The Long Haul Model: Operational Implementation Part 1
A Series for Those Who are Serious About Changing the Narrative
Since publishing The Long Haul Model in August, I’ve received comments, responses, tweets, emails, and phone calls from people at organizations of all sizes across multiple arts disciplines, here in America and abroad. In 48 hours after going live, that piece was shared so quickly and widely it became the second most read post I’ve written of the last year, and is still getting visits every day, soon to become the most read article I’ve ever published. I tell all this to say that there are people literally from all over the world who believe there must be a better way to develop and retain audiences, to successfully defy the declining trends so common to the performing arts. And while I’m not the first one to talk about audience development in this way (there have been champions of deliberate audience retention for years, including stalwarts I cite in my original post), the strategies I write about are getting traction here and now, mostly likely because we’re not just talking about this, we’re actually doing it at the California Symphony — and it’s working.
Since almost every day new inquiries are coming in, mostly about the operational implementation of the model, I decided to expound on these questions because 1) I want other administrators to feel less risk averse about implementing changes that we know we need, especially when they’ve proven successful elsewhere, and 2) I want to empower us all to stop thinking like we’re locked in to one way of running our organizations where we just can’t tread water fast enough, and instead claim the money on the table so we can all better serve our missions.
“There are people literally from all over the world who believe there must be a better way to develop and retain audiences.”
This series organizes the questions I’ve been receiving into three parts all about the operational implementation of The Long Haul Audience Development Model:
- PART 1 (this post): Transition, Change, Pain Points or Fear Before and During Implementation?
- PART 2: Scalability in Organizations Large and Small, and Why Does HR Matter in this Discussion?
- PART 3: Where to Start?
What are the Non-Technical Challenges of Implementation?
In parts 2 and 3, we’ll cover several tactical and technical elements of operational implementation. First though, we’ll look closely at three challenges (i.e. “changes” is perhaps the more accurate word, but change is hard, especially in our industry that has a built-in slowness to adapt) that must be addressed as an organization in order to transition to the new model.
1. The Board. In the original Long Haul Model post, I talk about an emphasis on short term revenue as a barrier to change. This emphasis is led by the Board. This is understandable when you consider that almost all of our board members come from for-profit companies, whether they are actively working or now retired, and corporations — especially publicly traded companies — have an incredible pressure to serve the short term. They have to release quarterly earnings statements, subject themselves to analyst projections, deliver results that meet those expectations, and ultimately serve their shareholders who absolutely want that company value to rise, rise, rise. Our board members are simply doing what they know how to do, what their entire very successful careers have demanded of them. However, non-profits have a huge advantage over this for-profit mentality: we don’t serve shareholders; we serve a mission. We don’t release quarterly earnings (publicly, that is); we release an annual tax return and audit, and let’s be honest, for more and more arts organizations, those financial statements are becoming harder and harder to paint a thriving picture, which goes back to needing to believe there must be a way to change this narrative. We need our boards to believe this too, and their buy-in to a longer-term strategy is critical to an organization-wide change in building audiences and revenue. P.S. If you are not the executive director reading this, senior leadership buy-in is of course necessary too.
“Non-profits have a huge advantage over for-profit mentality: we don’t serve shareholders; we serve a mission.”
2. Going against “conventional” wisdom. For years and years, the old model worked just fine: season subscriptions filled the majority of our seats, and the arts were valued by society in a different way than they are now, which led to a much easier case for philanthropic support. Because that model didn’t crash and burn overnight — rather, it slowly changed over the last three decades or so — our institutions have slowly adjusted. That meant over time adding different season ticket packages besides the full season fixed seat, over time rolling out new communications channels besides direct mail and print advertising, and over time building strong development departments who specialize in every way possible to make a contribution, from mass mailings to in-person major gift asks to online platforms to telefunding to planned giving to corporate support to grantseeking. Over time, our organizations have been brilliant and resilient as Jesse Rosen, President of the League of American Orchestras often rightfully says. The trouble is that as an industry, all the tweaks and adjustments we have so suavely made have resulted in some unintended consequences: we’re great at attracting people to attend concerts once, terrible at keeping them coming back, and very quick to upsell too much too soon, on both the marketing and the fundraising sides. “Conventional” wisdom worked for a long time, and many organizations are now in need of a new way that works better for us.
Lastly, I mentioned above that our industry faces a built-in slowness to adapt. We plan our concert seasons at least a year in advance (and multiple years out for opera), book our artists that far out as well, and start marketing the season eight or nine months before it begins. This is not an easy way to roll out change quickly. Compare that to a company like Facebook (full disclosure: my husband leads a team of engineers there so I know a little about this firsthand): they are constantly releasing product updates, constantly pilot testing new ideas and features to a small set of the user base before a full deployment, and for a long time their internal motto was “move fast and break things,” meaning they constantly pursued new initiatives with quick action to learn and course correct. Love or hate Facebook, there’s a reason they are one of the fastest growing companies in the world serving more and more people all the time. While it took orchestras 30, 40, or even 50+ years as a field to get to today’s modus operandi, we can’t take that long to turn the tide; anyone can agree that the rate of change in our world is lightning fast anymore and only speeding up.
