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Are you measuring the right metrics?

TRG Arts has released a video series on the 6 metrics that arts leaders should be tracking and managing. View all the videos in this series here.

Imagine if your organization measured only ticket volume. Of all the metrics that you track now, you’d be held accountable only based on that metric. The result? You’d do whatever it takes to get the maximum number of bodies in the concert hall or exhibit space, regardless of ticket revenue.

What if your organization instead measured only ticket revenue? You’d approach your work differently. Your thinking about pricing, segmentation, and audience engagement would change radically to get to that revenue goal, regardless of ticket volume.

Most organizations track and measure performance against a variety of metrics, including both ticket volume and revenue. The above example demonstrates that focus on one metric or another can impact marketing strategy, and the outcomes of that strategy.

In other words, what gets measured gets managed.

Organizations sometimes get hung up on a single metric or set of metrics, ignoring other metrics that could be critical to their strategy. As a part of this series for, we’re examining six metrics that arts and cultural organizations should be tracking to get a more complete picture of their organizational health. You can see the first two posts here and here. This month, I’ll examine the last two metrics in the series, both of which can complement metrics you are likely already measuring.

  • Most organizations measure subscriber or member renewal rate. Are you focused on this metric at the expense of other important loyalty metrics like the percentage of subscriber-donors?
  • Most organizations measure the percentage of capacity sold as an indicator that their pricing strategy. But are you also tracking the average revenue generated per ticket?

Metric #5: % of subscriber-donors

Click to play the videoIs renewal rate the best measurement of loyalty? While it shows how many subscribers or members arts organizations are retaining, it doesn’t indicate if patrons are growing in their loyalty. In this video, Keri Mesropov of TRG Arts explains why renewal rate can be deceptive and the metric arts organizations should consider tracking alongside it.

Why measure the percentage of subscriber-donors?

If I asked you about the most important metric to track subscriber and member loyalty, your answer might be renewal rate. It is important, but can be deceptive. Some performing arts organizations have a 90% subscriber renewal rate, which they’re proud of. They should be, but it could also be a sign of stagnation.

Why? Often when the renewal rate is very high, it’s because the majority of people who are renewing are long-term subscribers, who renew at very high rates. Even with a best-practice renewal campaign, renewal rates for new subscribers don’t often top 60%. If there were more newbies in the subscriber pool, the total renewal rate would be lower—and that would be ok, as long as subscriptions were stable or growing overall.

What TRG often sees is organizations with high renewal rates, but a declining number of overall subscribers. These organizations are very good at keeping existing subscribers, but not so good at attracting new subscribers. The number of new subscribers doesn’t keep up with even the small number of existing subscribers that the organization loses each year.

So, a high renewal rate can actually be a warning sign. Look at it alongside the ratio of new to existing subscribers, how subscriptions are trending overall, and how loyalty is growing in other ways. For example, many long-time renewing subscribers choose to deepen their commitment to and investment in an organization by making a donation.

How to measure the percentage of subscriber-donors:
We recommend that you pull this data point this from your last completed season or financial year, since many donors give at the end of the calendar or financial year or with subscription renewal. You’ll want a complete picture of donorship from that year. You’ll need two numbers: 

  • how many subscribers made a donation that year
  • total number of subscribers that year

Divide like so:

# of subscribers who donated divided by total # of subscribers equals % of subscriber-donors
If you work at a museum or membership-based organization, you’ll want to measure the percentage of members who made an additional contribution of some sort.
# of members who donated divided by total # of members equals % of member-donors
You can also calculate this number for your current year or season. Then you can compare the number from the last completed year or season to see how far you have to go to match last year’s number.

What the percentage of subscriber-donors tells you:
This measurement is not just about retention, like renewal rate. Instead, it tells you how many subscribers and members have grown in their loyalty with your organization by becoming donors. A patron might subscribe to get the best deals and access to tickets. That value proposition changes once a patron makes a donation, which is why subscriber-donors and member-donors have a higher lifetime value and are easier to renew.

What’s normal? Here are the ranges we typically see:

  • 31% or above: Keep up the great work! 
  • 24-30%: You’re doing fine. 
  • 17-23%: On the low side of normal. 
  • 16% or lower: You have opportunity here.

Basically, this metric tells you if subscribers or members are making the choice to upgrade with a donation. But it can also help you understand the following issues at your organization:

1. First, are departments at your organization working together to develop patron loyalty? Marketing and development tend to handle certain patron types, with marketing handling ticket buyers, subscribers and members and development handling donors. These two departments are responsible for patrons at different points in their evolution, as demonstrated below.
But what happens in the gap between marketing and development? Who’s cultivating those subscribers who are ready to be donors? Departments should work together on initiatives to ask subscribers or members for an additional gift, especially at renewal time.

2. This metric is also a larger indicator of how loyal your most active patrons are. Subscribers and members are the patrons who are attending the most. Do they see value in donating too? Patrons who subscribe and donate do so because they want to support the organization and underwrite its success.

