Audience Development: The Long Haul Model

Three years ago, the California Symphony changed its approach to audience development, employing a long-term strategy that resulted in increased concert attendance, audiences getting younger, and more donors.

The problems in the orchestra world of declining audiences, aging audiences, and audience turnover have been well articulated, belabored even. In response to these problems, we as a field often talk a lot about incremental gains and successes such as an orchestra that sold 5% more tickets than last year or trimmed expenses enough to balance the budget. Make no mistake, these are big successes under the current model, but when we know as an industry that our fixed costs will continue to rise and outpace the operational tweaks and incremental revenue gains we can achieve, the model needs to be reexamined. This is a post about solutions.

To give away the end of this story, over the last three years, after a calculated change in approach to audience development strategy, the California Symphony has seen profoundly different results from the national trends for orchestras:

Through reconstructing a new audience development strategy, in addition to the results above, the California Symphony grew its operating budget by 40% over this time period and ended this last fiscal year with a 10% surplus.

This post discusses first what the current/typical audience development model looks like, followed by reasons why organizations do it this way (spoiler alert: there is a long list of explanations in support of the traditional approach, which are barriers to change for many organizations), and ending with counter points on how and why changing the model is worth it, namely because there is big money on the table, which in turn allows us to better serve our mission.

Arts organizations have a lot to offer to our patrons, which is why when a first time attendee comes to a concert, what ensues is essentially a marketing and development free-for-all: that person goes right into all our campaign mailings for subscriptions (“New blood! They came once so they must be willing to at least consider season tickets!”), right to the phone room for telefunding (“They clearly like us enough to attend, so they might be willing to make to a modest donation!”), into all the single ticket marketing efforts like email and online ads (“They completed a purchase on our website, so we are smart and savvy and have that tracking cookie showing them ads everywhere now!”), and into pretty much every direct mail solicitation for single tickets or for donation appeals (“Recent attendance is a great indicator of future engagement!”). That’s a lot of offers and messages…and by a lot I mean a deluge. Then, this same free-for-all takes place again if that person becomes a repeat attendee (“Now they really must be interested in us!”). Then all again if someone takes a chance on a season ticket package, large or small (“They drank the Kool-Aid! They obviously must want to consider donating now!!”). At some point around the time someone becomes a renewing donor or major donor, we sort of get our act together and often have a pretty clear path of next steps for cultivation and stewardship.

The audience development free-for-all model that is the current approach for most arts organizations.

To a degree, the current model works. Organizations do make money, and a lot of it, this way. But when 90% of first time buyers don’t come back — a well-documented national stat from Oliver Wyman’s “Churn Study,” made famous by former head of marketing at the Kennedy Center and later Vice President of the League of American Orchestras Jack McAuliffe — this is a problem. And when first year subscribers — a critical group because we know that being a subscriber is the number one indicator of future donation proclivity — are the hardest segment to renew, averaging a 50% or less renewal rate for many organizations, that’s a problem. It’s a giant pipeline problem we have created for ourselves.

In short, the California Symphony decided we would do everything we can to create a flowing pipeline. For us, this meant calculated changes to the approach described above, shifting to a strategy focused on patron retention. Now, no matter who you are, whether a first time attendee, or repeat buyer, or new subscriber, or long time donor, or anywhere in between, we have a specific plan for you and a specific next step in mind, and everything we do points you toward that one next step and nothing else. Equally important to what we do now is what we don’t do now, that is to say we do not solicit a donation before a patron is a second year subscriber. (This is usually when jaws drop.) The new approach is a long-term, disciplined strategy, and one that has proven lucrative for us: we’ve grown our audience by a sizable 70% over the last three years — having to add concerts to keep up with the demand — and have nearly quadrupled the number of donor households. We completely reconstructed how we do audience development, and we’re in it for the long haul.

The traditional audience development model versus the model the California Symphony reconstructed three years ago, offering one next step (and only one) to every audience segment in order to maximize revenue over time. Most arts organizations state they would like to see this type of logical customer progression, but almost none deliberately limit the next step offered to each customer segment.

In the latest issue of Symphony magazine (summer 2017), The League of American Orchestras said it best: “Surely, if the military is learning how to become flexible and adapt, orchestras can as well. To do so, they need constantly updated sets of tools and assumptions.” That’s exactly what this is all about.

