Decentralize the Hierarchy

One of the things that I think is a unique asset of the firm (not to toot our own horn, but well...ok) is we are small. I've been here for 2 years and I love that I am directly involved, learning from senior partners, no one has a secretary, when you call you talk to a real person...Some people don't know that we don't have secretaries and how someone communicates with someone he mistakenly thinks is a hireling can reveal a lot.

Anyhow, the NY Times agrees. Small teams can mean more creativity, better solutions, happier employees, happier customers, time and money saved.

Why best practices for business are useless for the arts

In the area of non-profit cultural enterprise, we are accustomed to having government and commercial institutions talking down to us. Through our boards of directors and funding relationships we are fed a continuous stream of "best practices," usually about five years after they've lost favour in the sector that spawned them. From industries that failed to anticipate rising fuel prices and from governments that can't run a gun registry, we get scandalously bad practices from scoundrels and ne'er-do-wells who oblige us to adopt them uncritically just to get along.

Examples? The Harvard planning model and the SWOT analysis are techniques that only work for organizations that have sufficient resources to do really solid research, analysis, and who can employ the relevant conclusions with enough process integrity to produce a result that offers better than average prospects of success. Those preconditions disqualify about 90% of the non-profits arts organizations that have been employing those methods to satisfy the business people on their boards, as well as the public and private sector funders on whom they depend.

Another great example is a study done by a well-meaning management consulting firm that tried to draw lessons from the airline industry for the performing arts. Their results were published and widely quoted for a brief time in the late '80's or early '90's. They noted, as Julia did in reference to Godin's article, that both industries offer time-bound products, so they both faced the same supply-demand, pricing, and inventory management dilemmas.

There, in my mind, the similarity ended and I recall little of interest in the study's findings. But how could the world's most credentialed multinational consulting firm fail to observe the fundamental differences between these enterprises? Even a lay analyst would conclude that these differences spoil all but the narrowest and least valuable analogies between them.

One industry is well capitalized, with a highly trained, unionized workforce and a high degree of price elasticity in most market segments. The other was never capitalized, always operates out of cash flow, has a transient workforce in all but the largest companies, and can charge only enough for its tickets to recapture a fraction of its operating and production costs. Can you guess which the airline industry is and which is the theatre industry in Canada?

One is faced with intense competition with others in its industry group, however customers have no real alternative to purchasing from one or another of that group. The other industry competes not only with others in the same category; it competes with all other leisure activities for the spare time and disposable income of its customers. Again, can you tell which one is which?

For anyone who wishes to maintain that there is a profound resemblance between the airline industry and the commercial theatre industry (as opposed to nonprofits), I have two responses, either one of which should decide the matter. First, most of the performing arts activities in Canada is nonprofit, not commercial, and even the commercial activity depends on the broad base of subsidized nonprofit activity beneath it for its audience and talent development. Second, airlines and theatres are not even time-bound in the same way, which was the primary point of comparison, after all. Anyone who has arrived a few minutes after the curtain has gone up at the theatre, or a few minutes after boarding has ended at the airport, can tell you that it is infinitely easier to be shown to your seat at the theatre than it is to sprint with your baggage down the runway, grasping for the landing gear. They are fundamentally different enterprises that operate in completely different circumstances, all of which affect the ways in which they market their products and manage their inventories.

People in business and government are always trying to share their wisdom with the arts, even though their own performance often puts that wisdom in doubt, and even though the techniques they offer may be unsuited to the practical realities of the arts enterprise.

Photo credit: Corex

Looking for Love in All the Wrong Places

The following text is adapted from a lecture Managing Director and Senior Consultant Doug Simpson gave at ANDPVA (Association for Native Development in the Performing and Visual Arts) on how to (and not to) develop audiences and members in non-profit organizations. I am going to post it two parts.



LOOKING FOR LOVE IN ALL THE WRONG PLACES – PART 1

I'm old enough to remember when small arts organizations burned up volunteer resources running bingo instead of building membership support. When bingo ceased to be a big money-maker, a lot of organizations started running Nevada tickets. Raffles and lotteries seemed like failsafe money-makers for a while, until there were so many of them they fell out of favour.

