The Lure of Star Power

I just finished reading Playbill.com's Top Theatre Stories of the Year. The leading story discusses how stars sell tickets, and in a year with a down economy, it seems that the only thing that sells tickets are the stars. From this little story it seems clear that if you don't have an A-list star in your show, don't even try a Broadway transfer.

Arena Stage in the past few seasons has been lucky enough to host a few stars, most notably Carrie Fisher in Wishful Drinking and Valerie Harper in Looped (and not surprisingly, both productions found their way to Broadway). From a marketing perspective, nothing makes my job easier than a star, particularly stars that are lovely to work with as both Carrie and Valerie were. But let's be honest, it doesn't take a marketing genius to sell tickets to star powered vehicles. And it isn't just New York that has a taste for the stars. The Shakespeare Theatre Company and the Kennedy Center just presented two star productions that sold out immediately: Phedre with Helen Mirren and A Streetcar Named Desire with Cate Blanchett. It used to be that New York and Los Angeles were the cities that needed stars to sell, but it looks like DC might be going that way as well. Or maybe the entire country.

But there are problems with stars as well:

1. Star productions are a gamble, especially for regional theaters. Most Broadway productions can guarantee stars, but regional theaters for the most part cannot. Regional theaters tend to announce productions and casts several months before a show opens in time to sell subscriptions and advanced single tickets. However, during the time between the announcement and the opening, a star can get a better offer from a Broadway production, television series or movie which will lead them to pull out of the regional production, leaving audiences with an expectation that theaters can no longer fill.

2. Most times even with a guaranteed star appearance, run lengths have to be shortened as the schedules of most stars won't allow them to appear for a run length of several weeks, meaning that these productions will more than likely be off subscription. To capitalize on the star production, many theaters use them to boost subscription sales by only allowing subscribers to purchase the very limited quantity of single tickets to the star show. However, often times, patrons will purchase the cheapest subscription package available only for the opportunity to purchase the star production, and then won't attend the rest of the subscription shows leaving theaters with half empty audiences throughout the season.

3. Are regional theaters building an appetite for something they cannot always feed? If theaters have a couple of successful years of bringing in stars for productions, what happens when they can't find a star production for a year or two? In essence, they have built an event based audience that they can't always feed. And in this case, these types of patrons aren't loyal to the company, they are loyal to productions that feature stars. They are the most fickle of any audience segment. The first time you don't deliver, they will move on to somebody that is.

4. Are regional theaters teaching hoards of future patrons that only star vehicles deserve their patronage by filling their programming with stars if and when they get them? Or even a larger concern for me, what about those companies that regularly program poorly conceived productions that showcase a star over a brilliantly produced production without a star? The Playbill article focuses on this issue, citing several poorly reviewed, star centric productions on Broadway that financially recouped along with numerous well reviewed productions that lacked stars which struggled from day one.

There is no doubt about it--a star production can be fun. Your audiences will love them, you will sell plenty of tickets, and they will bring national attention to your part of the world. However, like anything else, maybe some moderation is in order?

Make sure you keep one foot in both courts

Sometimes at the conclusion of a speech that I am giving, I have someone from the crowd come up to me and thank me for all the great information, exclaiming that they are going to end their direct mail campaigns in order to shift resources to technology based viral marketing campaigns. At that moment, I usually cringe and apologize, for I definitely communicated something that I didn’t intend to. For those that read this blog, you know by now that I am a proponent of using technology to grow audiences, building communities and diversify revenue streams. That being said, most major arts organizations find themselves with a foot in two different courts—how to please the audiences of tomorrow, and still serve the audiences of today.

We sometimes forget that there are four generations in play in our audiences: the Silent Generation, the Baby-Boomers, Generation X and the Millenials. Many books have been written, white papers drafted and speeches given (including by yours truly) on how to effectively target Generation X and Millenials as they are the future for arts organizations. However in doing so, some rabid believers have advocated throwing the baby out with the bathwater. Allocating all of your resources at any one of these groups, unless you have programming that only speaks to a certain generation, is foolish, certainly as foolish as not diversifying your stock portfolio.

Let’s take a look at subscriptions. Most arts marketing professionals agree that the subscription model is dated, and is dying a slow death. That doesn’t necessarily mean that we should pull the plug on them today when they still probably have a good decade left in them. Several performing arts organizations still receive a major portion of their earned revenue via subscription sales, and although Danny Newman might have published his treatise decades ago, his point that subscriptions protect a company from poor reviews and the fickle buying habits of single ticket buyers is still spot on. At every performing arts organization that I have worked for, I noticed a declining subscription base, and within two years with strategic changes have stopped the decline and started increasing the number of subscribers. I don’t say this to seem like a miracle worker (for which I am not), but it does make me wonder how much marketing directors are directly responsible for declining subscribers.

I am starting to believe that the decline of subscriptions might be in part a self-fulfilling prophesy. If a marketing director fully believed that subscriptions were dying, and that nothing could be done to affect declining subscription numbers, then he might be inclined to focus his limited resources on addressing the needs of his “future audience,” thereby ensuring the decline he was forecasting.

We know from surveys that subscribers tend to be older, and more than likely are part of the Baby-Boomer or Silent Generation. We also know that these generations have been purchasing tickets in this manner for years, are usually more comfortable with transaction conducted over the phone or via mail, and therefore respond better to some classic direct marketing techniques such as direct mail or telemarketing. However if you are underfunding direct marketing in order to fund other priorities (such as online marketing), then the decline in your subscription base might be caused by poor strategic marketing decisions.

When creating a holistic marketing campaign, a wise marketing director should always keep in mind that we are serving multiple masters—each master having a different set of expectations and desires. The key for all marketing professionals is putting the right offer in front of the right people using a communications vehicle that gives the message the highest possibility of success.

What if they are just tired?

In the last few weeks, I have been doing quite a bit of traveling. I have gotten the opportunity to speak with many of my colleagues from around the nation, and they are all saying the same thing -- ticket sales are down this year. Last year, I kept hearing that well branded products were doing very well, while less known fare was struggling. Now I am hearing that even annual cash cows (think A Christmas Carol and Nutcracker) aren't doing well. When a classic theater has problems selling Romeo and Juliet, you know something is up.

So it got me thinking about what is going on (and of course, this is just an opinion). We are all seeing reports that even though some aspects of the economy might be improving, many are still getting worse, such as unemployment. Unemployment is the highest is has been in 20 years. Last year when the stock market crashed and it became clear we were all in for what looked to be an unprecedented global economic crisis, many companies panicked. They didn't know how to project future revenue, so they opted to look at the side of the ledger they could control -- expenses. With that came the layoffs.

Those lucky enough to survive the layoffs took on responsibilities that were normally handled by two or three people. Many managers noted that the resulting model was unsustainable, but thought that most people could put up with the extra load for a short period of time, hoping that the economy would improve and that hiring would be possible. Well, it has been over a year, and unemployment is getting worse, so the unsustainable model of having one person carry the workload of three continues.

As arts administrators, I no longer believe our largest challenge is dealing with people's fears about the economy. That was so last year. Instead, we now have to deal with people who are simply exhausted, and when Friday comes, they want to do nothing more than spend the weekend on the couch in order to recuperate and be ready for the next grueling work week. Whereas last year, our largest competitors might have been other cultural destinations or sporting events, I am starting to think that our most significant future competitor might be cable television and a warm bed.

Blogging from NAMP...

Once again I find myself at the National Arts Marketing Project Conference, which is being held this year in Providence, RI. This is my fifth conference, and instead of presenting like I have done in the past, I really wanted to listen in on other sessions to hear what is being discussed. I have been asked to blog about my experiences for Americans for the Arts so these posts can also be seen on their blog.