Earlier this summer, I spoke on this topic — the idea of a focused and strategic audience journey — on a panel at a conference for NPR and public media marketing and development professionals, and during Q&A someone raised their hand and said to me, “Your industry is SO LUCKY to have this research [like the “Churn Study” mentioned above] …so why isn’t everyone doing what you’re doing?” The answer is because change can feel risky, and it turns out, there are several genuine reasons why organizations feel the risk and are reluctant to divert from the traditional model:

1. Revenue attached to old ways. Again, organizations do make money the current way. Some people do subscribe after attending one or two performances, and some people do make a donation when they’re called. And when we are dealing with a pipeline problem, it can be painful to purposefully limit that pipeline at first, such as when you’re pulling a list for a direct mail appeal — let’s say for a fiscal year end campaign when all the low hanging fruit for donations has already made their annual gift — and you know how many more people you could add to that mailing list if you pull recent single ticket buyers. It’s tempting to add those people to the prospect list because some will respond, and those moments make it hard to think about how we’re contributing to that 90% no-return rate because we’re making the wrong ask too soon.

2. Wrong metrics. Another reason change feels risky is because we often measure the wrong things. A bigger database is not the right metric, as an example. Bigger databases do not implicitly mean we are serving more people; a bigger database often means we serve a lot of people once, and that’s bad when our jobs are to cultivate loyal lovers of our art form. In the example above, a larger mailing list is the wrong measure. Looking at the response rate would be a healthier gauge of success (more on that below). Bigger is not always better, and bigger is almost always more expensive (more on that below as well).

3. Short term emphasis. True especially post recession, there is incredible pressure to run our organizations with short-term outcomes. When I was first brought in to the California Symphony to lead a financial turnaround in 2014, one major institutional funder said to me that if we did not immediately have balanced budgets for the next two years, consecutively, then they would pull their funding. And they said this knowing the organization was in crisis and knowing I was implementing a three-year turnaround plan (largely built on the audience journey strategy outlined herein); nonetheless, the directive was firmly to balance the budget in one year. (Side note: we did it, but talk about pressure to NOT take a long-term approach to sustainability!) I pick on that one funder, but the truth is nonprofit leaders see that kind of pressure a lot. Not just from funders, but from watchdog organizations like CharityWatch and GiveWell, etc. And from our boards as well. When the budget does not balance, how often does the board want plans and ideas that promise a quick fix? By the way, if there truly was a quick fix (besides cuts, which are the epitome of a short-sighted solution), wouldn’t we all have implemented that fix a long time ago? The short term pressure is real.

4. No culture for failure. This stems straight from the point above. We all have lean budgets with little to no room for any experimentation to try new things. This isn’t because no one wants to experiment, or find a new model that we all know we need, it’s because we usually must have every penny go toward everything else we’ve committed to do as an organization. We all have top notch artists, quality programming, and education initiatives that make a difference. Failure to fund on any one of these fronts because an experiment did not result in a profitable outcome in its first iteration is not an option. As arts organizations, we need money in an organizational culture with no real appetite for failure — or innovation, or even delayed gratification — because a lot of us simply cannot afford to have a miss.

5. Don’t know how to do it differently. Having siloed departments — particularly siloed marketing and development departments — and a focus on acquisition (both patron and donor acquisition) make it so that our staffs don’t always intuitively know how to do work a different way. We are taught that acquisition is key, and in a broken system, it is, because we have to fill the declining audience and short-term revenue voids somehow. We are taught, in different words, to treat new patrons like a land grab. “Who ‘owns’ those names?” we ask when trying to figure out a way for marketing and development to play in the sandbox together, when the reality is that’s the least customer-centric question we could be asking. Patty McCord, who served for many years as Chief Talent Officer at Netflix, recently said (on the FRICTION podcast with Stanford Professor Bob Sutton) about maintaining a customer-focused culture, “Siloes are just gonna slow you down…Companies that are really, truly successful are collaborative and solving for the customer, and you can’t solve for the customer in siloes. You can’t do it.” As an industry whole, we sort of know only one way to do audience development and don’t really know how to do it any differently.

6. Don’t have the discipline. Maybe this is in the category of “Don’t know how to do it differently,” or maybe it points back to an emphasis on short term revenue, or even not having a culture for failure. Back to the example of wanting to run that fiscal year end appeal mailing list, when we first instituted this new strategy, we could have mailed to twice as many people if we had included recent single ticket buyers, and we all know that some of those people would have made a donation. In a time when we were digging ourselves out of the ditch financially, it was incredibly difficult to have the discipline to say, “No, now is not the right time to be making a donation ask of this group. Instead, we will wait until people from this group are renewing subscribers when we know they are times over more likely to respond, give more, and ultimately renew that gift. We’re vying for a higher lifetime value of these patrons.” Also, having discipline takes time, and that’s a currency we don’t really have, which brings us to last reason we keep doing things the current way.

