In the arts (and elsewhere), competition is a bigger issue than most people are willing to admit.
Now that’s a provocative statement. But in my experience in the arts, time and again I have seen organizations make the mistake of underestimating the competition. And it is impacting arts organizations in their ability to grow and retain audiences, and through this deliver upon their mission. As arts leaders we need to become more cognizant of who we’re playing against, what their strengths are, and how best we can compete with them for audiences.
A lot of what follows is directed towards capturing the single ticket buyer rather than the subscriber audience, but we must remember that nearly always subscribers start out as single ticket buyers. If you can’t get and keep the single ticket buyer then you definitely won’t have the subscriber.
And to get the single ticket buyer you need to rethink your competition.
Your competition is bigger than you think
You need to expand the horizon of what your competition is. Anything that can compete for time and money that would be spent on your organization is your competition, plain and simple. It’s not just the other choir, the performing arts center one town over, or the museum down the road.
Competition is anything that is in the set of activities that your audience considers when choosing whether to attend your organization.
Let’s look at an example. Imagine you’re a performing arts organization running a show on a Friday night. You’re not just competing with any other show that’s running at the same time. You’re competing with every other alternative that a person has to attending your show.
Going to the baseball game? Competition.
Having a romantic dinner at a nice restaurant (or a boozy one at a lively bar)? Competition.
Late night hours at the museum? Competition.
Seeing a film at the local cinema (or just watching Netflix)? Competition.
Staying at home playing video games? You better believe that that’s competition.
If you want to get really creative (and we should), even the idea of staying at work late to get more done on a project counts as competition.
Your competition is bigger than you think.
All too often organizations base their strategy on the most immediate competition and leave it at that. It’s a fundamental mistake. Your audience isn’t thinking like that when they make a choice. Neither should you. Once you recognize the breadth of what you are competing against, only then can you start to assess how you can compete against it.
Your competition is better resourced than you are
Which leads to the next hard truth. A large proportion of your competition is going to be comprised of for profit, high efficiency, low cost operations. Some of them will be regional, national, or even global level entities able to leverage economies of scale to deliver insights into how their customers behave. Many will have entire teams devoted to analytics and market research.
Why? Because they need to get ahead of the competition (which, by the way, is you).
To give you an idea, consider the baseball game from before. Baseball is historically a game of numbers, pored over by statisticians and analysts. But the Moneyball phenomenon doesn’t stop at the edge of the field. Teams know that their success is also achieved by having crowds at games, and a solid fan base that comes back year after year. So teams are turning the analysis outwards from the field, looking deeply at the customer journey process. They know how their customers like to buy tickets, and optimize the process. They know which hot dog stands get the most traffic, and direct their resources (and upselling) accordingly. They even know how to target families at the right age to build lifelong team loyalty (I know of a soccer team that has applied research like this to successfully target and build a youth following right in the backyard of their biggest rivals).
They do this because they know that to stay in business for the long term, they need to understand how to engage the customer at all points, building and maintaining loyalty, increasing the barrier to switching to a competitive product.
And your competition has more money, more time, and more data. If you want to compete with them you have to outmaneuver them, become more agile. As a starting point, use their insights to direct your research. There are plenty of case studies about how it’s done – they’ve put in the effort to work out how to do it the first time, and replicating it is a lot cheaper.
Substitutes can be complements (but also vice versa)
But you might be thinking that not all competition is “real” competition. After all, people go to restaurants before shows, and museum goers tend to like to go to performing arts. If my audience likes opera then they’ll probably like classical music. And so on.
And you’re right. The data that is out there backs this. There’s a lot of complementarity in the arts sector, which is to say that people who go to one art form tend to go to other art forms. And it doesn’t stop there. Economic impact studies such as AEP-IV demonstrate that US audiences spend on average $24.60 per person on non-arts activities like restaurants and shopping every time they go to an arts event. So surely it’s not an either-or proposition.
Of course it isn’t, over the long term. And you can take advantage of this through knowing your audience. If they like other art forms you make sure to collaborate with those providers to ensure complementarity by (for example) not scheduling offerings on the same night. You can partner with organizations to develop offerings that have even stronger value to the customer, and that lower the joint resources required to deliver that offering. An example of this is Enjoy The Arts, which brings together arts organizations across Cincinnati to collectively create a program of discounted arts and social events that expands audience reach. Working with local businesses (through affiliated deals and discounts) can improve customer and civic engagement (and provide sponsorship revenue). And from all of this the customer gets a better deal.
However, it's worth noting that there’s a flipside to complementarity. Your customer’s resources (financial, temporal, psychological) are very much finite. If they pay for membership to a museum or for a fancy dinner, that’s less money they have to spend on tickets to your show. Even worse, if you’re a different museum competing with that museum where they have membership (even if your offering is completely different), your customer may be less inclined to get membership with you because they already have a membership with that other museum. They’ve mentally ticked off the box for having *a* membership.
It’s irrational, but then again, so are people.
The takeaway: Collaboration is good to a point, but only while your strategic advantage is greater for having it.
So what can be done to deal with your competition? Well, the gritty details come down to what your organization does, how it is positioned, and what you want to achieve. But at the high level, here’s a three point plan. To be honest, each of these points deserves its own article, and hopefully each of them will get one:
The broader strategic point of all this talk about competition is this:
Having a good mission is only a fraction of your operational strategy – execution of that mission means understanding anything that can impede realizing your goals, then outperforming or eliminating it.
Observations on music, coffee, and the occasional controversial thought.
Copyright © Gerard Atkinson 2013. Unauthorized use and/or duplication of this material without express and written permission from the owner is strictly prohibited.