This morning I was lucky enough to sit in on the Every Dollar Counts: Using ROI to Prove Marketing Effectiveness session. I decided to go to the session because one of my favorite arts marketing experts was presenting--Philippe Ravanas, marketing professor at Columbia College and former VP of Corporate Communications for EuroDisney. I have seen him speak at several conferences and he is always extraordinary.

This morning he discussed a situation he found himself in when he was the Manager of Client Development at Christie's in London. Each year, they would produce a beautiful catalog of auction items that they would send to most of their database. These catalogs were highly coveted, and cost the organization $20 a piece to produce, however Philippe noticed that his ROI (return on investment) for these catalogs was poor. It was costing him too much to produce and mail these catalogs in terms of how much revenue they were bringing in. After researching the problem, he found that they were mailing these catalogs to almost every purchaser, including those people who purchased once twenty years ago and people who only purchased a minor item just to get on the distribution list, as the Christie's catalog seemed to be a popular coffee table item. He soon cut back the distribution, and only sent the catalog to his higher end purchasers. This action greatly improved his ROI on the catalog.

It brought me back to a previous blog post I wrote about the future of the subscription brochure. If you read the post, you can see that I have some serious doubts as to whether or not a subscription brochure works as a sales piece. That being said, our subscribers at Arena Stage love our season brochure because it invites them into the process. There are articles by our featured artists, a letter from our artistic director, beautiful artwork, etc. We have heard from our subscribers that they anxiously await our brochure each year, and that these brochures have become collector's items. So they perform a very valuable function in maintaining relationships with our higher end purchasers, but they aren't necessarily needed to push acquisitions. In fact, we have found that other smaller pieces with a clear central message that cost significantly less to produce and mail actually perform better for acquisition campaigns.

As Diane Ragsdale says in her article Recreating Fine Arts Institutions : "Arts leaders may be tempted to think that the solution to dwindling audiences lies in better marketing, but if arts organizations are going to survive, they have to put more than the season brochure on the autopsy table." I completely agree with Diane...but what happens if an organization isn't even willing to put their season brochure on the autopsy table?

Thoughts on the Voodoo Art that is Branding

Many established arts organizations are finding themselves in the position of having to reinvent tried and true business models to adapt to the ever changing economic landscape. Diane Ragsdale, Associate Program Officer for the Mellon Foundation, offers a well thought out paper on this subject entitled Recreating Fine Arts Institutions. Although I don't agree with all of her arguments, I believe she outlines the overall dilemma very well.

So, what do most organizations do in this situation? They bring in a branding firm to slap a new coat of paint on the organization by creating revamped messaging rules, visual systems and logos. In guiding a couple of these rebranding projects myself, I have learned the following:

1. You can slap a little lipstick on a pig, but it is still a pig. Rebranding begins with artistic strategy. If an organization truly wants to address significant business or perceptual issues, it must do so with the product first. It doesn't matter how savy a branding firm is, if you don't reposition your artistic strategy, there is no reason to rebrand. In working on the rebranding campaign for Arena Stage at The Mead Center for American Theater, I believe this was handled in an excellent fashion by our artistic staff. The senior artistic staff members drafted an artistic plan that clearly outlined where we were, and where we wanted to go. It was a shift from a traditional regional theater model toward becoming a national center for the production, presentation, study and development of American Theater. Once given this clearly defined goal and the artistic strategies to achieve it, the rest of the rebranding process could officially kick off.

2. Say what you want, but your customers will tell you your brand. Have you ever noticed a clear disconnect between the official corporate messaging from a company and your perception of the same company? An example of this can be found in a blog post that I wrote about Hyatt Regency in 2007. Hyatt Regency corporate communications boast that they go above and beyond in customer service, but as you can see, that wasn't my experience. No matter what you say, your brand lives in the minds of your customers. We can craft the best messaging campaigns in the world, but it will not matter if we don't deliver. What we deliver on will become our brand.

3. Brand strategy can be crafted by marketing, but its success is determined by everyone. Think of the people who actually execute your brand -- front line sales associates who process orders; artists who develop the product your customers will experience; the parking attendant who most likely will be the first person to greet your patrons on the evening of their performance; the concessions staff who has to process a vast amount of orders in a very limited amount of time. And then think of the amount of time that a Marketing Director generally interacts directly with patrons. It's time to get over ourselves...brand strategy will live or die by the people who represent you on the front lines, not the pretty new colors you have selected for the organization.

All of this is to say that I do believe that messaging and visual systems are critical in conveying a brand, however they are not the most important factors in developing a brand identity. Artistic strategy and the day to day execution of your brand promises will always outrank the look and feel of any brand.

The Problem of Silos

I have just returned from a National Arts Strategies seminar entitled Managing People. One of the many things I love about their seminars is that they force you to take a hard look at strategic planning, and how strategic planning influences everything from marketing strategies to, in this case, human resources.

Upon my return from the seminar, I started to think about a common structural problem that many organizations encounter -- the problem of silos, particularly silos between the marketing and development departments. As non-profit arts organizations became more and more sophisticated, there began to emerge two distinct entities: a marketing department tasked with maximizing earned revenue streams and a development department responsible for overseeing all contributed revenue streams. It can be said that "marketing" departments have existed for much longer, and that even for major arts organizations, development departments are somewhat of a recent development (Arena Stage hired its first development director in the late 1980s). With two distinct departments tasked with being responsible for all revenue coming into an organization, all too often, the strategies devised by each department are done so with minimal thought to how they will affect or interact with the strategies of the other, causing the silo effect. As a consultant, I see this with many of the clients I work with, and it makes it difficult for an organization to make the best overall decision on how to move forward strategically.

In the last decade, many organizations have experimented with the "external affairs" model where one large department, housing both development and marketing, is tasked with revenue management. The problem with this model is that in most cases, although the department is united under one leader, there still exists marketing and development silos under the external affairs banner. Again this creates a problem because it doesn't allow an organization to view a complete picture of the customer as one side will look at a customer from a ticket sales perspective while the other will see his potential as a donor. Given the experience of the external affairs director, many times one division is stronger than the other depending upon the director's history.

So remembering a session from this summer's TCG conference, I thought what would I do if I had no rules to abide by and I were running the zoo? I believe I might blur the lines between development and marketing much more than they have been in the past in an effort to view the customer holistically and therefore provide better service. The heart of most of the roles in each department rely upon the same set of skills -- messaging, selling and promoting. Below would be a possible org chart for an external affairs department:

Director of Business Development (not so hot about the title, so it might change): This person would be responsible for all new business development. Chiefly responsible for getting new audiences into an organization, growing the reputation of the organization in targeted segments and organizing audience development events.

Direct Reports:

- Group Sales

- Inbound Sales

- Telesales

- Audience Development

Director of Loyalty and Retention: This person would be responsible for taking the current customer base, and moving them up the loyalty ladder from single ticket buyers to multi-buyers to donors. Also responsible for audience retention programs.

Direct Reports:

- Customer Account Managers: These individuals would oversee a given number of customers and would be responsible for their customers complete care with the goal of moving the customer from a multi-buyer to a subscriber to a donor, and then renewing them the following year. They would track the participation of each of their accounts, and provide customized personal strategies designed to enhance the relationship between the organization and the customer.

- Planned Giving

- Capital Campaign

Director of Brand Management: This person would be responsible for the overall brand of the organization from institutional messaging and design to public affairs and media relations.