I also remember when I was running a theatre company in Peterborough so long ago that our big annual raffle featured two new inventions: the VCR and the wind surfer. The Board failed to sell enough tickets, and the Board Chair walked off with both first and second prize. It took me a week of guilt tripping to get him to give them back. But it wasn't just a small market phenomenon. At about the same time, the Canadian Opera Company, with one of the wealthiest memberships in the country, was losing big money raffling off Mercedes sedans and fabulous trips. The whole herd of non-profit fund raisers had to move on and find a new technique for getting money out the community.

But I want to step back from techniques for raising money, and focus on the good old honest practice of audience and membership development. What could be more simple and straightforward than accepting admission money from people who want to experience what you offer, or then to invite them into a deeper relationship with the organization through membership, and in return, giving them a more profound understanding and appreciation of the thing they love?

There's no trickery or salesmanship at root here. It's not about techniques that you can swap with other organizations. It's about establishing and cultivating a unique relationship between your organization and those in the community who appreciate what it does. Underneath all the marketing jargon and sly, seductive direct mail techniques is the genuinely powerful connection between what you do for the community and those in the community who really care about it.

Relationships. That's what we're really talking about. Lasting supportive relationships. Not one night stands, but relationships that have a better than average chance of enduring and becoming stronger.

When I talk in this simplistic way, people get uncomfortable because it sounds too much like a TV ad for an online dating service, not the tricky and important business of membership and audience development. But let me ask you, honestly, what lasting relationship starts with borrowed techniques? How many movies or plays have you seen where some lovesick swain asks his womanizer friend to help seduce the woman of his dreams? Will Smith's, Hitch, is the latest example. Cyrano de Bergerac might be the most famous one. In fiction, as in real life, it works so badly, it's funny.

My contention is that we should let the unique essence of our relationship to members and audiences determine what fund raising and marketing techniques we use, rather than the reverse.

Too often, out of habit or desperation, we employ techniques that fail to present us in our best light, or that attract people who aren't right for us. When that happens, when we don't get the results we want, it's tempting to try harder.

For example, if we budgeted for a 3% response rate to a mass mailing and we only get 1.5%, it's easier to rationalize sending twice as many letters than it is to back up a step and consider whether or not we're sending the right message to the right people, or whether or not we're using the wrong medium altogether.

Seriously think about how many non-profit organizations try to expand their support base by buying mailing lists from other organizations! Yes, you may find a few more prospects, and convert a few of those into new supporters, but the cost is high relative to an approach that is focused on the unique relationship you're seeking and on the need to motivate your future member to become involved with you. It’s worth doing for the 800 pound gorillas in our field, but not for the vast majority of small cultural organizations.

Here's the most fundamental thing I can tell you, and I think it puts everything else into perspective. The currency of membership and audience development, as for all kinds of marketing, is not dollars, not number of impressions, nor privileges, benefits, or services; it is emotion.

Anytime you get someone to get out of their easy chair to start a transaction with you, you first have to convince them that they feel like doing something about what you've offered them. You then also have to convince them to choose your offering over everything else available to them at that moment. And finally, given that it is a non-profit offering in which they are donating to or buying something of uncertain dollar value, you have to leave them with a good feeling: a feeling of pride, of pleasure, and a desire to do it again - donate monthly by credit card instead of once by cheque, for example, or to buy a series subscription instead of a single ticket. By analogy to online dating, this is the true "love connection."

Underneath it all, the currency of the transaction is emotion. Everything else is a secondary consideration that comes into play only AFTER the right feelings are stimulated.

How do we know who to approach and how should we approach them to arouse the right feelings? Let me give you some examples that you might be able to relate to, and think about how your organization behaves when it's looking for love, when it's trying to build lasting support relationships.

Part II - Tomorrow - Concrete examples of successful membership developement and some common pitfalls.