history; 30% were lapsed donors.
- Super Subscribers were twice as generous. The campaign’s average gift size was $113, more than double 5th Avenue prior new gift average of $53.73.”
A colleague, Jerry Yoshitomi of MeaningMatters, put me on to this article. I find this quite exciting for the future of Audience Development and the development of meaningful consumer models – Voter data crucial to Romney’s victory
No, I am not going to bore you with a regurgitation of the seemingly endless US election process ;-)
I am, however going to wax lyrical about the use of data to segment prospects and inform relationship marketing.
“A central factor in Mitt Romney’s impressive win in New Hampshire was a sophisticated and relentless voter contact program that locked in supporters early and turned them out to the polls.“
Romney’s team “mined reams of consumer information — from the number of purchases voters made at Williams-Sonoma to their range of financial investments — to build a model that would allow them to find and identify potential supporters.“
They used data to prioritise prospects and then implemented an ongoing structured program of communication developed a loyal core.
“Romney operatives expanded a list of 5,000 solid supporters in New Hampshire from his 2008 campaign to more than 25,000 whom they believed they could rely … while also turning out with friends, relatives and colleagues.“
Just imagine if we had audiences on which we could rely and they turned out with friends, relatives and colleagues. Although I am not sure that we would aspire to this approach in the arts?
“In the end, the Romney team credited its successes to persistence — finding those undecided voters leaning their way and just inundating them,” said Romney’s New Hampshire director, Jason McBride.
Let’s hope that the arts can learn from this constituent development and use similar data mining tools for substantive audience development. Maybe we can then put to bed the accusations of nay-sayers like the recalcitrant Eric Pickles who variously called audience development an “non-job” or a “pointless post”.
Of course, the first thing to decide is how you measure success.
It is often suggested that a loyalty program is working if it accomplishes at least one of two objectives:
- clients are either holding onto their customers longer or,
- are getting them to spend more with the brand.
Kobie Marketing believes that there is only one variable for measuring loyalty – engagement.
“Engagement is a minimum threshold variable that can measure individual member’s contributions to the program’s bottom line. In other words, if a member has an actively engaged relationship with the brand and program, we should measure their contribution. If the relationship is passive, we say don’t include them in positive performance metrics.“
McKinsey in The Consumer Decision Journey discusses these different kinds of loyalty – active and passive:
“Of consumers who profess loyalty to a brand, some are active loyalists, who not only stick with it but also recommend it. Others are passive loyalists who, whether from laziness or confusion caused by the dizzying array of choices, stay with a brand without being committed to it. Despite their claims of allegiance, passive consumers are open to messages from competitors who give them a reason to switch.“
This suggests that we may need the reality of a harsher measure of loyalty in the arts and entertainment to move beyond the false expectations of a fickle passive loyalty. Much of the shadow audience can only be considered passively loyal and the audience attracted to one of your shows only when it is a hit is at best – passively loyal. Actively loyal supporters are more valuable as they will support the challenging rather than just the easy or safe bets.
I have seen it quoted we should measure audiences not by tickets, but by customers. The view above adds another qualifier to measuring audience loyalty to only actually counting those actively engaged.
A nice reminder as to what loyalty is and what really encourages it, from Kathy Sierra on Hugh MacLeod’s GapingVoid.
Some other thoughts on the subject of loyalty:
“Repeat business or behavior can be bribed. Loyalty has to be earned.” – Janet Robinson
“You don’t earn loyalty in a day. You earn loyalty day-by-day.” – Jeffrey Gitomer
And on the other hand, from the man who brought you the Net Promoter Score:
“Loyalty is dead, the experts proclaim, and the statistics seem to bear them out. On average, U.S. corporations now lose half their customers in five years, half their employees in four, and half their investors in less than one. We seem to face a future in which the only business relationships will be opportunistic transactions between virtual strangers.” – Frederick F. Reichheld The Loyalty Effect