Marketing managers for major orchestras had always assumed that convincing people to give the
symphony a try was the key to gaining subscribers. “Get people through the doors!” was their
mantra, assuming that the sheer beauty of the music would lure them back.
But when they actually studied the numbers, they discovered that getting new people wasn’t
the problem. They weren’t passing the audition. Customer churn was killing these orchestras.
It turns out the secret to unlocking demand for classical music–as for most products–is
discarding the Myth of the Average Customer. Designing a product offer to appeal to one
archetypal customer is always wasteful–one size fits few, not all. Instead, demand creators
have to constantly focus on demand variation, asking how customers differ from one another
and how those differences impact demand. This process of “de-averaging” can be complex, but
it offers huge opportunities.
In 2007, several orchestra managers joined forces to analyze their collective marketing
challenge. A pro bono third-party study by Oliver Wyman (Audience Growth Initiative) found
that on average, symphonies lost 55% of their customers each year; churn among first-time
concert-goers was 91%! The study also confirmed that the solution to churn was to move beyond
“averages” and to begin looking at the wide variations between starkly different customer
The symphony audience was divided into a core audience, trialists (first-time concert-goers),
non-committed (a few concerts a year), special occasion attendees, snackers (people who
purchase small subscriptions for years), and high potentials (frequent attendees who haven’t
bought a subscription). In Boston, for example, members of the Boston Symphony Orchestra
(BSO) core audience represented just 26% of the customer base but bought 56% of the tickets.
Trialists composed 37% of the base, but bought only 11% of the tickets. In monetary terms,
core audience members had a 5-year value close to $5,000; trialists, just $199. With that
data, the orchestras’ new mission became more targeted. The goal wasn’t broadly to reduce
churn but to convert trialists into steady customers.
The symphonies compiled a list of 78 attributes of the classical music experience, from the
architecture of the hall to the service at the bar to the availability of information on the
Internet. Using online surveys and other techniques, the list was whittled down to 16 factors
with the greatest impact on attendance.
Horns and strings! It turns out the quality of the orchestra, magnificence of the hall, and
virtuosity of the conductor were not particularly important attributes. What was? Drum roll!
The most powerful “driver of revisitation” was parking! As with other orchestras, veteran
members of the core BSO audience had figured out where to park, but trialists identified it
as a huge hassle–so they didn’t come back. Another driver was the ability to exchange
tickets; trialists found the “no refunds, no exchanges” policy a deal breaker.
Consultants developed a series of “killer offers” for different orchestras. The BSO’s killer
offer for trialists garnered a response rate 34% higher than its traditional offer–equivalent
to 5,100 more tickets sold over a year. The Cincinnati Symphony offered its Summer Pops
trialists two choices, and the “killer offer” won, 20 to 1. And so on down the line. The
Orlando Philharmonic Orchestra, which offered a 50% discount for newbies, saw subscriptions
rise 30% in 2008-09, and 50% over that in 2009-10.
The so-called “Churn Report” showed that classical music itself was not the problem with
declining audiences. The problem was the overall customer experience, and customer
expectations were quite different for each group. De-averaging customers requires research
and analysis. But the benefits are as clear as a cymbal crash.
Adrian Slywotzky is a partner at the global management consulting firm Oliver Wyman and a
best-selling author. This article is based on material from his new book, Demand: Creating
What People Love Before They Know They Want It (Crown Business), to be released on October 4,
2011. Follow the Demand blog at www.demandthebook.com.
[Image: Flickr user trp0]