Direct Reports:

-Media Relations

-Publications/Art Department

-Marketing/Communications

-Sponsorships

-Special Events

Director of Government & Institutional Affairs: This person would be responsible for being the liaison to all government offices (local, state and national) as well as foundations.

Direct Reports:

-Grant Writers

-Lobbyists

-Foundation Officers

Want to get into trouble? Concentrate on new audiences

If I had a quarter for every time I have been asked in my career how I planned on attracting new audiences to an organization, I would be a rich man. On the flip side, I am almost never asked about customer loyalty or retention. The quickest way for an organization to get in trouble from a marketing perspective is to ignore audience retention problems in favor of attracting new audiences.

Some common misconceptions:

1. In order to grow, you must attract new audiences. This statement is only true if you are attracting more new audiences than you are losing the audience members you currently have (and even if this is the case, it can be much more expensive...more to come on that point). Many of us are so captivated by the allure of attracting new audiences that we concentrate much of our attention on getting the new ones in the front door while the old ones are running out the back door. A recent study of nine of the most prominent U.S. orchestras conducted by Oliver Wyman showed that these orchestras were great at getting new audiences, attracting on average 57% additional new households in 2007, but had significant issues in retaining current audiences with 55% of unique households not returning in the same year.

2. New audiences are great for the fiscal bottom line. This simply isn't true. The only thing that new audiences are on their first visit is a losing proposition. New audiences only become financially beneficial to an organization over a significant period of time. The money invested in bringing in new audiences only pays off when looking at lifetime value. And to determine lifetime value, one must ensure the new audience member sticks around for more than one visit. A study conducted by Katy Raines in the United Kingdom showed that first time attendees spent on average half as much as their returning buyer counterparts. When looking at the Oliver Wyman and Katy Raines studies, one truth comes to light: first time attendees will spend half as much as regular attendees and on average 83% of them will never come back.

3. Spending money on programs specifically designed to bring in new target audiences is a good investment. The holy grail of new target audiences is the revered "young" audience. So, to get them in the door, organizations spend a lot of time and resources on developing young professional societies, throwing parties, putting together after hours events, and other similar tactics. But if your programming isn't of interest to the target demographic you are focusing your efforts on, you might as well just throw money right out the window. Having a late night club scene in your building might attract young people, but it won't convert them into experiencing your organization's central product. If you are truly invested in cultivating any specific target audience, you must find ways of making your core product attractive to them.

By nature, humans are attracted to what is new and hip. The grass is always greener on the other side, that is, until one reaches the other side. Don't be sucked into a strategy because it is shiny and new. Before digging new wells, make sure that your existing ones don't have any leaks.

So the next time someone asks how you plan on getting new audiences into your organization, you might want to begin the conversation with the status on your current audience. Are they loyal to you, or do they run for the hills after their first visit?

So you are a first time marketing director, huh?

Just recently, I have had several students and former employees who have been offered their first marketing director gigs who have reached out to me for words of wisdom. Below are the fifteen points that I like to share with any first time marketing director.

1. When results at the box office are disappointing, one of two things are usually the culprit: the artistic product didn't live up to expectations or the marketing plan wasn't successful. When enquiring minds want to know what happened, don't point fingers unless you want fingers pointed back at you. Artistic Directors will fail, and so will Marketing Directors. The arts are inherently risky, and if you are taking risks, at some point you will fail. Get up, dust yourself off, and work to make up the loss on future productions.

2. I have worked for very large and extremely small organizations. I used to think that large organizations had the resources to do everything right. I have found that organizations are sometimes like dogs, the bigger the dog, the larger the pile of shit you have to deal with. So instead of judging the organization on size, judge it on how well you fit within it -- we all have to deal with shit, so you better love the dog.

3. If you want to be successful as a marketing director, you either have to love the product or be a masochist. You are in the arts, which means you are over worked and under paid, so make sure your commitment is worth it.

4. On hiring:

• There is nothing more important than hiring.
• Always be scouting for talent. You might not have a position to fill, but you will some day.
• If I have to choose, I will always pick hunger over experience. You have to be hungry in today's market to be successful. The real key is not to have to choose between hunger and experience.
• Know yourself before you look for others. Look for people who have strengths where you have weaknesses.

5. I don't know is an acceptable answer for questions that you don't know the answer to. Whenever you have that as a response, it is your responsibility to seek out the answer in a timely fashion.

6. When you start working for a company that didn't have a successful marketing campaign prior to your arrival, fight the urge to change everything immediately. For two reasons: 1) Most times, there are good reasons (even if outdated) for the decisions that were made, and 2) you will need some time to prioritize which things need to be addressed first.

7. If you plan on being the marketing director for more than a month, make decisions that make sense for the long term, even if they might not make sense for the immediate future.

8. As soon as you start seeing the signs that one well is starting to dry up, you better do two things: 1. address the cause for the well drying up if possible, and 2. start digging a new well. Too many marketing directors aren't on the look out for new revenue streams when we should be.

9. Offer help to your colleagues. Most likely you can help someone in a situation you have dealt with, and in turn, your colleagues can probably assist you.

10. Never forget about a patron's entire experience. You can have the greatest play on the most beautiful stage in the best section of town, and it won't matter a bit if you run out of toilet paper in the women's bathroom.

11. Be a discount ninja -- move quickly and silently if needed, but don't disturb the general public.

12. On negotiating:

• Rule 1: When leaving the negotiation table, always make your opponent feel like he won.
• Rule 2: Never let your opponent win. Only sign agreements that are beneficial to you.
• Rule 3: Don't be greedy with Rule 2. You want to win, but if you win too big, you will violate Rule 1, and it will be the end of your relationship.

13. Before accepting a position, make sure you have a candid conversation about your general beliefs on marketing strategy. If the organization is looking for a technology wizard, and you just figured out "the internets" recently, probably not a good fit. Always better to have the lengthy conversations before you start than the awkward conversations after.

14. In times of trouble, often inaction can be more costly than reaction.

15. Be aware of your ego. Many times the best marketing ideas won't come from your department. When good ideas cross your desk, be humble enough to act on them and thank the source.

Pricing as a Strategy to Encourage Early Purchasing Behavior

In my earlier post, I wrote how I have observed that consumers have become ultra late purchasers this past year, while hypothesizing that with the state of the economy, most light to moderate users were waiting on a review to make a purchasing decision. Following that post, I received a lot of comments and e-mails asking how one could counteract this trend. I noted to the concern of some that we were shortening our advertising campaigns because we were finding no correlation between the amount of advanced advertising spends and the amount of advanced sales. This is not to suggest this course of action is for everyone, but I do believe it is wise for us.

I further believe that we should start looking more at pricing as a strategy to encourage early purchasing behavior. The traditional approach of discounting performances early in a run is one method of attack, but I would suggest looking at what happens after a show takes off. If consumers are waiting for a great review before purchasing, then we should capitalize on that as much as possible. Several arts organizations have experimented with demand based pricing. This isn’t a new idea, but I believe that we are just now starting to perfect it.

Demand based pricing provides an incentive for early purchasers--they will be “insured” against a spike in ticket prices if a show receives a fantastic review and takes off. Late purchasers who wait until a review hits, will have to pony up significantly more than those who leap before the review. Just as patrons learn that some companies do fire sales on shows that aren’t selling well, they will soon learn that they either purchase early or pay a premium for waiting for the review. There simply is no incentive for late purchasers to buy early if they can get a relatively good seat at the same or similar price point as an early purchaser.

