Audience Development: The Long Haul Model

A New Paradigm that Solves the Problems of Audience Attrition, Churn, and Aging

Aubrey Bergauer
Aug 14, 2017 · 19 min read
Three years ago, the California Symphony changed its approach to audience development, employing a long-term strategy that resulted in increased concert attendance, audiences getting younger, and more donors.

The problems in the orchestra world of declining audiences, aging audiences, and audience turnover have been well articulated, belabored even. In response to these problems, we as a field often talk a lot about incremental gains and successes such as an orchestra that sold 5% more tickets than last year or trimmed expenses enough to balance the budget. Make no mistake, these are big successes under the current model, but when we know as an industry that our fixed costs will continue to rise and outpace the operational tweaks and incremental revenue gains we can achieve, the model needs to be reexamined. This is a post about solutions.

To give away the end of this story, over the last three years, after a calculated change in approach to audience development strategy, the California Symphony has seen profoundly different results from the national trends for orchestras:

Through reconstructing a new audience development strategy, in addition to the results above, the California Symphony grew its operating budget by 40% over this time period and ended this last fiscal year with a 10% surplus.

This post discusses first what the current/typical audience development model looks like, followed by reasons why organizations do it this way (spoiler alert: there is a long list of explanations in support of the traditional approach, which are barriers to change for many organizations), and ending with counter points on how and why changing the model is worth it, namely because there is big money on the table, which in turn allows us to better serve our mission.

“When we know as an industry that when our fixed costs will continue to rise and outpace the operational tweaks and incremental revenue gains we can achieve, the model needs to be reexamined.”

What Audience Development Typically Looks Like

The audience development free-for-all model that is the current approach for most arts organizations.

To a degree, the current model works. Organizations do make money, and a lot of it, this way. But when 90% of first time buyers don’t come back — a well-documented national stat from Oliver Wyman’s “Churn Study,” made famous by former head of marketing at the Kennedy Center and later Vice President of the League of American Orchestras Jack McAuliffe — this is a problem. And when first year subscribers — a critical group because we know that being a subscriber is the number one indicator of future donation proclivity — are the hardest segment to renew, averaging a 50% or less renewal rate for many organizations, that’s a problem. It’s a giant pipeline problem we have created for ourselves.

What We’ve Done

The traditional audience development model versus the model the California Symphony reconstructed three years ago, offering one next step (and only one) to every audience segment in order to maximize revenue over time. Most arts organizations state they would like to see this type of logical customer progression, but almost none deliberately limit the next step offered to each customer segment.

In the latest issue of Symphony magazine (summer 2017), The League of American Orchestras said it best: “Surely, if the military is learning how to become flexible and adapt, orchestras can as well. To do so, they need constantly updated sets of tools and assumptions.” That’s exactly what this is all about.

Why the Industry Does It the Current Way

1. Revenue attached to old ways. Again, organizations do make money the current way. Some people do subscribe after attending one or two performances, and some people do make a donation when they’re called. And when we are dealing with a pipeline problem, it can be painful to purposefully limit that pipeline at first, such as when you’re pulling a list for a direct mail appeal — let’s say for a fiscal year end campaign when all the low hanging fruit for donations has already made their annual gift — and you know how many more people you could add to that mailing list if you pull recent single ticket buyers. It’s tempting to add those people to the prospect list because some will respond, and those moments make it hard to think about how we’re contributing to that 90% no-return rate because we’re making the wrong ask too soon.

2. Wrong metrics. Another reason change feels risky is because we often measure the wrong things. A bigger database is not the right metric, as an example. Bigger databases do not implicitly mean we are serving more people; a bigger database often means we serve a lot of people once, and that’s bad when our jobs are to cultivate loyal lovers of our art form. In the example above, a larger mailing list is the wrong measure. Looking at the response rate would be a healthier gauge of success (more on that below). Bigger is not always better, and bigger is almost always more expensive (more on that below as well).