3. Lastly, this number says a lot about your potential for major donors. If your number was 31% or above, you’ve got a bigger pool to cultivate up your giving levels. And if you were on the lower end of the spectrum, it tells you that you could have a lot of success with a formalized upgrade program to get your subscribers or members to donate. In the above video, Keri talked about 5th Avenue Theatre’s subscriber-to-donor upgrade program, called Super Subscriber. After seeing that they had opportunity to grow this metric, 5th Avenue Theatre reached out to subscribers who had already renewed or purchased a subscription, and asked for an additional $100 in exchange for specific, experience-related benefits.

In just four months, they developed 453 Super subscribers who gave a total of $51,000. 25% of them were brand new, fairly new, or newly-returned subscribers. And 70% had never donated before. That’s a great model for developing those donor-ready patrons.

Metric #6: Per capita revenue

Click to play videoIs your arts organization generating the most revenue it can for each event? There’s a way to measure that! In this video, Lindsay Anderson of TRG Arts explains how to figure out if your pricing strategy is causing you to lose money, and common causes of lost revenue due to pricing strategy.

Why measure per capita revenue? When it comes to pricing, many arts marketers think that the percentage of capacity sold is the most important metric. This metric is a simple measure of how full your events are.

But capacity sold doesn’t tell you if your organization is generating the most revenue you can for each event, regardless of how popular it is. To determine this, you should look at per capita revenue, also known as average ticket revenue or per ticket yield. “Per capita” is Latin for “for each head.” So, it’s a measurement of revenue, on average, for each person.

This metric is a barometer for one simple question: “Is our pricing right?”

How to measure per capita revenue:
If you’ve ever calculated average ticket revenue, per ticket yield, or average price paid, then you’ve already measured per capita revenue. No matter what you call it at your organization, here’s how you calculate it. You’ll need two sets of numbers:

  • Total sales revenue for each event in your season or year.
  • Total unit sales for each event in your season or year. (In other words, how many tickets you sold or visits were made.)

For each event this year, take your revenue divided by the number of tickets, or units.
total sales revenue divided by total unit sales equals per capita revenue
You can slice and dice this metric in a number of different ways, by series, by date, by buyer type, etc. You can also break per capita revenue out by group tickets, single tickets or subscription/membership purchases. We’d recommend you start with total per capita for each event.

Make a bar chart of your sales revenue for each event, starting with the lowest-selling. Then on the other axis, make a line for per capita revenue to correspond with each event. Here’s an example of what this format looks like:
What per capita revenue tells you:
In a successful pricing strategy, per capita rises as sales increase, like the chart above. That means your best-selling events yield more revenue per ticket than other, less well-sold events.

Too often, however, the chart looks more like the below, where ticket sales increase while per capita revenues actually go down.

You don’t want to see this negative trend at your organization. This is what strategies like dynamic pricing fight to prevent. Dynamic pricing isn’t always enough, though. Per capita revenue might drop as total sales volume rises because of some combination of factors, including:

Scale of house:
As a venue starts to fill, people tend to first buy seats in the main orchestra section—the center and mid-front of the theatre—and then start buying further back. In a traditionally scaled house, the further back the seat is, the cheaper it is. Therefore, the highest price points tend to fill sooner. (Indeed, most marketing and box office staff will tell you that high and low price zones tend to sell out first.) That means that as the event sells, the average price paid tends to decline on its own. Many organizations try to combat this by dynamically pricing the remaining seats. Most don’t consider raising base prices in farther back seats. (One example of this in action is Row L at New Wolsey Theatre.)

Inventory management:
Depending on where the premium-priced and cheap seats are (or, in the case of an exhibit, when viewing times are set), per capita revenue will vary based on the order and manner in which your box office sells tickets. By controlling when tickets are released to go on sale, you can reverse negative per capita trends. For seated events, this type of inventory management works hand-in-hand with scale.

Discounting and Comps:
An organization’s discount and complimentary ticket policy impacts this number enormously. When you discount tickets for your hottest events, you’re essentially reversing the effect that any dynamic pricing may have had.

For less in-demand events, many organizations fall prey to “week-of-show” panic. When deep discounts are available as the performance draws nearer, per capita revenue takes a nose-dive during the time when ticket sales surge. Some organizations even “paper” their house, or offer complimentary tickets to try to make it look fuller. This should not be necessary if the house is scaled correctly and you are holding tickets back from sale in sections that are further back.

Is this data point a priority for you? Remember, what gets measured, get managed. You set your priorities by what you monitor. And, as our consultants often say, what can be measured can be managed. Consider holding a weekly or bi-weekly meeting to monitor ticket sales, how events are filling, and metrics like per capita revenue, percentage of subscriber-donors, and other metrics that could be priorities for your organization. Tracking this metric empowers your organization to make data-informed decisions and set you up to get revenue results.


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