This will require some educating on our behalf. Sales offices (noticed that I didn’t say box offices) in responding to complaints from customers should take the opportunity to cross and up sell – “Our prices increase with demand. With a favorable review, the demand for a production increases significantly causing prices to go up. I am sorry that has resulted in a higher ticket price for PRODUCTION A, but I know you will also be interested in PRODUCTION B because it is very similar and has an amazing cast. While purchasing today for PRODUCTION A, we can lock in the lowest available price for PRODUCTION B with the best available seats if you would like, guaranteeing that you will be protected from any increases in the future. And remember, subscribers are always protected against any fluctuation in price due to increased demand. I wouldn’t be doing my job if I let you paid any more than you absolutely had to. I know that you will enjoy both PRODUCTION A and PRODUCTION B so let’s take care of both today.”

Pricing should be a fluid variable. If we cannot encourage early purchasing behavior by running advanced advertising, maybe we can do it by capitalizing on those who insist upon purchasing late.

Buying Trends and the Impact of Reviews

To say that this has been an odd year would be a drastic understatement. A little less than a year ago towards the end of September, I remember working with the leadership and board of Arena Stage on an action plan to address the stock market crash and the, at that time, anticipated economic crisis. It seemed we had an incredibly daunting task ahead of us -- exactly how does one forecast and prepare for an economic crisis on the scale that none of us have ever experienced before? At the conclusion of our fiscal year, I am happy to report that Arena Stage had an exceptionally strong year, both artistically and financially. Our success has afforded me the time and opportunity to look back over the course of the year and analyze some of the patterns we saw to learn from them as we embark upon the next fiscal year.

From an overall observation, I started to notice two things that struck me almost immediately after the market crash in September: late purchasing behaviors became common place, and many of our would be patrons put a much higher importance on reviews in making a purchasing decision. To confirm what I thought were changes in patterns, I input sales data into an excel spreadsheet which produced the graph above. Starting from six weeks out and then going through the week that most reviews hit, I tracked our weekly sales for all eight of our mainstage productions. A dominant pattern appeared--sales remained constant for almost every show until the opening week, and then several took off almost exponentially after reviews hit.

Because we had several very short runs for a couple of our productions (2.5 weeks and 3.5 weeks), I created marketing plans that started advertising campaigns much earlier than normal, in an attempt to secure significant advanced sales. But even with robust advertising expenditures, audiences weren't willing in most cases to plop down their money until the show opened or they read a great review.

Takeaways:

1. As I don't see an end to the economic crisis anytime soon, I expect this pattern to continue next year, so I am not going to waste valuable advertising dollars on advanced campaigns as this graph shows that despite those expenditures, patrons still waited. Instead, I am going to shorten the campaigns, and spend significantly more over shorter time periods and concentrate on pushing reviews. This most likely will mean where before we had about a 50/50 split (50% of advertising dollars spent before opening and 50% after), next year we will look at a 30/70 split (30% spent before opening and 70% after).

2. In this blog just a little more than a year ago, I was arguing that traditional reviewers were becoming less influential with the addition of citizen based reviews and user generated content. However, when the crisis hit, many patrons began looking for a "sure bet" when spending their very limited expendable income. So reviews became even more important than they previously were, and certain reviewers became more influential as several media companies cut their reviewers, leaving only maybe two or three major critics in a large metropolitan area. From the graph above, you can see at least four examples of shows that took off after the reviews hit. Also by concentrating more advertising dollars for after a show opens, you can put more money behind pushing exceptional reviews.

Overall:

I thought I was going to have several heart attacks this year as sales patterns for individual shows were completely different from previous years. So much so that there were a couple of times that I was forecasting that a show would miss its goal by a significant margin only to go over goal by the time the show closed. I am sure that I must have seemed a little schizophrenic to certain board members, but forecasting during this climate was exceptionally difficult. I will say however that I was very proud that our reforecasted income model that was developed in October was almost spot on. We ended the year with a 1% variance off where we forecasted we would in the box office. Next year, I will probably continue to have the minor heart attacks, but I now know what I am up against--extremely late buyers who are very sensitive to reviews. They say that knowing is half the battle, so now we have to shift our tactics to address our new reality.

The Future of the Season Brochure

For decades now, the most revered communications tool of most performing arts organizations has been the season/subscription brochure. We spend weeks if not months toiling over copy, getting images, crafting pitches, working with designers, going to press checks and coordinating with mail houses. Once finished, it is the holy grail of marketing collateral for the rest of the year -- the piece that we take to conferences, show our donors, give away at outreach events and mail to everyone we think has even heard of our organization. And for years, this strategy has been virtually untouched, even while the world around us has changed rapidly. Isn't it time we question whether or not there is a better way?

My biggest problem with season brochures is that we try to pack into one piece messages for all of our separate target audiences: full season buyers, partial season buyers, single ticket buyers, annual fund donors, capital campaign donors, genre specific audiences, etc. For example, a partial season subscriber who prefers musicals and gives at a $50 level each year will receive the same brochure as a full season buyer who prefers serious dramas and gives at the $1,000 level each year. Each target audience looks for different things in our organizations, and we should customize our communications to each group.

Recent advances in printing technology and online communications have made customizable communications much more affordable, but most of us, fearing change to our detriment, still print tens of thousands of one brochure and mail them to all of our target audiences over and over again until those list segments stop producing.

The way we talk to renewing subscribers vs. new subscribers, multi-buyers vs. single buyers, musical lovers vs. drama lovers, and donors vs. non-donors should be different. So why are we addicted to the season brochure? is it our love for crafting one primary brand-driven piece that we can roll out like a turkey at Thanksgiving dinner?

This year Arena Stage has experimented with ordering significantly fewer primary subscription brochures, and then augmenting our direct mail campaigns with five targeted mini acquisition brochures for some of our larger audience segments: musical lovers, drama lovers, locality buyers (we have venues in Virginia and DC), event driven purchasers and our African-American patrons. Each group has a specific relationship with Arena Stage, and should be communicated to in a tailored fashion. I have even heard of colleagues at different organizations creating customizable online brochures for different target audiences.

Communicating to the masses with one overall brochure packed with several different messages is a way of the past. I still foresee the use of a season brochure as a branding piece, but as a sales piece, I believe there are better options out there. The proof will be in the pudding as they say, and as we get the results in for our targeted mailings, I will share them.

Measuring the Impact of Social Media

Every time I speak at a conference, I am generally asked how I track the results of my social media campaigns, and what I consider a success. Everyone seems to be thinking in terms of ticket sales and return on investment. I don't disagree all together, but I also think we have to measure success on how these communications tools strengthen our relationships with our target audiences, and encourage a higher level of participation with our strongest supporters.

Recently at the spring LORT conference, I sat through a well thought out presentation by Sergi Torres, a third year graduate student from the Yale School of Drama, who took on how to track social media campaigns in terms of sales at Yale Repertory Theatre. The results were impressive, and I was glad to see research being done on how social media campaigns could spur sales. However, I was left wondering what type of value we assign to engaging our customer base.

I am a fan of Thomas Cott's You Cott Mail, as are many of my colleagues. On Friday, May 29, "You Cott Mail" featured a blog post by Douglass McClennan entitled "10 ways to think about social networking and the arts." In Mr. McClennan's post, he makes the argument that "using social media as just an opportunity to sell tickets is a bad strategy, the electronic equivalent of junk mail...the idea is to cultivate relationships with an audience that is increasingly online." While many of my peers would argue that the main priority of any Marketing Director should be increasing ticket sales, I would argue that we also have a primary responsibility of "Creating Raving Fans." How many times are we looking for new audiences just to see them leave after the first time they visit? Why don't we focus on deepening the relationships that we have already cultivated?