7. Don’t have time. We often don’t have time in two different ways: 1) no time to wait for results of a longer term strategy, and 2) no time in the work day to even think about changing the status quo. To the former, it takes a while for the full process of having a first time attendee come back as a repeat buyer, then get converted to a season ticket holder, and then to renew that subscription, and then finally to have the chance to solicit them for a donation. For the marketing folks, those first few steps from new attendee to subscriber can happen in a year or so if all goes according to plan (which when you are disciplined, it does nicely play out that way more often, but I’m getting ahead of myself). For development folks, however, that’s at least two years of patiently waiting to get their hands on those prospects, which is very different than the current approach. To the later point, changing the approach means time in the day is spent differently — not adding more to the plate (which feels impossible at times), but mixing up that plate a bit.

So when that person at the public media conference asked why everyone isn’t doing things differently like the California Symphony, I actually laughed a little. “You think public radio is slow to change?” I said, “NPR is not even 50 years old. Try working for an orchestra — we’re working against centuries here!”

There may be revenue attached to old ways, but there is way, way, wayyyy more revenue attached to a disciplined, strategic approach. Through shifting our focus from patron acquisition to patron retention, the California Symphony has grown performance revenue by 145% over the last three years. That’s while increasing both single ticket and subscription sales. By comparison, the national average is 4% growth in performance revenue with subscription revenue on the decline (source: League of American Orchestras “Orchestra Facts” report, 2016). Yes, that’s insane. Lest anyone think this is through price increases alone, total subscriber households have grown by 37% over this same time period compared to the national average of 18%. Oh, and our prices have held flat the last two of those three years, except for dynamic pricing on single tickets, which when performances are consistently selling out as they are now, you better believe those last minute buyers are paying a pretty penny because supply is scarce and they didn’t plan ahead. We’re not talking about Hamilton tickets here; we’re talking about an orchestra defying the national trends for the industry by smartly responding to the ample research available to us.

Contributed revenue follows suit despite us actually soliciting fewer people than before. In fact, the California Symphony’s percentage of subscribers who also donate actually surpasses the national average: 28% nationally versus 52% here. If we take out first year subscribers from that count since we don’t solicit that group, this means 71% of all season ticket holders who are asked make a donation — two and a half times the national average. Total contributed revenue has grown 41% for us (national average is 20%) in conjunction with nearly quadrupling the number of donor households. One last data point: after adjusting for inflation, the national average for total income growth 2010–2014 is 5%; yet from 2014–2017 and also adjusted for inflation, the California Symphony has grown total income by nearly seven times that at 34%.

It’s worth mentioning that we’ve realized expense savings, too. Now that virtually every mailing list for marketing and fundraising appeals is smaller and more targeted, it simply costs less. We now put that money toward other things, like talent development and innovative programming.

If the wrong metrics are things like the size of our database and how many new names we’ve added to our list trades, then metrics that reflect how the audience is engaging with us and responding to our work are the right ones. In other words, metrics that measure retention and loyalty matter. If attending our organization is a bucket list item for people — meaning they come once and check us off the list — we’ve done something very wrong. And for 90% of new visitors nationwide, this is exactly what’s happening. Who cares if the database is gigantic if none of those people have any future value to us, especially when all the research shows that converting a customer to a second/repeat visit within 12 months of their first experience makes their lifetime value skyrocket. While lifetime value of a patron is incredibly difficult to measure with most CRMs, we can measure 3-year value or 5-year value of patrons who’ve gone through the old model vs the new model…which is very telling. Or in its very simplest form, we can measure annual patron revenue and associated expenses when the focus is acquisition versus patron revenue and associated expenses when the focus is retention.

People often ask how we have achieved the financial results that so dramatically outpace our peers, and the answer we give is that we’re playing a long term game. We may have said no to some short-term revenue in year one of this transition, but by year two we were seeing across-the-board growth, and now long-term results heading into year four of this strategy are undeniably counter to the trends at most orchestras. When our organizations have such an over-reliance and emphasis on short-term revenue, admittedly the most difficult, risky feeling part is at the beginning. The opposite is also true though: doing it this way — this long term, disciplined, strategic way — feels really right and really smart, and the revenue follows. Our art form matters too much to not be in it for the long haul.

