Thursday, November 30, 2017

Tastemaking in a Post-Newspaper World

From time to time, I will write on topics of arts marketing and media on my new blog. When that occurs, I'll cross post here.

For November’s “Managing Expectations” article in American Theatre Magazine, I was asked to share my thoughts on the current state of theater criticism in the United States. Check it out: “Tastemaking in a Post-Newspaper World.” In the coming week, I'll post a companion piece as well. 

Sunday, August 27, 2017

New Blog - Managing Creatively

Dear friends,

For those who have followed my arts marketing blog over the years, thank you! As I've transitioned from being a chief marketing officer to a managing director, most of my day-to-day activities are outside the realm of marketing. As such, I've been exploring writing on a wider array of topics.

After a three year hiatus, I've recently launched a new blog that focuses on arts management. It's called Managing Creatively. Please check it out:


Wednesday, May 11, 2016

New vs. Existing: A Time for Every Patron

This post is part of a series in conjunction with TRG Arts on developing relationships with both new communities and existing stakeholders through artistic programming, marketing and fundraising, community engagement and public policy. (Cross-post can be found at Analysis from TRG Arts.)

As a chief marketing officer, consultant and now managing director, I’ve participated in my fair share of marketing committee meetings. One of the most hotly debated topics is whether to focus resources on developing new audiences or on increasing loyalty to bolster return on investment and per capita revenue. Two camps usually square off – the artistic team and trustees vs. the professional marketing staff.

Can you guess which sides of the argument they typically represent?

Nothing is sexier to most artistic directors and trustees than developing new audiences. On the other hand, marketing directors with limited resources are constantly trying to find ways to do more with less, which means developing ways to increase returns, and naturally, some shy away from audience development because it requires significant upfront capital, both monetary and personnel, with limited short-term gains.

Here are three things I’ve learned over the years…

1)      If your company is in financial trouble, a heavy focus on new audiences might be the nail on the coffin. The first order of business is to understand why you’re in trouble to begin with. I once had a client that was posting million dollar plus deficits year after year, and they couldn’t understand what was going wrong, as the number of new households that were purchasing was up 24% in two years. But, for every new person that was walking in the front door, twice as many were running out the back. There was an abrupt and substantial change in programming which accomplished what they intended – large numbers of new audiences were coming, however it also had the unintended consequence of driving an established core audience away. Subscriptions were in a free fall, but a new under-30 membership program was skyrocketing. The financials were problematic. It cost $0.13 on the dollar to renew current subscribers and $0.62 on the dollar to acquire new under-30 members, while at the same time, the per capita revenue from the under-30s was 42% less. If the company was capitalized well, over time the gamble might have paid off. But they completely underestimated the costs of a heavy acquisition campaign over multiple years, and found themselves in the position of taking loans from their endowment to cover payroll.

2)      If your company is financially stable, not investing in new audiences will slowly kill you. When I was the director of marketing and membership at the Smithsonian Associates, my immediate predecessor was somewhat legendary, known for being a great analytical strategist. I joined just as the world economy was starting to rebound from the global economic crisis, and to help shepherd the organization through rough waters, every department at the Smithsonian was asked to find ways to do more with less. On the surface, the data and financials in my department looked pretty healthy – we were spending less and revenues were steady, which was about all you could expect at that time. But under the surface was something troubling. To reduce cost of sale and increase ROI, a decision was made to cut expenses earmarked to acquire new visitors and patrons, and developmental money was jettisoned for new programs and experiences. For the time being, on paper, things were great. But in looking ahead, we didn’t have a pool of cultivated prospects to convert into members; even with a great membership renewal rate of above 85%, without new prospects and patrons, we were in trouble. The Smithsonian is the world’s largest cultural organization, and perhaps the most financially stable. It was clear that a sizable investment to develop new visitors and patrons would not risk the overall health of the organization, but without an investment, memberships would steadily decline thereby jeopardizing key programs in the coming years.

3)      Product is the most important of the marketing P’s in developing new audiences. When I was in my 20s, I was often hired as a technology and marketing consultant who was tasked with helping mature organizations reach Millennials. However, most organizations viewed audience development as a marketing activity, and few paid enough attention to product development. Facebook + Twitter + Snapchat does not = younger audiences. Those tasked with developing new audiences should work closely with their artistic colleagues to create experiences that are attractive to their targeted demographics. Without the right product, other strategies will fall on deaf ears.