Side Note -- Although I found Mr. McCleenan's blog post very interesting, I must say that I disagree with some of his primary arguments. He states "Outside of your primary artistic role, don't get into the content-producing business. Video is hard. Magazines are hard (and expensive) to produce and sustain." I must contend that we are in the business of creating content, particularly as mainstream media sources go out of business. And video is not hard. If you can afford a mini Flip camera and some basic video editing software, you are good to go. If the Anaheim Ballet, which has an annual budget of $290,000, can create a video campaign on YouTube that attracted 10.8 million unique views and enabled them to become the #2 All Time Most Viewed Non-Profit, than anyone can do it.

So in the future when I am asked "what kind of sales do you see from your social media campaigns," I am going to reply, we should be asking what types of measurements we are using to track the engagement levels of our online communities. That is the primary objective, and sales are secondary. As Arena Stage moves toward becoming a national center for the production, presentation, development and study of American Theater with the opening of The Mead Center for American Theater, I consider it a success when people all over the world are watching our videos and interacting with our content online, even if they don't have the means to travel to Washington, DC and purchase a ticket.

On Transparency (Long Post)

Most of those who know me know that I am an avid reader, generally consuming a book a week, mostly on topics related to my work. A couple of weeks ago someone left a copy of Radically Transparent: Monitoring and Managing Reputations Online by Andy Beal and Dr. Judy Strauss on my desk. To this day, I have no clue who left it on my desk, and when I left the office to attend a Strategic Marketing conference by National Arts Strategies, I threw it in my bag thinking it would keep me company on my trip. I have just finished reading the book, and I found it fascinating, particularly for those of us who were trained in the old school of public relations. I have known for some time that with the proliferation of new technologies, "spin" is no longer an accepted practice, as information travels too fast, and some of the most interesting stories are broken online by citizen bloggers. In this new world, being transparent seems to be of prime importance, and that is an argument made beautifully in this book.

The authors encourage every organization to become "radically transparent," which means "being open and honest online, admitting mistakes, engaging stakeholders in discussion about you and your brands, and even revealing your internal processes." They go on to say that "there is little censorship in the world of online social media--the community values raw truth. The internet community immediately comes down hard on those who employ conversation spin, control, manipulation or spam."

Recently when I was giving a presentation at the Leagure of Resident Theatres (LORT) conference entitled "Theaters as Media Outlets," I made the argument that traditional media relations would no longer work and a new system would have to be created. I discussed how our artistic staff have direct lines of communication to our audiences via blogging and twittering, and that we were taking the next step of purchasing FLIP cameras for senior artistic staff so that they could capture their own video. As a communications department, we are still responsible for crafting messaging and monitoring all of our external communications, but we are trying to make those communications as authentic and transparent as possible.

In a recent article for Wired Magazine, "The See-Through CEO" Clive Thompson states "in the new world of radical transparency, the path to business success is clear. Show what you are doing, reveal your processes, acknowledge mistakes, and participate fully in conversation that concerns you."

Many media relations professionals have been following the relationship between the Guthrie Theater and the press, which has turned into an apparent feud during the past couple of months. It is always easy to be a Monday morning quarterback, and believe me I have my own issues, but I have to believe that if the Guthrie embraced the idea of radical transparency more, all of this might have been avoided. Below are a couple of articles concerning the relationship between the Guthrie and the press:

January 6, 2009: "Compensation in the Arts: Some Salaries Raise Eyebrows," The Minneapolis Star Tribune. Rohan Preston reports that Joe Dowling, Director of the Guthrie Theater, received a pay package of $682,229 in 2007, and then makes the argument that Dowling is paid much more than his peers at other theaters. I found it interesting that there wasn't an official response from the Guthrie, except an identified board member who sits on the compensation committee and a board member who spoke on anonymity. The article received 163 comments online, many of which weren't pretty.

February 2, 2009: "Don't Review This," Minnesota Playlist. A little less than a month after the article on Joe Dowling's salary, Melodie Bahan, Director of Communications (assuming that would be equivalent to Arena's Director of Media Relations) writes an article criticizing the state of arts journalism, particularly that found in daily newspapers and takes some swipes at the reviews found in her hometown papers (including the Star Tribune). Even if you agree with the arguments she makes (and elegantly so), the timing of her article could be construed as sour grapes over the Dowling piece.

This article prompted responses from the local critics and reporters:

Graydon Royce, Star Tribune

"Star Tribune's Peck responds to Guthrie staffer's rip" by David Brauer covering Senior Arts Editor Claude Peck's response. In response to Ms. Bahan's request for better arts journalism, Mr. Peck states it is "very difficult, for example, in the case of the Guthrie, which has had a long reputation of giving the barest minimum of cooperation for our newsgathering efforts."

Garnered responses from bloggers:

Minnesota Mist: To Ms. Bahan: "Oh, honey! Surely you at least thought twice about such a position after the Star Tribune newspaper reported last month about the $682,300 salary and benefits that were paid to Guthrie Director Joe Dowling in 2007. (That is less than 3% of the Guthrie's budget, by the way.)...I would bet that you and your colleagues did not welcome the writing of such news. Nor the discussion that has reverberated since...You read it here first: I can and will run any company into the ground for $500,000 a year. I will bring along my own cronies to help me do it. Where do I sign my contract?"

Secrets of the City: Theater Publicist vs. Newspaper Editor

Butts in Seats: When you Grab that Cute Ball of Fur, You Also Get the Teeth: "I just thought the whole situation was a great reminder to us all that when we bemoan the lack of good arts coverage, we should be mindful that what we wish for is a double edged sword situation and not entirely the ideal we envision."

Seems like this has been an ongoing issue...

February 3, 2008: Tynan's Anger Blog: The Guthrie Theater gets Childish. "In the latest case of critical reactionary drama queenery, a full page ad by the Guthrie was placed in the Minneapolis Star-Tribune after the paper gave their most recent production a negative review. While the ad had been "planned for months," the content, decided upon after the reviews came in, feature a near-exact copy of the positive review from the alternative weekly CityPages."

Which continues...

March 26, 2009: "Guthrie Theater to Trim Budget by $4 million," Minneapolis Star Tribune. "Trish Santini, director of external affairs, said she was not authorized by board president Randall Hogan to release Dowling's salary. The Star Tribune reported in January that Dowling's 2007 compensation was $682,229 (which included a $100,000 bonus). Dowling disputed that Wednesday, but did not offer specifics. "The focus on me and my salary, which has been inaccurately reported, and I would say somewhat with ill-informed research, has led to a considerable amount of discussion in the community," Dowling said. "Let's take the heat off that and talk about the fact that here's an organization where people are willing all through the organization to make sacrifices."

Following this situation has reinforced a couple of things for me:

1. Be proactive rather than reactive as it involves the press. If it is controversial, break the story yourself through your own distribution channels, and provide the information that your stakeholders are looking for.

2. Transparency is king. The days of "no comment" and "not authorized to release information" are long gone. If you don't participate, it looks like you have something to hide. I am sure that funders read these articles and wondered why the Guthrie wouldn't comment and why the board wouldn't release information on Mr. Dowling's salary, particularly in the wake of Enron, ING, Madoff, etc.

3. You can't possibly win in a public slug fest with the press

Capture Information

First off, I am amazed at the number of organizations that don't want to invest in data hygiene. Most likely, your database is the most valuable thing in the office. If my building was on fire, it would be the first thing I would try to protect. If your database gets corrupted or is out of date, it will compromise your ability to hit both earned and contributed revenue goals. So invest in data hygiene so that your database is as clean and up-to-date as possible. Send out your data for in-depth hygiene services and appending at least once a year, and go through the NCOA process quarterly.

