| |
 |
 |
Mon, June 01, 2009
At a recent travel conference, I noticed something that was very disappointing – Broadway is missing out on significant opportunities happening in the travel industry. Here were all of these travel brands saying “we need to find new ways to make revenue and to deliver ‘value’ to our customers during a difficult economy.” I’m saying to myself, “sell your customers Broadway tickets!”. And, that’s when it hit me - what value can we truly give these travel brands customers when you consider how we currently market our shows? Take it a step further – what value can we truly give any reseller?
With those questions in mind, consider that there are millions of emails sent out each week with special discount offers to Broadway shows. The sellers of these emails have no incentive to stop... the buyers of these emails will continue to get results that illustrate a demonstrable return-on-investment (it's hard to argue a media spend of $7,500 that could convert $250,000 in revenue) and consumers get to pay 40% off the ticket price. As an industry, I think it’s safe to say that Broadway is now completely and undeniably addicted to the primary theatre discount emails – it’s turned into a drug for our industry… its crack for Broadway marketers.
What’s most alarming about it to me is that we are on a path to cut out the middleman in the ticket buying process all together (group sales agents, FIT sellers, etc.) by selling directly to the consumer. I’m not saying “selling directly to the consumer” is a bad thing – I’m just saying that’s what those millions of emails are both directly and indirectly doing (or going to do) and there are serious consequences to those actions that need to be explored.
Nobody is saying “screw Expedia” – but we have completely pushed away the travel industry from really wanting to find ways to enhance our relationship together. In a time where travel brands are pushing 'value', why on earth would they want to offer their customers tickets to a Broadway show at full-price to receive a 10% commission when they know their customer can see a price for that same tickets for 40% cheaper on other sites? We get a ton of value from being on Expedia, Travelocity, Orbitz - MUCH more than the ticket sales report show - remember, people use these sites more as guides rather than necessarily the purchasing path. We get a lot of free exposure which I can say we will be in danger of losing if we don't keep our relationship strong with travel sites.
Aside from the travel industry, look at the group sales market. Nobody is saying “to hell with group sales” – but through our discounting practices we are stripping them of their value proposition to their consumer with every email we send out screaming 40% off. Their customers bought a ticket for $90 - the next day they received an email offer to see that same show for $65 (I would not want to be the one fielding that phone call). Where we used to have a limit of 8 tickets per order – most discount codes don’t really have limits below 20 anymore. I know there is other value than cost when it comes to group sales booking, but we sure as heck are making their life a lot harder by our current pricing strategy.
I don’t see this as an intentional move on behalf of the industry against the group sales folks or FIT outfits – I just see it as a byproduct of the perceived gold mine that email communications has brought the Broadway industry.
The loss of the middleman in the buying process would mean a big savings in paying out commissions on sales. At the same time, it would mean the outlay of additional expenditures to get to the people that those middlemen once spoke to.
This leads to my biggest concern for the future of Broadway marketing (and it’s a wordy concern) - the industry is not equipped to effectively market directly to consumers with the precision necessary to make up for the lost revenue by cutting out the middleman. Furthermore, the industry is not currently equipped to maximize the opportunities with the customer relationship that will keep those consumers returning over time. Simply put, we don’t have the money, technology or manpower to go down the path we are currently heading if we expect long-term success.
As I type this email, there are hundreds of thousands of emails going out for discounts on Broadway tickets with underlying strategies that had the following constraints while being developed:
Lack of Comprehensive Targeting Capabilities: None of the publishers email systems allow us to really talk to consumers in the right way. What percentage of email lists will allow you to target by age, demographic, buying history, etc? It’s not a pretty percentage. Also, all of the primary discount email lists that are used I’m convinced have a ton of overlap in terms of members between each one. If they bought a ticket at one point in their recent lifetime, they are ultimately on a Telecharge or Ticketmaster email list. In short, we are using a shotgun approach and without question, are leaving boat loads of money on the table. Just ask the secondary market that is standing their scooping it up.
A Flawed Tracking System in Which We Gauge Performance: Broadway has a system for tracking sales that has holes the size of China in it. Ever wonder why your discount code sales from your email blasts are no longer bell curves rather straight lines over time? Your discount codes live all over the place. Even if the main ticketing systems found ways to create 'one-off' discount codes (meaning codes that immediately expire after usage) that technology would also have to be deployed on each of the main discount email services (i.e., Playbill, etc.). Don't hold your breath for any of this to happen in the short-term.