In coming to Milwaukee Repertory Theater in 2013, I was fortunate to join a company that was on the rise. They had a talented staff, a relatively new Artistic Director that had excited audiences, and the stability of being a large LORT theater with a 60-year history. However, over more than a decade, the company had amassed an accumulated operating deficit of nearly $1 million and was coming off an unexpectedly rough year with some unusual circumstances leading to a near $375,000 operating deficit, although the company had increased in size by almost 20% in the prior three years. Along with members of the senior leadership team, TRG Arts and Management Consultants for the Arts, we conducted an exhaustive situational analysis of all of our business lines. One finding I did not expect – we were heavily underinvested in marketing, which for a company that has a 65/35 split between earned and contributed revenue, probably wasn’t good. Some wanted to increase marketing expenditures substantially and immediately to acquire new audiences, but the data showed that doing so would have exacerbated our underlying structural deficit. So, we decided to temporarily reduce our operating budget by nearly 5%, maintain our marketing expenditures, focus on building loyalty, and launch an aggressive fundraising campaign to widen our evergreen base of annual fund donors.

In that first year, we ended with a 5% operating surplus, and two years later, have not only restored all cuts, but have significantly expanded.  Also, our accumulated operating deficit stemming back to 2004 was completely eliminated, and we’ve been able to use operating surpluses to build cash reserves so that when the next recession hits (and it will), we’ll be prepared. Our operating budget is now the largest it has ever been supported by a business model that has proven to operate in the black consistently for three years. Circumstances have now changed. If we don’t invest in cultivating new audiences now, we will be in as much trouble in a few years as if we would have invested in new audiences just a few years ago. Data drives strategy. Don’t go on a hunch. And realize that sometimes there isn’t a right or wrong approach, merely the right time to pursue each.

Sunday, August 24, 2014

Fearing Fear Itself

Several months ago, my former employer Arena Stage hosted a series of conversations entitled “The Summit” curated by Washington Post theater critic Peter Marks. In the first of three conversations, Mr. Marks began the discussion by citing the falling attendance rates at theaters as put forth by the NEA’s most recent Survey of Public Participation in the Arts, and asking five theater leaders to discuss various factors that may have led to declining attendance. Towards the end of the evening, a question was asked about gender parity in regional theaters, both in the terms of female directors and playwrights. It set off a passionate discussion about why women aren’t better represented at our nation’s regional theaters.

Fast forward a couple of months, and we received news that San Jose Repertory Theater would be closing its doors after 34 years. Many of us knew that San Jose Rep had been struggling, and questions surfaced as to why a regional theater could not seem to sustainably operate in the resource rich Silicon Valley. Soon after the announcement was made, some began to declare that San Jose’s closing was due to their inability to deeply connect with their community. In an interview with the San Jose Mercury News, local scholar and director Tlaloc Rivas stated “This is what happens when your theater is deliberately indifferent to the diversity of your city.”   

As 501(c)3 non-profit organizations, we have a responsibility to represent our communities, and in some cases, our communities have changed or are rapidly changing and our arts organizations haven’t adapted. It is almost as if some are programming their organizations to reflect the 1960s version of their cities. But why? I believe this is occurring at least in part not because of the reasons that have already been discussed, but primarily as a result of fear. During the global economic crisis, several theaters exhausted their cash reserves and dipped into their endowments to offset plummeting sources of contributed revenue. Many survived, but emerged on life support. Earned revenue became much more of a driving factor as support from state and local government, corporations and foundations nose-dived. It became clear that in order to stay alive, many would have to rely on box office revenue as their primary revenue source. As marketers, we know that when looking at the 4 Ps of marketing (product, place, price and promotion), that by far product is the most impactful on box office revenue. In an attempt to adapt to the worsening economic environment, some theaters began to program “safer” seasons, and increased ticket prices to drive more revenue. Many adopted models that looked far more similar to Broadway than the regional theater just a few years prior. I don’t say this to be judgmental, only to illustrate that desperate times required desperate measures for some.  

As a consultant, I noticed that many of my clients during this time selected their seasons from a place of fear. And I couldn’t blame them. The one thing they could control was their operating expenses as no one could reasonably predict revenues. Shows got smaller, cheaper and less “risky” (though as I have previously blogged about, trying to determine what is “safe” in the theater can be a fool’s errand).Given their financial positions, one wrong move and it was over. Gone were the days of unrestricted operating grants, endowment draws and investment gains that could offset programmatic risks. Many Artistic Directors needed to ensure that the audiences they had would stay with them through the storm, and therefore, some programmed “tried and true” plays that they believed would please their audiences. Perhaps necessary at the time, this is not a forward-thinking strategy.  