“Bigger databases do not implicitly mean we are serving more people; a bigger database often means we serve a lot of people once, and that’s bad when our jobs are to cultivate loyal lovers of our art form.”

3. Short term emphasis. True especially post recession, there is incredible pressure to run our organizations with short-term outcomes. When I was first brought in to the California Symphony to lead a financial turnaround in 2014, one major institutional funder said to me that if we did not immediately have balanced budgets for the next two years, consecutively, then they would pull their funding. And they said this knowing the organization was in crisis and knowing I was implementing a three-year turnaround plan (largely built on the audience journey strategy outlined herein); nonetheless, the directive was firmly to balance the budget in one year. (Side note: we did it, but talk about pressure to NOT take a long-term approach to sustainability!) I pick on that one funder, but the truth is nonprofit leaders see that kind of pressure a lot. Not just from funders, but from watchdog organizations like CharityWatch and GiveWell, etc. And from our boards as well. When the budget does not balance, how often does the board want plans and ideas that promise a quick fix? By the way, if there truly was a quick fix (besides cuts, which are the epitome of a short-sighted solution), wouldn’t we all have implemented that fix a long time ago? The short term pressure is real.

4. No culture for failure. This stems straight from the point above. We all have lean budgets with little to no room for any experimentation to try new things. This isn’t because no one wants to experiment, or find a new model that we all know we need, it’s because we usually must have every penny go toward everything else we’ve committed to do as an organization. We all have top notch artists, quality programming, and education initiatives that make a difference. Failure to fund on any one of these fronts because an experiment did not result in a profitable outcome in its first iteration is not an option. As arts organizations, we need money in an organizational culture with no real appetite for failure — or innovation, or even delayed gratification — because a lot of us simply cannot afford to have a miss.

5. Don’t know how to do it differently. Having siloed departments — particularly siloed marketing and development departments — and a focus on acquisition (both patron and donor acquisition) make it so that our staffs don’t always intuitively know how to do work a different way. We are taught that acquisition is key, and in a broken system, it is, because we have to fill the declining audience and short-term revenue voids somehow. We are taught, in different words, to treat new patrons like a land grab. “Who ‘owns’ those names?” we ask when trying to figure out a way for marketing and development to play in the sandbox together, when the reality is that’s the least customer-centric question we could be asking. Patty McCord, who served for many years as Chief Talent Officer at Netflix, recently said (on the FRICTION podcast with Stanford Professor Bob Sutton) about maintaining a customer-focused culture, “Siloes are just gonna slow you down…Companies that are really, truly successful are collaborative and solving for the customer, and you can’t solve for the customer in siloes. You can’t do it.” As an industry whole, we sort of know only one way to do audience development and don’t really know how to do it any differently.

“As arts organizations, we need money in an organizational culture with no real appetite for failure — or innovation, or even delayed gratification — because a lot of us simply cannot afford to have a miss.”

6. Don’t have the discipline. Maybe this is in the category of “Don’t know how to do it differently,” or maybe it points back to an emphasis on short term revenue, or even not having a culture for failure. Back to the example of wanting to run that fiscal year end appeal mailing list, when we first instituted this new strategy, we could have mailed to twice as many people if we had included recent single ticket buyers, and we all know that some of those people would have made a donation. In a time when we were digging ourselves out of the ditch financially, it was incredibly difficult to have the discipline to say, “No, now is not the right time to be making a donation ask of this group. Instead, we will wait until people from this group are renewing subscribers when we know they are times over more likely to respond, give more, and ultimately renew that gift. We’re vying for a higher lifetime value of these patrons.” Also, having discipline takes time, and that’s a currency we don’t really have, which brings us to last reason we keep doing things the current way.

