Bucking trends | Bay Chamber Concerts reverses fortune with clever analysis, corporate underwriting and price cutting
Subscribers are the lifeblood of any performing arts organization. Revenue generated through season subscriptions ensures a steady cash flow and enables artistic directors to take creative risks by introducing obscure performers who might not draw big crowds.
This year, Bay Chamber Concerts, a Camden-based performing arts organization, bucked a national decline in subscriptions trend by adding 500 subscribers to its winter season. The 48-year-old organization was able to reverse its fortune just ahead of the economic decline through a combination of good luck and savvy data and pricing analysis conducted by a British international arts consultancy known for increasing sales and filling seats.
Tom Wolf, the artistic and executive director of Bay Chamber Concerts, also runs the arts management consulting firm WolfBrown in Cambridge, Mass. WolfBrown has a professional partnership with Baker Richards, a firm in Cambridge, England that analyzes ticket pricing for top arts organizations worldwide.
While Baker Richards had worked with large organizations, including the Philadelphia Symphony Orchestra and Huntington Theatre in Boston, the consultancy wanted to test its tools and income models on a smaller organization. Bay Chamber Concerts gladly obliged, says Chance Farago, its director of marketing.
Baker Richards analyzed eight years of data — Bay Chamber Concert’s entire database — looking at what each seat in the four venues the organization uses sold for and when. (Bay Chamber holds performances in the Camden and Rockport opera houses, the Strand Theatre in Rockland and the Strom Auditorium in Rockport.)
From this research, Bay Chamber Concerts learned more than it ever could have imagined. For instance, the analysis revealed that seating facing the left side of the stage is most popular in classical concerts with a pianist because many people want to watch the musician’s hands while he or she performs.
“They rated all our seats from cool to hot using a ‘Hot Seat Index,’ which was based on how quickly and frequently the seat was sold,” Farago explained, “then they told us, ‘You think these are popular seats, but people are really choosing these seats.”
Baker Richards also analyzed ticket yield, or how many people Bay Chamber sold tickets to, and at what price. “We learned that our yield was low because of all the discounting we did, including special offers, youth rates and subscriptions. We were not making as much per seat as we thought.”
Lastly, Baker Richards shared pricing models and its primer on the psychology of pricing. “They told us we could be more successful if we created different pricing models, so we created a luxury model for the summer season, and a … low-price model for the winter,” said Farago.
Studying pays off
Nationwide, audiences are tending to forego season subscriptions in favor of buying tickets for individual performances. According to Farago, this shift has hurt performing arts organizations, which benefit tremendously from the stability provided by season subscribers.
In an attempt to counteract this shift, Bay Chamber drew on Baker Richard’s findings about ticket pricing, and decided to try something that had also been attempted by Royal National Theatre in London, the Signature Theatre in New York and the St. Paul’s Chamber Orchestra in Minnesota. Bay Chamber increased the price of prime seats, but reduced other ticket prices to $20.
“We decided to go with $20, the single bill,” said Farago. “It was a scary proposition because if it didn’t work, we would lose a lot of money.” To make the risk manageable, Bay Chamber Concerts enlisted the support of a corporate sponsor, the Rockport real estate firm Northeast Land Cos., which covered half the risk.
The data analysis, ticket price reduction and corporate underwriting worked. “We’re selling more tickets at a lower price but making similar levels of revenue as in the past,” said Farago. Most importantly, Bay Chamber exceeded its subscription goals. In 2008, the organization sold 400 subscriber tickets. In 2009, that number increased to 900 subscribers, and the organization beat its subscription goal before the season started, a feat not usually achieved until midway through the season.
“Instead of blindly continuing along, the time we spent in data analysis proved to be particularly prescient with the downward trend in the economy,” adds Farago. “As good fortune would have it, we priced ourselves into the new market just ahead of the downward curve — and reversed a trend that could have been very damaging to us financially and artistically.”
Elizabeth Banwell is director of external affairs for the Maine Association of Nonprofits in Portland. She can be reached at editorial@mainebiz.biz.
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