This is easier said than done, but it can and must be done, and it does actually get easier. Going back to that foundation’s mandate to go from years of big shortfalls to a balanced budget in one season, we did it by recalibrating how we spend our money per this reconstructed plan, and that year the budget was indeed pretty lean. But by year two of the new model, the organization had built into the budget several new programmatic experiments. Yes, we actually had risk capital by year two. In year three (this past season), we ended the fiscal year with a 10% surplus and paid off/eliminated a portion of the organization’s accumulated deficit. In year four (the upcoming season), we have the most conservative budget we’ve passed yet and it includes another 10% surplus which will further eliminate deficit as well as pay for a feasibility study to grow our endowment (i.e. which would result in another expanded revenue stream for the orchestra) — what a virtuous cycle!

If siloes make it difficult to do this work, discipline makes it easier. “Process slows you down 100% of the time,” continues Patty McCord, former Chief Talent Officer at Netflix (in the same FRICTION podcast quoted above), “But discipline can often speed you up.” At the end of the day, people want to be on a winning team, and sending the right message to the right people at the right time results in higher response rates, lower campaign expenses (marketing and development, digital and direct mail), and a lot more money to fund our mission. We’re no longer scratching our heads trying to figure out how we’re going to make the revenue goals when subscriptions are down, or stressing over who else we can add to that fiscal year end solicitation because we just need more names (side note: we didn’t even run a FYE campaign this year because we knew we were ending in the black, and instead sent a thank you mailing to all our donors…what a change of pace that was). It took us three years to get to this point, but it has worked.

As a tactical side note, for staffs that are reading all of this and wanting to know more about how exactly to implement the “only one next step for each segment” approach, see as a starting point the posts on what we do to entice first time buyers to return and multi-buyers to become subscribers, and how we treat first time subscribers versus renewing subscribers versus new donors. We also created a new position to oversee marketing and low-level annual fund functions because we were so serious about removing the siloes.

If all this sounds like a lot of work, it is. It does take a lot of work to pull a report of first time attendees after every single concert, and then to send each of those people a postcard inviting them back again, and then to follow up with an email reiterating how much we’re glad to have them and reinforcing the discount offer to come back, and then sending yet another email reminder approaching the expiration date of the offer. It takes work to pull the list of multi-buyers (i.e. repeat attendees) after each concert and send all of those folks a wine voucher to add value to their next experience, or to run three different versions of the season brochure and five different versions of the renewal invoices so the right people get a tailored solicitation for a donation upgrade and the not-right-yet people don’t. But it’s different work than what we were doing the other way. We’re not running all those lists and scripts for telemarketing and telefunding, we’re not paying for all those hours of phone calls because we’re not calling most of the people we used to. We’re not running around doing tons of list trades and flash sales because our acquisition mailings need to be bigger and prices lower if we have any hope of selling those empty seats. We’re not pursuing empty corporate sponsor leads with the board, and instead building the list and file notes for board members to call and personally thank donors who gave less-than-major-gift donations because calls to this group have made a dramatic impact on renewals and particularly upgrades (which is part of the “one next step only” plan to get that segment closer to major gift territory). We cut out all that old, somewhat desperate feeling work and replaced it with work that matters over the long haul instead.

Once again, in its simplest form, this is all about pipeline and solving a pipeline problem. At that same NPR conference session on audience journey earlier this summer, the moderator said to her colleagues in the room that we need to not call the audience journey a funnel, because things drop out of a funnel. “We need to call it a pyramid,” she said, “because that’s building up. Users climb higher when our place in their lives is more indispensable.” She was so right.

An added benefit in tandem with the revenue gains the California Symphony has seen due to reconstructing the audience development model — and also a direct result of the UX work we’ve done on audience experience, which has served to strengthen that first timer foundational level of the pyramid — is that our audience is getting younger. The graphs below show that among subscribers and single ticket buyers, fewer people are in the 65+ category, about the same percentages are ages 45–64, and more people are in the under 45 crowd.

So there you have it: through a new model focusing on the customer over the long haul, an orchestra has realized an increase in subscribers, a growing single ticket buyer base, more donors, and an audience that’s getting younger. Just like the League said in that Symphony magazine article this summer, orchestras can and do adapt, and all we need is an “updated set of tools and assumptions.” I hope this post helps to do exactly that.

