Strategic Planning to Secure the Future: Baker Richards

22 Apr 2020 | Planning, Covid-19

In the recent Arts and Everything in Between podcast with Baker Richards, we discussed how early indications suggest that the arts sector could be looking at the potential financial loss of at least two quarters. While the immediate shocks of closure are largely over, now is the time to get planning so you can hit the ground running for your reopen.

At the moment, the only certainty is uncertainty. But there is some light at the end of the tunnel. In both Ireland and the UK, many experts believe the peak of Covid-19 has hit - or is very near to hitting. This means that the end (or at least some form of an end) could be nigh (in a good way).

While an end could be in sight, it is still likely weeks away. And more than likely, theatres, venues and festivals are months away from reopening.
 
Compounding this uncertainty is the unavailability of key staff. Due to closures many organisations have furloughed staff or are operating with a skeleton staff. This is particularly challenging when arts and cultural organisations need to focus on planning for reopening.
 
But reopening is coming and now is the perfect time to get planning!
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We recently spoke to Baker Richards leading international provider of consulting services and software for the arts & cultural sector. During the podcast, David Reece & Robin Cantrill-Fenwick shared their bounce-back strategies for the arts and addressed best practices to plan for future reopening after closures.

While there are still many challenges, we all need to face, it is critical for arts and cultural organisations to look forward and plan strategically for the future, regardless of how long closures last.

What can you do right now?

1. Create Your Own Playbook
 
We don't know what the industry will look like in six months time. But Playbooks can help you to build out various future scenarios so you are prepared for the future. While it is impossible to plan for every eventuality, even the simple act of sitting down and thinking about some possible futures is helpful. Playbooks outline your strategy, tactics and actions for any given scenario. These maps will give you greater flexibility and help your teams adapt to any situation. Playbooks are great for every day - as well as in a crisis!

Baker Richards outlined three core actions arts and cultural organisations can take right now.

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2. Time to Take Stock
 
Reflect on what activities are most valuable to your organisation. Think about what actions lead to the biggest results. What are your most profitable income streams? What makes the biggest difference to your bottom line? For example, if you are in the UK, you might find that donations eligible for Gift Aid are more financially impactful than general ticket sales. Analysing your data in this way will show you exactly where to focus your efforts and planning.
3. Maximise Income
 
Baker Richards suggests using a tool called ‘The Income Strategy’ when considering how to maximise your income. The tool analyses ways to maximise earned income in your organisation based on the below;
  • Admissions: ticket sales.
  • Affiliation: memberships, loyalty schemes, volunteers, donations, etc.
  • Ancillary: Food, beverage, merchandise, etc.
Take a deep look at these areas in your organisation. How do they work together? How can you mesh them so encourage upselling and cross-selling and improve profitability?
 
“Organisations should seek to maximise the income from their customer base by optimising sales across these three areas; cross-selling and up-selling between each. The pricing of all three areas is inherently related. For example, changing the price of admissions may directly affect the perceived value of an affiliation programme, where benefits include free or discounted admission. In all cases, the prices charged for one element affect a customer’s perceptions of the prices being charged in another area”. *First published by Arts Professional, 26 October 2017, artsprofessional.co.uk

Maximising Revenues and Retaining Income

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Financial security is certainly at the forefront of everyone's minds - it has to be. Baker Richards suggests three key areas to consider when looking at how to maximise your revenues: retaining income, using segmentation to find your most valuable customers and dealing with discounts.

Retaining Income Where Possible

Closures have of course, meant cancelled performances. Mass refunds have the potential to seriously damage the financial health of arts and cultural organisations. But don't assume that "cancelled" equals "refund". The Ticket Exchange Tool, we launched in the early days of the closures, is designed to help organisations retain revenues. The tool gently encourages customers to convert ticket purchases into a donation or credit voucher. To date, Ticketsolve customers have seen 52% of ticket revenue either donated or transferred to credit voucher.

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“The Ticket Exchange Tool has transformed what otherwise would have been a daunting and tedious process for our team here at Ipswich Regent Theatre. The tool is optimised within Ticketsolve meaning that there is no manual effort required. Their team has worked with us from the beginning of this pandemic, developing and growing the tool to respond to our changing needs and most importantly, to fulfil the expectations of our audience members and minimise the impact of cancellations and postponements for our customers and staff”. Peter Ling, Shows & Finance Manager, Ipswich Regent Theatre and Corn Exchange

Segmentation

It’s fair to say that audience members interact with your organisation in different ways. Segmentation is important if you want to maximise income.

Start with Your Membership Scheme
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A good first place to start is by separating your audiences into two segments: transactional from philanthropic. Patrons who donate know your value and appreciate what you do since they make ongoing support a priority.
 
While both segments are important, the philanthropic segment is the most valuable for reopening campaigns as they have already shown they are committed to you.
 
If you don't already, enrol donors into membership schemes or an existing friends scheme to reward them for their support. If you reward giving behaviour, you encourage more of the same. Membership benefits such as a priority booking and access to exclusive events are of high value to members, encourage frequent booking while being a low cost to your organisation.
Best Practices for Segmentation
In order to grow your membership, you need to understand your audiences better. Identifying your key segments means you can target different segments with specific meaningful messages. Identifying your most valuable customers is crucial (and will be more fruitful) if you working with limited resources.
  1. Frequency - How often a customer visits
  2. Recency - How recently have they last visited
  3. Purchase Value -How much do they spend per visit
With this analysis, you can see who is actively engaging with your venue and segment customers with the greatest potential for long-term loyalty.
 
Another area to consider are possible untouched segments. Baker Richards gave us two examples of audiences to keep an eye out for, these are;
 
Infrequent loyalist: comes once a year but every year
 
New converts: only came twice but came twice in recent months
 
Identifying new clusters of audience members helps you maximise ROI on your customer communications and deliver the right message to the right people at the right time.
 
You can easily run these simple segmentation reports in Ticketsolve in Your Reports.

Are Discounts Your Best Tactic to Draw Audiences Back?

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It's likely you (like many other organisations) are considering discounts or offers as a way to draw audiences back to your venue. Baker Richards cautions, that while this may work in the short-term in the long-term it could undermine the value of your offerings.
 
It is difficult to escape discounts. They're an easy way to get audiences back, especially now, with so many people feeling the financial impacts of the health crisis. There is nothing wrong with targetted, tactical discounts and offers. But be mindful of the long-term impacts, as used too widely, they could damage your perceived value.
 
A great way to use discounts strategically is to reward advanced booking or multiple show purchases. This encourages upselling without diminishing the value perception attached to your product.

Final Thoughts

A final tip from the team at Baker Richards: this is a great chance for introspective analysis. Use this time and seize this reopening opportunity.
 
Break your current planning into three stages;
 
Step 1: Reboot
 
Get things in order, take stock and create your own playbook. This is where you create your own adaptive plan.
 
Step 2: Re-Engage
 
Understanding your value and messages to your newly highlighted segments.
 
Step 3: Reopen
 
Welcoming back your audience members. Use this time to monitor and constantly plan for the future.
 
Indeed there is a lot to consider, so start small and see which actions make the biggest difference to your individual organisation. If you want some advice or want to chat about anything don’t hesitate to get in touch with us here at Ticketsolve.
 
We would like to offer a special thanks to Baker Richards and David & Robin for coming on for this special episode of our podcast.
 
If you would like to find out more about their work, check out
 
Baker Richards website for further resources on https://www.baker-richards.com

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