Five years after the market crash, the stock market is at an all-time high, and experts are declaring that we’ve emerged from the recession. But some temporary programmatic measures adopted during the recession continue today at some theaters across the country. And I believe there is an easy explanation. Theatre Communications Group in its most recent Theater Facts reports shows that working capital at theaters nationwide has decreased by 82% from 2008 to 2012. In addition, growth in cash reserves lagged inflation by 16%. The working capital ratio for theaters dropped by 25% in four years. So, what does all this mean? Many theaters remain as risk-adverse today as they were during the height of the recession because there is no safety net. However, those that are waiting until sunnier days to make programmatic adjustments are living in a fool’s paradise. And I would argue that it is perhaps riskier not to make programmatic adjustments to better reflect the communities you serve than it is to “play it safe” and make programming decisions for an audience that is rapidly decreasing.  

Some unsolicited advice for arts organizations that find themselves in this situation: 

1)     Build an artistic capital fund if possible. Typically, I would say that nothing is less sexy than hitting up donors to help create cash reserves. But, you need risk capital. If you are living constantly on the edge, you’ll never be able to look beyond today. And as your community changes, you’ll stagnant. Consider this an innovation fund. Something that gives you the freedom to risk and improve without the fear that a small failure will cause your demise.

2)     Look at the unmet needs in your community, and develop programming for them. You don’t have to radically change everything overnight, but take incremental steps to program to underrepresented and underserved populations in your community.

3)     Marketers must become relationship builders as much as we are revenue generators. To be successful, we’ll need to develop new relationships and outreach strategies. I’m impressed by recent initiatives at Pasadena Playhouse riffing off concepts pioneered by Woolly Mammoth Theater Company’s Connectivity Program where they have marketing staff that are much more akin to community organizers. If you are new and trying to build new relationships, don’t be surprised if some view you as suspect. In some cases, you might be speaking with someone, to use a term coined by Donna Walker-Kuhne, who has never been invited to the party before. So they may be curious why now?

4)     Don’t give up quickly. Don’t expect immediate results, and avoid developing transactional relationships. This is about becoming a better citizen of our communities. Arts organizations that have excellent track records for developing young and diverse audiences have committed countless hours and significant resource for years.

5)     Listen. We don’t operate in vacuums. We operate in complex and evolving communities. Don’t assume that you know what’s best for your community. Invite people into the process. Hear their voices. You may be much more successful at certain initiatives than you thought, and you could find that you need to dedicate more time and attention to initiatives you’ve never considered. If you are a larger institution, be careful that national aspirations don’t trump local needs. Many of us operate in both national and local communities, but unless you are a destination organization, your audiences are local. I think I’ll call this the Eric Cantor principle.

6)     As we’ve been taught, the biggest thing to fear is fear itself. I’m always amazed by the number of managers who would rather stick with a failing business plan that is destined to lead to disastrous results than risk throwing it out the window for a shot at success. Why rearrange the chairs on the Titanic? Put on a life vest and take a leap. In an attempt to keep your organization afloat by maintain status quo, you may ensure you’ll be alive tomorrow but you can be certain you’ll be dead soon thereafter.

Adopting temporary tactics to whether a storm is perfectly understandable in some respects. But non-profit arts organizations cannot adopt long-term strategic plans that focus primarily on staying alive. If we aren’t fulfilling our missions or serving our communities as they are today, then what is the point? We have an obligation (and the privilege) to produce art that is reflective of the diverse communities we serve. To employ artists that push us beyond our comfort zone. To engage, develop and nurture a heterogeneous talent pool that challenges us to examine the issues our communities grapple with from multiple perspectives. And if fear of taking a leap into the unknown is what is holding you back, what you really should be afraid of is becoming irrelevant – because I can guarantee that will happen. And then it is over.

Wednesday, July 24, 2013

On Hiatus Until Fall

Hello world. Sorry I haven't participated as much as I usually do both on this blog and in dialogue on other social media outlets. As I've accepted a new position as Managing Director of Milwaukee Repertory Theater, all of my energies have been focused on relocating to a new city and learning about my new theater. Looking forward to reentering the blogosphere in the fall, and to participating in conversations in the near future!


Sunday, March 03, 2013

What if you didn't have to guess?