Aubrey Bergauer, Executive Director, California Symphony
Aubrey Bergauer defies trends, and then makes her own. In a time when most arts organizations are scaling back programs, tightening budgets, and seeing declines in tickets and subscriptions, Bergauer has dramatically increased earned and contributed revenue at organizations ranging from Seattle Opera to the Bumbershoot Music & Arts Festival to the California Symphony. Her focus on not just engaging — but retaining — new audiences grew Seattle Opera’s BRAVO! Club (young patrons group for audience members in their 20’s and 30’s) to the largest group of its kind nationwide, led the Bumbershoot Festival to achieve an unprecedented 43% increase in revenue, and propelled the California Symphony to quadruple the size of its donor base. From growing audiences, increasing concerts, and expanding programs to instilling and achieving common goals across what are usually siloed marketing, development, and artistic departments, Bergauer is someone you want to follow — on the nationally-recognized blog she created to discuss what actually works in a changing arts landscape, and in real life, too.

A graduate of Rice University with degrees in Music Performance and Business, for the last 15 years Bergauer has used music to make the world around her better, through programs that champion social justice and equality, through ground-breaking marketing and audience development tactics on the forefront of technology, and through taking strategically calculated risks in a risk-averse field. If ideas are a dime a dozen, what separates Bergauer is her experience and record of impact and execution at institutions of all sizes. Praised for her leadership which “points the way to a new style of audience outreach,” (Wall Street Journal) and which drove the California Symphony to become “the most forward-looking music organization around.” (Mercury News) Bergauer’s ability to strategically and holistically examine and advance every facet of the organization’s mission and vision is creating a transformational change in the office, on the stage, in the audience, in the community, and going well beyond the industry of classical music.

Originally published at medium.com on August 14, 2017.

Never Say “Gala”

California Symphony was the first orchestra to collaborate with Postmodern Jukebox, whose vintage cover songs have garnered over 500 million views on YouTube.

“You say you want to change and want to attract new and younger audiences, but everyone says that. Do you actually mean it?” asked Aubrey Bergauer of Board President Bill Armstrong as she was interviewing for the job of Executive Director in 2014.

“Well, we just cancelled our longstanding annual gala if that’s any indication,” Bill replied.

Fast-forward a few months: Bergauer took the job with the directive to “get new people in the doors” and knew there was a giant revenue line in the budget for some sort of new, to-be-determined fundraiser event in place of the old gala Ball. Her first week on the clock she reached out to Postmodern Jukebox — a band with a tremendous YouTube following for their vintage renditions of pop songs, led by trained jazz pianist Scott Bradlee — and asked if they would be interested in collaborating with an orchestra for a Roaring Twenties style party. What a “supremely awesome request” was the response from the band’s manager. The event went on to achieve triple the attendance of the last gala with more than half of attendees being new to the organization. And, here’s the kicker: the average revenue per patron who returned in the year after the event (i.e. their value to the organization in the 12 months following their first interaction with us at this event) was $438 in ticket sales and donations, all completely new money the organization had not previously seen. That’s not chump change, especially given these people’s previous value to us was zero. In fact, the ROI per each returning patron was 1403% in just one year.

Unpacking this success, there were a lot of things we did as we revamped our special events. In this business, it’s never build-it-and-they-will-come; it’s always work, and a lot of work in a very short period of time is what we hustled to do:

Location/venue. We knew if we were going to attract a different demographic, the country clubs of yore were out. Instead, we held the event on a rooftop in nearby Oakland.

Location = 3 acre rooftop garden with a view of the tops of Oakland skyscrapers

Introduced a new ticket type. Not everyone can afford a $500 ticket, so we introduced what we called a “Cocktail Ticket,” which was $125 and included the performance, plus two drinks, plus appetizers. No full dinner, and no guaranteed seat, but plenty of ambient seating options and cocktail tables to gather around. We sold a lot of these, and this was the entry point for most new people. We also offered our standard $500 dinner ticket and hosted tables, and those folks enjoyed the best seats at tables right in front of the stage, a full three-course meal, and hosted wine all night as usual for high-end special events at that price.

Left: Dinner ticket buyers (higher price more typical of a gala with prime seating and dinner); Right: Cocktail ticket buyers (lower price with drinks, appetizers, and dance floor)

Intentionally sought out young volunteers. Younger audiences need to see others that look like them lest there be any hope of them returning. So we sought out young, fun, smart volunteers. They dressed the part, and we received many compliments from our long-time patrons that the volunteers brought a great energy and were incredibly friendly and helpful.