That being said, don't let opportunities to capture information go by. I just got back the data hygiene reports for Arena Stage this past week, and we had roughly 20,000 bad addresses (which isn't surprising since we have such a large database). However, when I looked at the report closer, almost half of those bad addresses were due to missing contact information. So I did some investigating, and realized that when we were processing complimentary ticket requests, we were not asking for contact information. If we are going to give away a free ticket, I would like to be able to at least contact the recipient for a donation later in the year. So we now have a new policy -- to process a complimentary ticket request, we must have your contact information. This goes for contest winners, promos and donations as well.

We have also recently engaged Target Resource Group as consultants, and in our initial meetings with them, they encouraged us to find ways to collect contact information for all members of group bookings. Group bookings can be a very large source of revenue for Arena Stage. For example, 34% of our revenue on single tickets for Crowns came from groups, which means that most likely 20% of our houses were group bookings (when taking into consideration our subscriber base). But we only have the contact information for the group leader. Knowing that the best prospects for subscriptions and donations are individuals who have been to the theater before, not capturing contact information for all group attendees is a costly mistake. So now we are devising incentives for group leaders to provide contact information for every person in their group.

To Tweat or Not to Tweat

Twitter is the newest communications tool in the Arena Stage arsenal, and the more we use it, the more I am convinced it should be treated in the same manner as a blog, or perhaps a little more delicately. At its core, Twitter was created to send micro-blog messages to followers on a regular basis throughout the day, explaining what you are up to and your thoughts on current surroundings. Those who are avid users send several tweats per day, and the tweats of those that you follow aggregate on your homepage, or they are sent directly to a mobile device. Many organizations have created Twitter accounts but few have figured out how to successfully use this communications tool.

As a web 2.o application, the central idea behind Twitter is interaction, so it amazes me how many organizations use Twitter to simply push information, such as reviews, headlines and marketing promos. Remember, as I like to say, no one is interested in what a marketing director has to say. So keep it interesting, and try to make it as interactive as possible.

An alternate way of using Twitter could be having a senior member of your artistic staff set up a Twitter account, and have them twitter on their activities. Therefore, you won't have to worry about having a boring organizational voice, and the application can be used for what it was invented for -- to report on the activities of a single person. David Dower, Arena Stage's Associate Artistic Director, recently set up a Twitter account of his own where he twitters about his travels and his work on our productions. It has been embedded in the Arena Stage blog, and at any given moment, a patron can see what he is up to. Since he leads the artistic development team, his days are pretty interesting...much more so than mine. Really, who wants to know we just bought another ad in the newspaper?

Institutions as Media Outlets

In this moment of substantial change, most companies are looking inward to determine what adjustments need to be made to their business models to flourish in today's new economic climate. Significant shifts need to be made to address the new reality, and that new reality includes taking a hard look at how consumers get information about the arts.

Since the mid-1980s, newspaper circulation has been declining in the United States, but the current economic crisis has thrown gasoline on the fire, causing huge losses for newspapers nationally. Just recently we have seen four major newspapers cease print publication: the Seattle Post-Intelligencer, the Rocky Mountain News, the Tucson Citizen and the Christian Science Monitor. Additionally, four newspaper companies including the owners of the LA Times, the Chicago Tribune and the Philadelphia Inquirer, have sought Chapter 11 bankruptcy protection. Even before the rapid failure of many printed newspapers, arts coverage in many daily newspapers was shrinking, going from 912 column inches on average in 1998 to 702 column inches in 2003 according to Reporting the Arts II, a study conducted by the National Arts Journalism Program at Columbia University.

A huge shift in communications is about to occur away from organizations pitching stories to mainstream media for coverage and toward setting up institutional distribution channels to cover stories themselves. We have seen this in the past decade as the ways we communicate with our customers have become cheaper, quicker and more segmented. We now have e-mail lists, websites, direct mail, telemarketing, social networking, online video distribution, podcasts, photo streams, and blogs. Some large organizations can currently reach more than one million people using these distribution channels. Considering the New York Times has a circulation of 1.6 million, these distribution channels which used to be considered on the fringes of communications have become almost as powerful for some companies as their local newspaper.

Barack Obama learned in his presidential campaign that if he invested wisely in cultivating his own method of communicating with his supporters, he would be able to use that method to speak directly to the American people when in office. Now President Obama has an e-mail list of 13 million Americans that he uses to garner support for political initiatives. This list is five time larger that the daily circulation of USA Today, the newspaper with the largest circulation in the United States.

Just as we have invested in media relations over the past decades, we now need to heavily invest in developing our own distribution channels and our own content. This is a two pronged approach--we need to develop the infrastructure to distribute content and the ability to create content that our customers will want to consume. It is a significant change in strategy that is now upon us.

Make your voice heard with your advertising dollars

This past Friday, I was on a conference call with several marketing and PR directors from various LORT (League of Resident Theaters) theaters. The purpose of the call was to plan discussion topics for the upcoming LORT conference in Los Angeles. We all agreed that the disappearing arts coverage in local and national press is one of the top issues currently facing non-profit arts organizations, and we recognize that the shrinking coverage has forced arts organizations into becoming content providers themselves. As we make the shift from pitching interesting stories for reporters to cover to covering them ourselves through various media channels (YouTube, Facebook, Blogs, Twitter, Flickr, BlipTv, etc), I believe it is also important to fight for the remaining arts reporters and critics.

We all know that the newspaper industry is in a world of hurt right now. The Rocky Mountain News, one of Denver's largest newspapers, has already bit the dust, and it looks very likely that the Seattle Post-Intelligencer will do the same. The chicago-based Tribune Company has filed for bankruptcy, and the New York Times doesn't look so hot either. Locally in DC metro area, we have seen the Baltimore Examiner go out of business and rumor on the street is that the Washington Post lost $40 million last year, however it owns Kaplan which made $50 million so they can continue to operate in the red, at least for awhile.

With all of this, you can imagine that the pressure is high to cut costs, and why not cut arts coverage? We are perceived by most not to be as valuable as other industries (I am thinking of the huge debate over the $50 million stimulus money for the NEA in the $800+ billion stimulus package, and how much controversy there was over that). So that is where we must step in. We need to make it clear that if a media source cuts arts coverage it will do so at the cost of advertising dollars.

It has been successful in the Washington metropolitan area. Just recently, a media source was going to cut a major source of arts coverage, going so far as to tell the writer that within weeks, she would be released. The League of Washington Theatres along with the management of several of the area's largest arts organizations sent a letter to the company outlining the likely economic consequences of the decision. Soon thereafter, the decision was reversed. Since the company changed its mind, and continued to support arts coverage, I have vowed to increase the amount of advertising I am spending with them this year, and am proud that they continue to be a great source of information on the local arts scene.

As I advocate to reduce advertising expenditures with companies that eliminate arts coverage, I would encourage you to consider increasing your advertising buys for companies that show an increased dedication to the arts. Locally, Arena Stage hasn't traditionally supported the DC Examiner (a local print publication) or DCTheatreScene.com (a local theater website). However, both have recently made efforts to increase their arts coverage, the former by printing a theater and museum guide and the latter by doing significant website improvements. Arena Stage now supports them both, and I plan to continue to do so.

The arts are an economic engine. We are a source of revenue, and it is about time that we are taken seriously. Don't be shy--vote with your advertising dollars.