In decades past, the success of a marketing director depended heavily on his or her ability to predict the future, often times by guessing. Guess well, and you were a success. Guess poorly, and your marketing career was short-lived. Marketers became adept at reading the tea leaves, and depending upon their gut and experience to make educated guesses.

As my friend Rick Lester says, "prayer should not be a marketing strategy." On this blog, I've written several times about the importance of using data to make decisions. Often times companies have years of transactional data that can be invaluable when developing strategy for future campaigns. That said, I've somewhat neglected another important tool that I've used throughout my career to help guide decision-making - market research. Combined, market research and data analysis form a formidable team. One should not be chosen over the other, but they should be used in tandem, and if done so, the need to guess is almost virtually eliminated.

Data analysis is best used to help inform future operating decisions that closely align with past performance. For example, when rescaling a house, marketers can be relatively certain which seating sections can withstand a price increase by analyzing sales patterns and looking for sections that are in constantly high demand. We can also tell which households are most likely to subscribe and what package and price point to pitch based upon their interactions with us. But what happens when you are faced with the unknown? Over the years at Arena Stage, I've been faced with challenges that have very few, if any, precedents. There wasn't any data to pull from, either internally or from other companies. We were in uncharted waters. And that's when market research became critical.

Since moving to Washington, DC seven years ago, both at Americans for the Arts and Arena Stage, I've depended on the wise counsel of Mark Shugoll, CEO of Shugoll Research.  Throughout the years, Shugoll Research has conducted many studies that have helped inform my decision-making, and below are just a couple of instances where market research was invaluable:

Arena Restaged. In January 2008, Arena Stage moved from its SW DC home into two temporary locations - a theater in the basement of a Marriott in Arlington, VA and the Lincoln Theatre in NW DC on U Street. We would remain in these temporary locations for two years and eight months while the Mead Center for American Theater was built. During that time, we had to minimize patron attrition caused by the move, and work to grow our audience base, as the new building would require a significantly increased patron base. I searched the country for a good precedent to learn from, but not a single one surfaced. Feeling on our own, I turned to Shugoll Research to help map out a strategy. I wanted to know what barriers existed for our patrons in moving to our temporary locations. What would motivate them to stay with us through the construction years? What competitive advantages existed at our temporary locations that were good selling points? How we could make the move less onerous? We tested messaging, sales strategies and tactics. From that, I learned a great many things. I learned that if our patrons got lost on their first trip to our new theaters, they wouldn't return. I learned that we had to make sure that parking and public transportation was readily available. I learned that dining options were incredibly important. From this, I spent months on signage plans. With the Crystal City Business Improvement District, we installed more than 100 new directional signs within a two mile radius of our temporary theater in Virginia. In coordination with the MidCity Business Association, we aggressively marketed the restaurants on U street and offered valet parking for every performance, as the neighborhood had very few parking options. We sent out personalized websites to each of our subscribers which among other things offered up step-by-step directions from their house to the new theaters. For these efforts, Arena Stage was recognized with the Box Office of the Year Award from INTIX and the Helen Hayes' Washington Post Award for Innovative Leadership in the Theatre Community. More importantly, we were budgeted to experience 7% attrition during the move and only realized 1.9% - and it all started with market research.

Branding. Forget the high gloss, four color brochures that list your mission statement and vision. We all know that our brands, regardless of what we say, actually live in the minds and hearts of our customers. Over the years, I've almost always found a disconnect between what an institution thinks their brand is and what their customers view their brand as being. In 2008, Shugoll Research conducted a series of brand focus groups for Arena Stage. Only two years later, we would be opening the Mead Center for American Theater, so as a new marketing director, I wanted to test the current state of our brand before launching a rebranding campaign repositioning Arena Stage as a national center for American theater. Inside the company, it was clear to most at the time that Arena Stage was a home for American voices, something that Molly Smith had focused on since coming to Arena Stage in 1998. But when tested in focus groups, less than 20% of our subscribers and donors knew that we focused on American voices, and almost none of the single ticket buyers. We had to be much more aggressive in marketing our brand, so we developed a tag line ("Where American Theater Lives"), commissioned a series of spotlight articles on the American voices in each season, developed a new color palette which was a play off of red, white and blue, and eventually put the word "American" in our new logo and name. Two years later, we retested and found that more than 80% of those asked knew our American focus.