Volunteer selling raffle tickets. Guests took notice of the young, friendly faces.

Black tie, schmack tie. Newsflash: some people like to dress up and some people don’t. So we said either way was ok. And we encouraged dressing up in the theme even though we weren’t sure how that would play out among our guests. Almost everyone dressed up — whether as the embodiment of the Roaring Twenties or in their designer gown — and everyone looked pretty fabulous either way.

Attendees young and old dressed up, some in the theme and some black tie.

Memory elicitation. If you’ve read our other posts on patron retention, you know this is something we care about a lot (even more than attracting new people). We knew that getting these new attendees to come back again was where the real challenge resided in terms of making all this work worth it, so we created a station where guests could write postcards (fitting with the theme and the new invention of airmail in the 1920s), to themselves or to friends, to whoever and as many as they wanted. After the event, we stamped and mailed all of them, and all those guests received their own memory elicitation device reminding themselves what a great time they had. Note: we also followed up with our regular first time attendee retention efforts.

Station for writing postcards (that we actually stamped and mailed after the event), because the new invention of airmail is the fastest way to communicate in the 1920’s.

Stellar performance. We (i.e. all performing arts organizations) blow people away at our regular concerts, and we (i.e. the California Symphony) wanted to do that here, too. Postmodern Jukebox is known for putting on incredibly entertaining shows (they even have a professional tap dancer!), and we knew that adding an orchestra would only enhance their performance. And we were right; PMJ and the musicians of the California Symphony rocked it. A question we’re often asked is how the musicians felt about it. The answer is good, and almost all their comments were in fact very similar to what we heard from patrons: “What a fun show that was! That was so awesome to see so many new people! Everyone was really into it!”

Performance with Postmodern Jukebox, their first orchestra collaboration.

Didn’t call it a gala. Never once did we call this event a gala — not internally or externally. We gave it a name, Speakeasy Symphony, and we developed a new vocabulary for how we talk about our events. Instead of saying “gala,” we use words like “fun” and “entertaining.” We know, this is [not] deep. But before you think George Merriam and Noah Webster are rolling in their graves, consider the business we’re in, the entertainment business, and at the end of the day, we are vying for people’s entertainment dollars. In other words, we now don’t ask, “What can we do for our next gala for it to really be a great fundraiser?” Instead we ask, “How can we create a program or event that is interesting and entertaining and FUN?” We have proven that if we can do that, people come and then the money follows.

What do you do after an event like that? How do you follow it? Two main tracks emerged for us in our event follow-up:

1. Use the data to see what worked.

2. Plan next year’s event to be just as good, but different.

We have said again and again on this blog that new audiences are NOT the Holy Grail. New audiences matter, and yes, as a field, we must be cultivating new audiences; however, getting someone to attend for the first time is not the end goal. Most orchestras are very successful at getting people to come once; it’s getting those people to come back a second time and ultimately cultivate a longer-term relationship where most of us actually need to focus.

So we did that. We invited those newcomers to return again and again, and it played out like this: now, two years, later, 11% of those first time attendees have returned. In the first year after the event, only 5% had returned, which on the surface, to us sounded really horrible at first. We dug deeper and learned that for those who did return, the average revenue per patron over the following year was $438 in ticket sales and donations. As we said at the top of this post, that’s $438 in new revenue per person in just one year that the California Symphony had not previously seen, and it’s a lot higher than the one-time ticket price that patron paid originally (remember, most of those new people originally came in at the $125 cocktail price….one year later they are spending $438 a year on average, which is nearly two and a half times what they originally spent — THAT’S not too shabby we decided.).

As we set out to plan the following year’s special event fundraiser, we loved the idea of using a non-traditional venue and knew we wanted to keep that element. We also knew we wanted to strike a better balance between new attendees and our core audience. Side note: perhaps this is a consideration more relevant to small and mid-size budget organizations because when you only have 6–7 concert sets a year, it’s really difficult to argue that any of those shouldn’t serve your core audience well.

A new event, called Cirque du Symphonie (think Cirque du Soleil with live orchestra), was the answer to that, and we did land a healthier mix of new attendees versus core audience:

More of our core patrons wanted to come. Closer to a 60/40 (returning/new) split instead of over half being new like it was for Speakeasy Symphony.
New attendees = 37% (again, reflecting a better balance of new and returning patrons)
New donors realized through the event = 30%
New patrons who have since returned (at the time of this writing, we are nine months after the event) = 6%, which is on par with, albeit slightly ahead of, the trend we saw after Speakeasy Symphony (which was 5% first timer return in 12 months following the event).