7. Don’t have time. We often don’t have time in two different ways: 1) no time to wait for results of a longer term strategy, and 2) no time in the work day to even think about changing the status quo. To the former, it takes a while for the full process of having a first time attendee come back as a repeat buyer, then get converted to a season ticket holder, and then to renew that subscription, and then finally to have the chance to solicit them for a donation. For the marketing folks, those first few steps from new attendee to subscriber can happen in a year or so if all goes according to plan (which when you are disciplined, it does nicely play out that way more often, but I’m getting ahead of myself). For development folks, however, that’s at least two years of patiently waiting to get their hands on those prospects, which is very different than the current approach. To the later point, changing the approach means time in the day is spent differently — not adding more to the plate (which feels impossible at times), but mixing up that plate a bit.

So when that person at the public media conference asked why everyone isn’t doing things differently like the California Symphony, I actually laughed a little. “You think public radio is slow to change?” I said, “NPR is not even 50 years old. Try working for an orchestra — we’re working against centuries here!”

A New Way is Worth It: Why

More revenue.

Contributed revenue follows suit despite us actually soliciting fewer people than before. In fact, the California Symphony’s percentage of subscribers who also donate actually surpasses the national average: 28% nationally versus 52% here. If we take out first year subscribers from that count since we don’t solicit that group, this means 71% of all season ticket holders who are asked make a donation — two and a half times the national average. Total contributed revenue has grown 41% for us (national average is 20%) in conjunction with nearly quadrupling the number of donor households. One last data point: after adjusting for inflation, the national average for total income growth 2010–2014 is 5%; yet from 2014–2017 and also adjusted for inflation, the California Symphony has grown total income by nearly seven times that at 34%.

It’s worth mentioning that we’ve realized expense savings, too. Now that virtually every mailing list for marketing and fundraising appeals is smaller and more targeted, it simply costs less. We now put that money toward other things, like talent development and innovative programming.

Better metrics.

A New Way: How

Take a long term view.

Less lean budgets.

Structure the org so people know how.

As a tactical side note, for staffs that are reading all of this and wanting to know more about how exactly to implement the “only one next step for each segment” approach, see as a starting point the posts on what we do to entice first time buyers to return and multi-buyers to become subscribers, and how we treat first time subscribers versus renewing subscribers versus new donors. We also created a new position to oversee marketing and low-level annual fund functions because we were so serious about removing the siloes.

Spend time differently.

Final Thoughts

An added benefit in tandem with the revenue gains the California Symphony has seen due to reconstructing the audience development model — and also a direct result of the UX work we’ve done on audience experience, which has served to strengthen that first timer foundational level of the pyramid—is that our audience is getting younger. The graphs below show that among subscribers and single ticket buyers, fewer people are in the 65+ category, about the same percentages are ages 45–64, and more people are in the under 45 crowd.

So there you have it: through a new model focusing on the customer over the long haul, an orchestra has realized an increase in subscribers, a growing single ticket buyer base, more donors, and an audience that’s getting younger. Just like the League said in that Symphony magazine article this summer, orchestras can and do adapt, and all we need is an “updated set of tools and assumptions.” I hope this post helps to do exactly that.

UPDATE: Follow-up posts on the Long Haul Model and how to implement it at your organization can be found starting here.

About the Author

A graduate of Rice University with degrees in Music Performance and Business, for the last 15 years Bergauer has used music to make the world around her better, through programs that champion social justice and equality, through marketing and audience development tactics on the forefront of trends and technology, and through proving and sharing what works in the rapidly changing landscape of funding, philanthropy, and consumer behavior. If ideas are a dime a dozen, what separates Bergauer is her experience and record of impact and execution at institutions of all sizes. Praised for her leadership which “points the way to a new style of audience outreach,” (Wall Street Journal) and which drove the California Symphony to become “the most forward-looking music organization around” (Mercury News), Bergauer’s ability to strategically and holistically examine and advance every facet of the organization, instilling and achieving common goals and vision across what are usually siloed marketing, development, and artistic departments, is creating a transformational change in the audience, in the office, on the stage, in the community, and is changing the narrative for the classical music industry.

Aubrey Bergauer

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Working to change the narrative for orchestras. Executive Director of the California Symphony.