Customer Service. As I've written about previously, I view customer service as a very valuable competitive advantage. So, how is your organization doing? Beyond diligently tracking and responding to complaints, what are you doing to monitor customer satisfaction? We've hired Shugoll Research to develop and deploy customer satisfaction surveys, and benchmark us against peer organizations and ourselves for the past several years. I'm proud to report that we've received "industry leader" marks every year since 2008.  But more importantly, each year we learn where we can improve, and we know where we should invest time and resources to improve our customers' experience. For example, in our first year in the new building, we received exceptionally high marks for our parking lot; we were delighted to see that our parking attendants were routinely going above and beyond to take care of our patrons. And the patrons noticed. That said, some of our elderly patrons reported that it was a challenge to walk up the ramp from the parking garage to the main lobby. So we responded by offering valet parking at the same price as standard parking for those who needed some extra assistance.

Pricing. We spend a lot of time discussing pricing at Arena Stage. As marketers, we want to devise strategies that keep our institutions accessible to our communities all while developing price points that lead to sold-out houses. Get too aggressive with your prices, and your percent paid capacities will drop (hence why the Metropolitan Opera announced that it would be lowering prices next year). But if your prices are too low, then you are leaving money on the table, something that most non-profit arts organizations can't afford to do in today's economic climate. So are you charging the right price for the right seat at the right time? To help us navigate pricing, we sought the assistance of TRGArts and Shugoll Research. TRGArts created heat maps, advised us on the rescaling of our halls, and analyzed sales data to determine optimal price points. Shugoll Research conducted focus groups and surveys to determine price elasticity, and to procure feedback from customers. Did our patrons think we were over-priced? would they be willing to pay more for certain dates/times? what could we do to make our pricing more attractive to our patron base? One of the most interesting questions we ask is how satisfied patrons are with the value we provide. Each year we ask the question, our satisfaction ratings on value are in the "industry leader" range indicating that customers perceive that they are getting good value for the money they spend on a ticket. Something every marketing director loves to hear.

The days of reading tea leaves, consulting the gods, and leaping into the unknown are over. A healthy combination of data analysis and market research allow modern day marketers to make informed strategic decisions. I for one am thankful, as I've never been particularly lucky when it comes to guessing. In decades past, I know I would have been fired.

Sunday, February 03, 2013

The Subscription Equation (and other tactics)

Probably the most frequent question I am asked is if I believe subscriptions are dying.  And if you would have asked me five years ago, I would have answered in the affirmative. I, like many others, believed the subscription model was outdated--a worn out old chestnut that needed to be replaced. I even had data to prove it. From our peak in 2002 until 2007, Arena Stage had lost 40% of its subscriber base! I was convinced we had held onto a failing business model for far too long, until I started testing alternatives. 

In 2008, working with Shugoll Research, we developed several focus groups with specific target audiences, including current subscribers, lapsed subscribers, multi-show buyers and single ticket buyers. During these focus groups, we presented several alternatives to the traditional subscription, many of which had been recently introduced by other theaters, and to my complete horror, none of them tested anywhere near as well as the traditional subscription. Even if I wanted to abandon our subscription model, I didn’t have any attractive alternative.  Then the realization came – if our customers still want subscriptions and our subscriber base is rapidly declining, then the way we sell, market and promote subscriptions if fundamentally flawed (it should be noted that we also tested satisfaction with artistic product and found that was not a challenge for us). In short, we were killing subscriptions. 

As our 2012-13 season comes to a close, I’m happy to report that we have experienced significant increases in our subscription base for four consecutive seasons, almost achieving a record high number of subscribers and  since 2008, have increased our subscription revenue by 115%. Even more surprising, the turnaround started to occur in 2009 at the height of the global economic crisis and a full 1.5 years before the opening of the new Mead Center for American Theater.  

If I were to articulate the formula of our success, it would look like this:

great artistic product + best seats + best price + outstanding customer service = more subscribers

Artistic Product: Whether we like to admit it or not, the most important of the 4Ps of marketing is product. If your customers are not satisfied with the artistic product of your organization, you will not see an increase in your subscription base. 

Best Seats at the Best Price: Being able to get the best seats in the house at the best possible price is a powerful value proposition for subscribers. If you have a robust subscription base, often times the only way to get the best seats in the house is by subscribing. Make sure to message that in your sales materials. Also, be very careful of undercutting your subscriber average ticket price, particularly at the last minute. A substantial last minute discount may provide a lift to an under-performing production, but the long term side effects could be much worse. 