This season, we are coming up on our third year of this revamped special event series as we celebrate the orchestra’s 30th anniversary. The theme is “Symphony Surround,” and the orchestra will literally surround guests at dinner tables as they perform. Lined up is superstar violinist Anne Akiko Meyers who had a connection to our orchestra when she first performed here at the young age of 24; she returns now in gratitude for the California Symphony’s role in launching her career. Plus, it’s at another rad venue: the Blackhawk Automotive Museum full of one-of-kind classic cars (even the non-gear heads will enjoy the vintage bling on these cars).

Symphony Surround is the third iteration in the California Symphony’s newly designed special event model.

In summary, special events — like almost everything else we do as arts organizations — are hard and getting harder. Board consultant Chuck Loring said it best at a recent board development seminar produced by the League of American Orchestras, “We have to ask ourselves how special events fit in with our overall stewardship plan. We have to make sure we are creating repeat donors. Before you ever plan another event, you should first decide what the second date is AFTER this event before deciding to do the event in the first place.” Here, we are constantly asking ourselves if the juice is worth the squeeze, and at one point nearly four years ago, the board decided the answer was no, it wasn’t worth it, at least in its then format. We took a risk (which in hindsight wasn’t really much of a risk since something needed to change) to hit the reset button and completely re-imagine the way we thought about fundraising events for our organization. And we’ll never look back and say the word “gala” again.

Originally published by Aubrey Bergauer / California Symphony at medium.com on April 12, 2017.

Once and Done

Pictured: a mock-up of the envelope used in the California Symphony’s July 2016 fundraising solicitation.

Just about every arts organization runs a donation campaign as they approach the end of their fiscal year. The California Symphony is no exception as it’s the last chance we have to raise the funds necessary to end our season in the black. The problem is that this mid-summer deadline where we close the financial books on one year and begin another is important for us as an organization, but not in any way relevant — even arbitrary, perhaps — in the eyes of the donor. In other words, this is among the worst times and reasons to raise money.

Despite all that, not running a fiscal year-end fundraising campaign this year was not an option. We needed the money. An added parameter was that we needed to continue broadening our donor base, because our database of potential donors looked like this:

So this summer, we decided to run an experiment to answer the question: how can we tap the largest segment of our database — the people who have had no interaction with us in the last three or more years? No concert attendance, no donations, no special events, no free tours of our education programs, nothing. Zero interaction. Think about that. The largest group of untapped potential in our database is the people who care about us the least. Ouch. To make this even more painful, this absent group is not MIA for lack of us trying: they receive mailings with information for every concert, invitations to special events, and of course other donation appeals about three times a year. And if they’re on our email list (which a little more than a third of them are), they’re hearing from us even more. That’s a lot of effort we spend to invite people to engage with us, and for whatever reason it has all fallen flat for this group. In fact it has fallen flat for three years (and longer for some!).

So what do you do to get this group’s attention? Offer them a chance to have us leave them alone.

Usually, giving someone a chance to opt-out of communications is marketing suicide. That’s why unsubscribe links at the bottom of emails are so tiny and buried…no one wants to actively direct your attention to the place where you can escape all their wonderful marketing and fundraising messages. However, we rationalized that when everything else we’ve done for the last 3+ years has had no effect on this group whatsoever, something — anything — needed to change.

At about the time we were coming to this conclusion, Executive Director Aubrey Bergauer came across the work of University of Chicago Economics Professor and Department Chair John List. He and his team had published a handful of case studies where they partnered with a few large non-profits who purchased mailing lists for their fundraising solicitations. They frequently refer to these purchased lists as “cold lists,” as opposed to “warm lists” which contain people who have made a donation in the last three years. John List and his team experimented with these large non-profits, and in a mailing to 800,000 names (that’s a huge solicitation by the way — nearly a million people!), they offered a test group an option along the lines of “give now and we’ll never bother you again if you check this box.” They also mailed to a control group without the “once and done” option, as they aptly called it (give once and you can be done with us forever). The results were fascinating to us:

They raised 3 times more money from the “once and done” group than the control group
Only about 30% of the respondents actually checked the box
It did not reduce future mailing results