3. Shortfalls during transition (year 1 of implementation). While implementing the Long Haul Model at the California Symphony, we saw revenue gains across the board in year one, which is the silver-lining benefit of being brought in for a financial turnaround. In other words, the old way of doing things was so not working anymore, the only way to go was up (so take comfort if you’re at one of those struggling organizations and reading this — it might actually be easier for you and your organization to overcome the challenges herein!). For cultural institutions that have robust development departments though, implementing this model where you purposefully do not solicit patrons for a donation until they are second year subscribers means you have to shut off that revenue stream, and even though in the long term you will be retaining more customers and building up your audience and donor base in a much more fulfilling and lucrative way, cuts of any kind feel unpalatable. However, there are two reasons why for even the largest organizations this potential short-term loss may not really be so bad after all: 1) since this revenue stream is generally comprised of low-level annual fund donors, it’s likely not that much revenue as a percentage of total budget, and 2) year one isn’t only a revenue loss situation; there are immediate cost savings and increases in earned revenue to be gained (more on that below). To determine how much your organization could lose in year one, simply calculate how much contributed revenue comes from single ticket buyers and first year subscribers via all solicitation channels: direct mail/email, telefunding, sub renewal campaign. Below outlines how the Long Haul Model played out at the California Symphony over the first three years.
What Does It Look Like In the Beginning?
Here’s what we saw at the California Symphony in the first three years of this model, including some notes about what other, larger organizations may expect as well. At the time of this writing, our audience has grown by 70%, including a 37% increase in subscriber households, and a 180% increase in donor households. We are now heading into our fourth year fall donation campaign with the largest mailing list of qualified donor prospects the organization has seen in at least five years. In other words, we have more qualified prospects now than before this model was implemented — proof this work is building a stronger donor pipeline than we ever had previously.
- Potential reduction in low-level annual fund gifts due to intentionally not soliciting certain audience segments.
- Moderate ticket gains (we saw a 14% increase in tickets sold in year one over the year before implementing this model) through emphasis on new buyer retention and overhaul of subscription campaign strategies and packaging.
- Reduction in marketing and development expenses due to more focused and qualified mailing lists and reduction in acquisition marketing efforts. For larger organizations, this also includes reduced direct sales (i.e. telemarketing and telefunding) expenses.
- Musicians became engaged in the process, willingly helping with retention tactics such as writing thank you notes to new and upgraded donors and signing subscriber appreciation cards.
- Staff culture change began: those who understood and caught the vision of what we were doing leaned in, got excited, and worked harder with better outputs, and a few who did not “got off the bus” as business author Jim Collins would say, often self-selecting to do so. (Note: the HR component of this model is discussed in part two of this series.)
- Subscription renewal rates increased and new subscriptions increased (thus growing every facet of subscriber base).
- Single ticket sales increased while acquisition costs remained flat (thus improving ROI); single ticket churn rates decreased (in other words, return rate increased).
- Development campaigns/appeals saw higher response rates, donor base grew at every giving level.
- New staff hired with higher quality bar and ability to pay higher salaries to attract this talent; interviewing for culture-add and understanding of this vision made hiring decisions easier; performance review process revamped, making expectations for each role and their part in this model clearer among all staff positions.
- Subscriber renewal rate at a then-high of 85%, even as the subscriber base has grown (i.e. we’re not only renewing the core loyalists, we are successfully renewing the new season ticket holders we have gained).
- Audience age decreased among single ticket buyers AND subscribers. Yes, our audience is getting younger.
- Concert capacity averaged 89% with majority of performances selling out.
- Individual giving revenue up 61% since implementing the model; donor households up 180%.
- Percentage of subscribers who also donate is now at 52% compared to the national average of 28%. When removing first year subscribers from that stat (since they are not solicited for a donation), 71% of all 2nd year+ subscribers donate, more than double the national average.
- All staff who meet expectations continue to be rewarded; staff not meeting expectations managed out; open positions attracted greater volumes of applicants and more qualified applicants — now with people casting the vision back to us and how they can add to the success; talent development and salary budget expanded to further invest in staff (and therefore invest in organization to see results continue).
- Fiscal year ended with over 10% surplus, allowing the organization to eliminate a portion of past accumulated deficit.
Think of what your organization would look like if some of these stats were true in three years’ time. Ending the fiscal year with a 10% surplus? Donor household growth of 180%? A subscription renewal rate of 88% (that’s what it was going into year 4 this season, beating last year’s record mentioned above) while growing the overall size of the subscriber pool? What if even half of these gains were true for your org? This is how the narrative has changed for us.
“We have more qualified prospects now than before this model was implemented — proof this work is building a stronger donor pipeline than we ever had previously.”
To Be Continued In Part Two
I said at the top of this post that I have hope, and I am writing all this and sharing all of this because I want other arts administrators to have hope too. Through hope comes change, and this post covers questions I’ve received about three necessary changes/challenges to overcome if your organization is serious about implementing the Long Haul Model for Audience Development. Throughout my career, I have focused on retention at organizations both large and small, and the issue of scalability among different budget sizes is where we’ll pick it up in part two right here tomorrow. [Update: part two is now published here.]
About the Author
Aubrey Bergauer, Executive Director, California Symphony
Aubrey Bergauer defies trends, and then makes her own. In a time when most arts organizations are scaling back programs, tightening budgets, and seeing declines in tickets and subscriptions, Bergauer has dramatically increased earned and contributed revenue at organizations ranging from Seattle Opera to the Bumbershoot Music & Arts Festival to the California Symphony. Her focus on not just engaging — but retaining — new audiences grew Seattle Opera’s BRAVO! Club (young patrons group for audience members in their 20’s and 30’s) to the largest group of its kind nationwide, led the Bumbershoot Festival to achieve an unprecedented 43% increase in revenue, and propelled the California Symphony to quadruple the size of its donor base. From growing audiences, increasing concerts, and expanding programs to instilling and achieving common goals across what are usually siloed marketing, development, and artistic departments, Bergauer is someone you want to follow — on the nationally-recognized blog she created to discuss what actually works in a changing arts landscape, and in real life, too.
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 ground-breaking marketing and audience development tactics on the forefront of technology, and through taking strategically calculated risks in a risk-averse field. 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’s mission and vision is creating a transformational change in the office, on the stage, in the audience, in the community, and going well beyond the industry of classical music.