Outstanding Customer Service: Let’s be honest – customer service usually sucks these days. So it’s the perfect opportunity to shine. Steward your subscribers like development does their donors. Be proactive in finding ways to provide exceptional service. For example, if inclement weather is coming, instead of waiting for subscribers to call you to exchange their tickets, why not send them an email alerting them of the inclement weather and offering to make the exchanges on their behalf? And if you don't already, find ways to thank your subscribers throughout the year. For example, there is a theater on the west coast that partners with a winery each year to give their subscribers a free bottle of wine when they renew their subscriptions as a way of thanking them for their support.

Beyond the formula, below are a couple of significant strategic changes we made that made all the difference: 

Lengthen the Subscription Campaign: Prior to 2009, Arena Stage would announce its season in March and would continue to sell subscriptions until October, providing for an 8 month subscription campaign. These days we begin our subscription campaigns in January and sell through March of the following year, thereby lengthening our campaigns to 15 months.  Avoid delaying the start of your subscription campaign at all costs. Each week you lose will be very costly, and you cannot replace lost weeks. 

Don’t Forget About Upgrades: When I was taught how to market subscriptions, I learned to break a subscription campaign into two parts: renewals and acquisitions. Today, we have an additional focus on upgrades. Our goal is no longer just to renew our subscribers; we want to upgrade them as well year after year. Primarily we focus on getting subscribers to increase the number of plays on their subscription, but you can also have them upgrade into better seats, add parking to their orders, or increase their annual fund donation. This year we are even experimenting with add-ons for café meals to great success. In FY13, almost ten percent of our subscription base upgraded into larger packages, which doesn’t sound like much until you consider that amounts to roughly $175,000 in additional revenue. On top of which, full season subscribers have a renewal rate 25 percent points higher and give donations that are 4 times larger than partial season subscribers.  

Speak to Subscribers Like You Know Who They Are – Because You Do: Gone are the days when you can create one beautiful season brochure that speaks to all of your patrons, and then mail it over and over again until you beat people into submission. Subscription renewals and solicitations should be highly targeted. You know what types of productions each patron likes and on what nights they like to attend. If you sell café meals and parking through your box office, you even know if they like to park and what they like to eat. You know if they are a full price or discount buyer, how many shows they attend a year on average, and how many people are usually in their party. So why are we still wedded to one size fits all solicitations? Our job is to get the right offer in front of the right prospect at the right time. And we have all the data we need to accomplish that. 

Develop a Sales Pipeline.  Even up to a few years ago, we would mail subscription solicitations to traded lists. Then we started to look closely at our response and tracking reports. Guess what – we found that list trades were not working, not even close. It would have been just as effective to drop season brochures out of a helicopter over the city. And this was considered a “best practice” that every major arts organization in the city bought into. However, we were not measuring efficacy. The failure of these campaigns is easy to understand. In short, we were asking people to marry us before we went on a first date. Most of these targets had never seen a show at Arena Stage. Why would they invest hundreds of dollars when they had never stepped through our front doors? We changed tactics and concentrated our efforts on developing a sales pipeline. We would trade lists for single tickets, primarily to our most popular productions. This in turn would create an influx of new single ticket buyers. Once they had their first experience at Arena Stage, we would send them an offer to return to a second show. Once a patron had seen two or more shows, the likelihood that that would then respond to a subscription solicitation quadrupled. Don’t waste time and money mailing to poor prospects. Instead concentrate your resources on developing more multi-show buying patrons as those will be your best leads in your next subscription campaign. 

Testing and Failing. The only way to succeed is to fail. The key is to succeed on a grand scale, and fail on a small one. Aggressively measure the success of every campaign, no matter how small. And test something new at least every week. Tactics will change from year to year, and you’ll need to adjust in order to maximize return on investment. As we doubled our subscription revenue over the past four years, we actually started to spend less as we grew more efficient. For example, I like to test new offers in our telesales room. Over the period of a week, we may have three or four offers in the telesales room. By the end of the week, after a thousand or so calls, we usually have a clear winner among the offers tested. That offer is then rolled out in an email solicitation, and if it responds well, then we’ll include the offer in a large direct mail campaign and then test it against the current control package to see if we achieve a better ROI.  

If you are currently experiencing less than stellar results on your subscription campaign, before throwing the baby out with the bathwater, I’d encourage you to examine each of the variables in the subscription formula above, and then vary your tactics to see if you get better results.  Sometimes it isn’t the model that is dying, it is how we apply the model that is responsible for our underwhelming results. At least it was in our case.