We decided we would try this with our own cold list. Not a purchased list of strangers, but with our own database of people who had gone cold, that large segment of people who had no interaction with us in three or more years. Risky? Perhaps. But what was the worst-case scenario, we figured? Worst case #1: someone who had no desire to interact with us anymore mails us back without a donation and checks the box. In that case, we agreed, we’d remove them from our mailing list per their request and we’d stop wasting money on someone who not only doesn’t want to hear from us, they’ve not produced any revenue for us in at least three years. Worth it, we decided. Worst case #2: people give, but a lot of them ask to be removed from the mailing list. Let’s just stop at the first phrase there — when has “people giving” ever been a problem? Especially in this scenario when these people were otherwise basically dead to the organization. Worth it, we decided. Worst case #3: People just don’t get it, don’t care, or it’s not an effective piece. That would be no different than everything else we’ve tried for the last 3+ years with this group. Worth it. Best case: some people who were cold as ice suddenly jump back in with a donation. Not even a ticket sale, but a cash-is-king donation. WORTH IT.

Over the next three months, we got to work executing the campaign. We developed special campaign materials for this group with “Once & Done” branding. We even added a line to the envelope that said “Make one gift now and we’ll never ask you again,” just to help ensure the open rates were as high as possible, because the first hurdle with a cold group like this is to get them to even look at your envelope for more than two seconds before tossing it into the recycle bin, let alone get them to actually open it and — gasp — read it.

Sample of the appeal letter and actual return slip from one of the “cold” prospects who made a donation after having no account history with us for several years. The red check on the return slip was made by a staff member when they processed the gift.

The mailing hit homes right after Independence Day with a deadline of July 31 (i.e. the end of our fiscal year, which was the impetus for this whole campaign), and the letter talked about the successes of the past year and how we were 94% towards our income goal for the season. (Side note: this idea of listing the highest percentage toward goal possible also came from John List’s research; his data showed that the closer you are to your goal, the more people are likely to give and the higher the average gift received. This is contrary to most nonprofit “best practices,” whereas usually, the industry standard is to publicize when you are at 60–70% towards a campaign goal. So we included that stat as a secondary test — it was true, we were very close (94%) to balancing our budget for the year — in every version of our appeal letter, not just to this Once & Done group.) Here’s how it all played out:

The Once & Done group resulted in 24% of all campaign donors. Of our other segments solicited (i.e. other appeals to people who did not get the “once and done” message such as ticket buyers, subscribers, recently lapsed donors, etc.), only our current, existing donors came in with a higher percentage of campaign gifts.
The Once & Done group made 17 times more gifts compared to the year prior, and generated nearly 15 times more revenue.
The side experiment of listing our very high progress towards goal in every prospect group’s letter resulted in exceeding last year’s totals in every category.
[Updated 9/19] Seven different households of the Once & Done group purchased tickets to attend our season opener concert. Extra fascinating given that they had gone at least three years without attending.
How many people checked the box to have us never contact them again? Only 5.

Just for fun (and full disclosure): we did have one donor mail us back an envelope containing only a dime and two pennies. But they didn’t check the box…

A few more clarifying notes that hopefully are helpful to those who have read this far:

For this experiment, we mailed to a lot of people. Normally, we don’t mail to every person in the database (too costly to always do that!) and generally target people who have interacted with us in the last 4–5 years. We wanted to make a special exception for the purpose of this experiment and mail to accounts that were older and colder, just to see how it would pan out.

This fall we are taking a deeper look at which “cold” people are better prospects to come back into the fold than others. For example, is a person who purchased season tickets three years ago but not since more likely to donate with this type of solicitation than a person who donated five years ago (but not since)? And how do these people compare to someone who came to a special event fundraiser dinner three years ago but hasn’t interacted with us since? Is there any difference in likelihood to donate between a donor who gave four years ago versus five years ago? All of these questions are being explored as we head into our next big fundraising campaign this fall.

And speaking of our next big campaign…shameless plug: through November 4, we’re running what has proven to be our largest fundraising campaign of the year for the last three seasons, a matching challenge where every donation up to $200,000 will be matched dollar for dollar. If you’ve enjoyed reading about the work the California Symphony is doing in this or other posts, please consider supporting these efforts by joining the campaign at any amount and having your donation doubled by the match.

Lastly, we have another plan for this inactive/cold group that we’ll be implementing before this year is over with the specific goal to get them back into the concert hall. We’ll tell you all about it in a future post.

Originally published by Aubrey Bergauer / California Symphony at medium.com on September 13, 2016.