Programmatic vs. Institutional Marketing

At the invitation of my Board Chair, I had the pleasure of attending a speech at George Mason University given by Michael Kaiser, President of the John F. Kennedy Center for the Performing Arts and author of The Art of the Turnaround: Creating and Maintaining Healthy Arts Organizations. Prior to his speech, I was introduced to Mr. Kaiser, and as I reached out to shake his hand, I secretly hoped that some of his wisdom would transfer from him to me through osmosis. It came as a bit of a surprise that when I introduced myself, he knew who I was, and mentioned that he enjoyed reading my blog.

I admire Mr. Kaiser not only for his expertise in arts management, but also for his tremendous passion for helping struggling arts organizations. Most arts organizations are looking inward during this moment of economic downturn, trying to figure out how to adjust what they are doing to address anticipated future challenges. Mr. Kaiser on the other hand has made it clear that the Kennedy Center has a responsibility as a leader in the field to reach out and help other struggling organizations. I know that times are tough, and the economy has to be impacting the Kennedy Center as well, but even with less resources, the Kennedy Center has launched a new initiative called "Arts in Crisis" which focuses on providing planning assistance and consulting to struggling arts organizations throughout the United States. It truly takes a visionary leader to expand services in an attempt to fulfill an obvious need when resources are so scarce. And this is something Mr. Kaiser is personally committed to as he was proud to share that he has personally taken on consulting for 10 small arts organizations as part of this initiative.

That all being said, Mr. Kaiser discussed the difference between what he labels programmatic marketing and institutional marketing. Prior to reading his book, I had never heard of this distinction, but now find his argument incredibly valuable. He defines programmatic marketing as marketing that is designed to promote a certain activity (i.e. to sell tickets). Conversely, he sees institutional marketing as activities that are designed to promote the institution. He makes the argument that too many organizations do too much of the prior, and too little of the latter. I would have to agree with him. Most marketers feel comfortable with programmatic marketing because it has an obvious, quick and measurable impact (mostly measured on ROI, or Cost of Sale, etc). We don't feel as comfortable in institutional marketing because its not as easy to measure, and it takes a dedicated effort over an extended period of time to see the results.

That being said, the results of a well executed institutional campaign can be remarkable. Mr. Kaiser notes that an eight year aggressive institutional marketing campaign has been mostly responsible for a 250% increase in contributed revenue at the Kennedy Center, and when he was previously at Alvin Ailey, they doubled their fundraising in two years. A programmatic marketing campaign is limited in its abilities and scope because it lives in a finite period, where institutional campaigns pay dividends in both earned and contributed revenue because they help brand the institution and sell the vision. Why be satisfied with selling a slice when you can sell the entire pie?

To me, it all goes back to planning. Mr. Kaiser advises organizations to constantly be working in the future -- planning seasons three years in advance, crafting a long term vision, etc. Too many of us get bogged down in the day to day, and who can blame us, we are only human. When there is a fire, we all concentrate on putting it out, but if we are constantly putting out fires, it is good to be reminded that we also need to put effort into digging new wells, for without new wells, we will eventually run out of water for the fires.

What should I cut?

I have read a couple of reports in the past few weeks that reported that most arts organizations are planning to reduce their expenses in the next year in response to the economic crisis. If you find yourself in this situation, you might be wondering what to cut. Just my two cents...

1. Printed Programs. Do you really need a four color, glossy, forty page program for each performance? Programs are created to provide vital information for audiences. If you take a serious look at your programs, I bet you can find numerous ways to reduce costs. The easiest -- reduce the number of pages in your programs, use lighter stock paper and avoid doing anything in four color.

2. Advertising. This is a tricky one. I wouldn't normally advocate for cutting advertising expenses, however as previously reported, I am finding that you can get 15-20% more for your dollar these days then you could even six months ago. If you can keep your same level of exposure for less, then count the savings. If you can't, then either get more aggressive with your negotiations or look somewhere else for cuts.

3. Audience Communications. How many of us spend thousands of dollars on printing audience handbooks, complete with performance calendars, box office policies, subscriber services, etc. More than 90% of the audience at Arena Stage regularly uses the internet. Save the money on printing these types of materials, and make the information easily accessible on your website.

4. Travel/Professional Development. Even though I am a huge believer in professional development, this might be an area in which you can cut back. Instead of flying cross country to attend a conference, is there one closer to home? can you stay with a friend? can you take a bus instead of a plane (for those traveling between DC and NYC, take the $20 Bolt Bus)? If you do need to travel, then Priceline your trip. If you name your own price on Priceline for your flight and hotel, you can save hundreds of dollars. You might not find yourself staying in the conference hotel, or you might miss a session or two because of flight times, but the savings are definitely worth it.

5. Invest in areas where your ROI is higher. Washington DC is perhaps has the most competitive theater environment outside of New York City. With that being said, I am always looking for ways to get a higher return on investment. At Arena Stage, I normally get a 6:1 ROI on traditional advertising expenditures. However, my ROI for the investment I make in group sales is 20:1. Next year I am slightly reducing our advertising budget and redirecting those funds into group sales.

6. Telemarketing. In October, Arena Stage ended its telemarketing campaign at our normally scheduled time. However, I found that telemarketing was a very effective tool for driving more sales, but I had maxed out my expense line for telemarketing services. At the same time, I noticed that our box office would experience lulls in their work, mostly between shows. We have always considered our box office to be a sales office, meaning they are not just responsible for taking orders, but also for selling. I proposed adding telemarketing to their responsibilities during the lulls. As you can imagine, at first this wasn't received enthusiastically. However, we offered sales associates incentives for making sales, and soon they started performing at the same level that our telemarketing firm was. We have some great sales people! Maybe that is why we are the best sales office in the world.

7. Make sure you RFP all your major projects. The communications department has an internal rule that we live by: if we anticipate that a project will cost more than $10,000, then we send out a request for proposal (RFP) and get competitive bids by at least three separate companies. I instituted this last year when I learned that we hadn't competitively bid our major printing projects in years; we kept going to the same company year after year. The first project that we sent out for a competitive bid was our season brochure. We got three bids, including one from the company we had consistently used for years. The company that we had used for years provided us with a bid that was $20,000 more expensive then the next expensive bid. We enjoyed working with them, but made it clear that if they couldn't match the second most expensive bid, we would go elsewhere. Guess what -- we saved $20,000 because the company matched the other competitive bids.

8. Press Materials. Are you still mailing out press releases, faxing PSAs and putting together heavy media wrap packets to ship to actors, designers and directors? Stop it all. Most editors and writers want press releases e-mailed to them these days. It has to do with timing. Imaging telling Editor A that Editor B scooped him on a story because Editor A's press release was still in the mail while Editor B received his electronically. Unless specifically asked by a major media personality, don't waste your money or time on purchasing expensive letter head, printing media releases, and then spending the money to mail them out. You can also send out PSAs and media wrap packets via e-mail (with links to photos, reviews, etc). I would also experiment with sending press invitations via e-mail. I bet the media doesn't cover your productions because they are enticed by your beautiful, four color invitations.

9. Posters. Be honest, how many of us print hundreds of posters for each show with the honest intention of placing them everywhere a couple of weeks before a show opens. Then as we get closer, we run out of time as well as places to stick the posters, and only use maybe 100 of them, throwing the rest away. Either find a more efficient system of distributing posters, or don't print them. They don't help you if you have to throw them away.

Renegotiate Your Advertising Contracts

Everyone is tightening their belts these days, and as much as I would like to moan and groan about doing more with less, I worry more about those companies that aren't challenging their staff to come up with inventive ways to maximize revenue while minimizing cost.