Limited Access to Customer Data: Broadway shows don’t own their cash register – we rely on the ticketing systems which, from a marketer's perspective, can be cumbersome. We have limited access to our customers data in real-time. We can’t effectively put the right message in front of the right prospect with any certainty. In fairness, if you ask, the ticketing systems they will give you whatever data you want to analyze – but, this leads to my final point.
Lack of Marketing Resources: Finally, and most importantly, Broadway has marketing staffs that are completely under-funded and/or non-existent. Who has the time to analyze consumer data? Who has the time to manage a customer relationship management system?
I can’t see how Broadway can expect to succeed with these barriers in place.
I am not claiming to have the answer on how to address this. We have a lot of shows right now that are really hurting and I too would feel really good about moving $100k in ticket sales in a discount email blast. It puts butts in seats and keeps people employed – so, preaching on my soapbox during a recession I admit is a bit inappropriate. But, sitting at that travel conference was both too concerning and disappointing not to put some thoughts to paper.
I’m not saying sending out discount emails is a bad thing (hey, we are selling millions of dollars each year using them) – I’m just making the argument that, as an industry, we need multiple improvements in technology and an increase in resources to commit to the time to speak directly to consumers with the precision that is ultimately needed.
I am trying to organize an event with some folks from the travel industry in July to talk about this topic and I hope many of you can join the discussion. Register for our ‘EVENTS @ Situation’ speaker series here to be notified if you want to be part of the discussion. Obviously, would love to hear any feedback you have on the topic by email.
In the meantime, here is an article from May 2008 from Allegiant airlines who was able to remain profitable, sell direct to consumers and integrate in show offerings to their customers.
Read on.
Thu, March 23, 2006
This article was passed on to us from a Situation Room subscriber {thank you Matt}.
The issue is revenue management and it has long been argued that the theatre world needs to embrace the airline ticketing model. Well, Christophe Imbert from software company Sabre Airline Solutions and Tim Baker of arts consultancy practice Baker-Richards addressed this issue at a recent conference.
"Tim Baker argued that airline tickets had only a simple utility value – a means to an end – and by advertising their lack of frills, lowest prices, and basic point-to-point service, the low cost airlines had in effect reduced the value associated with the experience. Whereas performing arts tickets were all about the value of the whole event as an experience – the end in itself; even with low ticket prices, people had to value the event enough to buy the tickets. The airline model is primarily based on differentiating price by time of booking, and a completely different approach is needed for the cultural sector.
What cultural organizations need to do is identify which of the other price differentiators (performance type / timing, concession group, seat location, service level, as well as transaction time) were most motivating for their customers and design an approach to revenue management that worked in their circumstance. For example, from Broadway to the Royal Shakespeare Theatre, customers are willing to pay for premium seats, generating very significant additional income. In a sense, theatres have been using ‘revenue management' techniques for decades – standby, early bird, discount quotas, peak performance pricing, etc. and the opportunity now is to be more scientific about how they are applied."
Amen.
Click here to read more.
Fri, September 30, 2005
Fact is, in the online world, teens expect customization. We have 'My Space'... 'My Yahoo'... what about MyBroadway.com (already taken by a cybersquatter)?
A new study not only boasts information we already know about rising Internet usage among the youth market, but highlights the need for advertisers to reach out to what Yahoo calls the "My Media" generation.
Click here to read the complete story.
Tue, August 30, 2005
The question still remains... how do we generate sales from prospects before they arrive in New York City?
We know that people use the Internet to research their travel plans. We also know that they book online.
While there is no conclusive study on theater buying habits online that we are aware of, we decided to look into purchasing patterns surrounding the travel industry.
"While some consumers indicated that they purchase because of ease of use or frequent flyer programs, it's clear that low prices will be a primary driver in online travel decisions," Eagle said.
The question of ease-of-use versus cost needs to be evaluated more closely in the theater world.
Click here to read the complete article on travel marketing.
1
|
 |
|
 |
 |
|
|
|
|
Signup 
About 
Archives