At Arena Stage, I am currently in the process of renegotiating all of our major advertising contracts. Most of our major advertising contracts are for the entire fiscal year, and I leverage the entire amount I plan to spend to get better rates and more promotional opportunities. So in essence, we have signed contracts until the end of the fiscal year, and although most people would think that would limit your ability to renegotiate, major media sources understand that if they aren't willing to renegotiate, then you will spend less when the contract renewal comes up.

Don't be shy! Trust me, vendors won't make a deal with you unless they are going to make a profit, so get the best deal that you can. It is the wild west out there. Companies are losing advertising dollars right and left, and that has made them hungrier for business. Throw your contracts and their rate cards out the window, and start from scratch. If they aren't willing to renegotiate, don't use their product.

Most arts organizations are planning for a 10-20% reduction in revenue during 2009. To remain healthy, you need to negotiate advertising contracts that get you as much as you had in 2008 for 10-20% less than what you spent.

There are very few advertising outlets that are so powerful and large that they will refuse to negotiate with you. In days past, newspapers could claim this status, but falling revenues and declining readership has changed all the rules. Tell your advertising reps that you view them as a partner--if they help you become more successful, you will spend more money with them. Your fates are tied together. Make them work for you. And if they aren't willing to renegotiate a better deal in this horrible economic climate, go to one of their competitors. If they take care of you, remember the gesture and take care of them when it is time to renew your advertising contract.

Want a bailout of the arts? Don't make the ask in an Armani suit

When the big three automotive CEOs flew separate private jets to Washington, DC to plead for public funds, I remember thinking to myself that I was thankful that I was a publicist and marketing director for a non-profit arts organization. The type of arrogance it takes to fly corporate jets to ask for billions of dollars in public aid surely could only be found in the private sector.

However, recently there has been a dust up about executive compensation in the non-profit arts sector, particularly because as the economy tightens, more and more arts organizations are pleading their case with stakeholders, some going as far as Mr. Kaiser in asking for a government bailout of the arts. Although I have tremendous respect for Mr. Kaiser, I am convinced that perhaps he isn't the best emissary for the non-profit arts--how does it look for a non-profit arts administrator who makes more than $1 million a year in salary to be the champion of the suffering arts scene?

Two separate stories have broken in the last month questioning the salaries of non-profit arts administrators. The most recent reported that Joe Dowling, Director of the Guthrie Theater in Minneapolis, made $682,229 last year, which represents 2.6% of the organization's $27 million budget. When compared with similar sized and larger organizations, Mr. Dowling's compensation seems high. Todd Haimes, who leads New York City's Roundabout Theatre which is twice the size of the Guthrie, makes $487,439 per year (and the dollar doesn't stretch in New York like it does in Minnesota). Similarly, Andre Bishop, the Artistic Director of Lincoln Center Theater which is 25 percent larger than the Guthrie, makes $428,183. So why is Mr. Dowling's compensation not in scale with his peers, or even peers at larger organizations? The second recent story takes a look at proposed legislation in San Francisco which is trying to limit non-profit executive compensation to a maximum of six times the salary of the lowest paid employee.

Executive compensation isn't a new concern. In the past couple of years, we have had several large controversies over this issue, including the infamous Lawrence Small, previous Secretary of the Smithsonian, and Josiah Spalding, Jr., CEO of the Citi Performing Arts Center. Mr. Small left the Smithsonian under a lot of pressure and controversy surrounding his lavish spending habits, which included a $15,000 receipt for the replacement of French doors at his home and spent $48,000 for two chairs, a conference table and upholstery for his office suite. In Mr. Spalding's case, he was awarded a $1.265 million bonus in 2006 even though he presided over five straight years of budget deficits, cuts to programming, and a dramatic drop in performances at the Wang and Shubert theaters, which the Citi Center operates.

Over the past year, I have read numerous articles about the woeful state of symphony orchestras, which are trying to remain competitive with downloads of classical music and are struggling to develop sustainable business models. Just in the past couple of months, the Santa Clairta Symphony, Pasadena Symphony, Kansas City Symphony, Las Vegas Philharmonic, the Virginia Symphony, the Detroit Symphony, and the Cleveland Orchestra have reported major financial problems. But when you look at the top 10 salaries for Music Directors in the United States, one would conclude that symphonies are flush with cash. The conductor of the cash strapped Cleveland Orchestra is seventh on the list of the top 10 and makes $1.2 million a year. The lowest on the top 10 list is Osmo Vanska of the Minnesota Orchestra who makes $713,518 and the highest on the top 10 list is Lorin Maazel of the New York Philharmonic who makes $2.189 million.

On the flip side of the argument, there are CEOs in the private sector who are so linked to the success of their company that even rumors of their illness cause stock devaluation. Over the past several months, it has been rumored that Steve Jobs, the CEO of Apple, has a terminal illness, and these reports have caused Apple's stock to fall. The tie between Steve Jobs and the success of Apple is so strong that it lead to Mr. Jobs holding a press conference where he released an update on his health, stating that "reports of his death are greatly exaggerated." After this announcement, share prices for Apple jumped four percent. When the success of the organization is tied so directly to the CEO, it might be entirely appropriate to compensate them at such a high level.

Either way, this argument over executive compensation reminds me of something a professor said to me when in graduate school--"when making an ask for money or pitching a sponsorship, never arrive at a meeting with the prospect dressed in an Armani suit or a Walmart suit--either way you are screwed." I have to think that in some cases the arts are arriving at these meetings in an Armani suit.

Working with the Artistic Staff to create exciting Marketing Opportunities

In the past couple months, Arena Stage has planned and executed several exciting marketing opportunities as a result of the great working relationship between the artistic development staff and the communications staff. This relationship has existed for as long as I have been with Arena Stage, and most likely well before that. However, too many times the artistic department and communications department view each other as adversaries in other companies, and sometimes are in direct conflict with each other. For example, it might serve the communications staff better if a reporter sits in on rehearsal, but the artistic staff might be concerned about the reporter interrupting the rehearsal process. The current economic crisis has opened new opportunities for dialogue between artistic and marketing personnel because it is becoming more and more obvious that companies which successfully navigate this crisis will be those that pull together and find new inventive ways of doing business.

The Finding Yolanda Casting Search was the most recent collaboration between the artistic development and communications departments at Arena Stage. We are producing our fourth production of Crowns this spring. Most regional theaters in the United States have a production or two that they bring back on a yearly basis, most commonly A Christmas Carol. However, after several years, it can become difficult to procure media coverage for these types of productions. With this in mind, we were looking for a new angle to garner attention from the local press. At the same time, our casting department was feverishly looking for a young, talented African-American woman to fill the role of Yolanda. Our casting director, Daniel Pruksarnukul, came up with an idea that accomplished both goals--an American Idol like contest to find Yolanda. The communications staff and artistic development staff pulled together to create an all day open call. It was sponsored by ABC7 and News Channel 8, each of which aired free 15 second promos for several weeks leading up to the auditions. The Finding Yolanda Casting Search also received coverage in the Washington Post, ABC7, News Channel 8, Back Stage Magazine, WTOP, WAMU (local NPR), DCTheatreScene.com, TheaterMania.com and BroadwayWorld.com. We invited our audiences to come and watch the open call as well, giving our audiences an inside look at what happens at auditions. The winner was announced on the ABC7 evening news.

This was a win-win for both departments. Casting found an extremely talented young lady to fill the role, and communications had an angle to pitch to the press.

Check out video of the winner. Congratulations Zurin Villanueva! Looking forward to working with you.