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April 27, 2005
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Broadway's Most Shining FAILURE:
Missed Database Opportunities
By Randolph Hobler
Published: Monday, December 1, 2003
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Direct marketing deficiencies run rampant on the
Great White Way. On average, the 32 theatres that
officially comprise Broadway have been running at a
71 percent capacity. Or, to look at it another way, 29
percent of the available seats each year are empty.
Here's a DM program that can help Broadway as well
as many other consumer market segments turn things
around.
Broadway. Where the neon lights are bright.
Where the writers and composers--the Lerner
and Loewes's, the Rodgers and Hammerstein's,
the Bernstein and Sondheim's--are super bright.
Where the words of Noel Coward and the lyrics
of Cole Porter blaze brightly. Where the
choreographers--Gower Champion, Bob Fosse,
Susan Strohman--are dazzlingly bright. Add in
gigawatts of bright from directors, costume
designers, set designers, producers, musicians,
everyone associated with Broadway: gigawatts
of bright. It must necessarily follow that
database marketing for Broadway shows is brilliant as well.
NOT!
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History
Peering Backstage
It's an understandable assumption. But when I recently went about
proposing 1:1 database marketing solutions to those that market
Broadway, I became increasingly exposed to direct marketing
deficiencies. The deficiencies, of course, became incorporated into my
proposal's situation analysis. The solution involves the application
applying customer process analysis to database marketing. This
methodology is applicable to many consumer market segments.
Opportunity Analysis
On average, the 32 theatres (not "theaters" thank you very much!)
that officially comprise Broadway have been running at a 71 percent
capacity. Or, to look at it the other way around, 29 percent of the
available seats each year are empty. By my calculation that's 12,080
empty seats per performance. Multiply that times eight performances
a week times 52 weeks a year and you get 5,025,280 empty seats
each year.
At an average value of $52 per seat, that's $261,131,560. OK, let's
just round off and say a quarter of a billion dollars each year for lost
seats alone. A billion bucks every four years. And that does not
include the lost multiplier value (parking, bars, restaurants,
shopping, etc.) of value to the economy of New York City of 2.5
which yields a total lost opportunity of $2.5 billion every four years.
So, a huge amount at stake. The uplift power of a best-practice
direct marketing, plus 1:1 database marketing program, plus
customer process analysis ought to be able to increase that 71
percent run rate by between 5 percent and 10 percent or even
more. But just try to get Broadway's ear.
Worst Practices
I was surprised at the prevalence of direct marketing worst practices
on the Great White Way. Let's look at just four of them.
1) Target Audience Identification
Broadway folks will tell you that they have databases
(they do.) But saying you have a database is like saying
you have a rocket. Is it a kid's toy rocket or a space
shuttle? What's in these databases? Contact information
of Broadway ticket purchasers. OK, until you factor in the
fact that the average number of tickets each purchaser
buys is three. That means, of all the Broadway theatregoers for a given period of time, the databases contain
contact information on at best 33 percent of them. Or, to
put it another way, Broadway marketers have no idea
who 67 percent of their audience is.
2) Show History
Because there are multiple databases (Ticketmaster,
Telecharge, Disney Hotline, TDF, etc.) no one database
profiles a total history of purchasers' shows attended.
Each database owner has only portions of an individual's
show preferences as suggested by their show history.
And, all too often, in their direct mail targeting, they
even ignore this one valuable piece of information, urging
past purchasers of Oklahoma! tickets, for example, to
come see a show they'd already seen. Each of those
pieces is 100 percent waste.
3) Lack of Customization
At the very least, you'd think Broadway marketers would
mail out a piece that says, for example, "Hey, you loved
Camelot, you'll love Flower Drum Song!" As far as I can
tell, this generation-old direct marketing technique never
happens, despite its proven ability to uplift response.
4) Missing the Offer Boat
The only offer I've seen in hundreds of mail pieces is a
discount. It's like the model T: you can have any color
you want, so long as it's black. Discounts have their
place, but literally hundreds of different persuasive offers
could be researched and tested, to significantly increase
response.
So, Broadway mails to only 33 percent of its audience--with the
same message to everyone and with only discounts as an offer. And
even more, within that 33 percent, Broadway mails to a significant
percentage who have already seen the show.
The Show's The Thing
Beyond these tactical shortcomings, lies a more basic, strategic
problem. The Broadway equivalent of the non-customer-oriented
"product-driven" sales push approach in business is, what I term
"Show-Driven." A show-driven philosophy permeates the entire
industry, across all marketing activities, across all transactions with
customers, across all services.
Show-driven says "Come to my show. This show is great." It fails to
consider in the least what the customer wants or needs, or how the
customer wants to be treated. The irony is, delivering on what the
customer wants often costs less. At least 32 times less. Two
examples:
* Yellow Pages/800 Number
Take a look at the Manhattan Yellow Pages, under "Theatres--Fine
Arts." All 32 Broadway theatres are listed (and many more--OffBroadway, Off-Off-Broadway, etc.) But not a single number (much
less an 800 number) for all of Broadway.
You want to find out what shows are playing, prices, times, etc.?
You'd have to make 32 phone calls. Mighty inconvenient for the
customer. And the cost of simply listing 1-800-BROADWAY would be
32 times less.
* Web Sites
I found 30 Web sites devoted to Broadway before I stopped from
exhaustion and exasperation. What customer wants to wade through
30 Web sites to find what they're looking for? And where is the
single Broadway Web site that could replace all 30 of these, at
1/30th the cost?
Not to pick on one show, but you would think that the Web site for
the biggest hit on Broadway would be "www.the producers.com." But
it's not! Customers would have to figure out that the URL for The
Producers is "www.producersonbroadway.com." Hunh? And this is
totally unnecessary, because the obvious and customer-convenient
choice--www.theproducers.com--is an available URL.
And how are customers treated once they land on the site? Does the
Web site say, in effect, "Hello what kind of show would you like to
see?" Does it follow with "What price range would you like?" Or with
"What kind of restaurants do you like?" and then serve up the
addresses of those nearest to the theatre? Hardly. You get
everything about the shows shoved in your face. All these shows are
great. Click here to buy. Now.
The business world has known for years that the reason to be
customer-driven is not to spend more money just to be nice, but for
efficiency and effectiveness. For Broadway, being customer-driven
would mean filling more seats for less.
Fill in Preferences to Fill Seats
Finding out what the customer wants
helps fill seats. In the state-of-the art
show-driven scenario, there are two
Broadway marketers--one pushing a
drama, the other pushing a musical.
The drama marketer's mailing includes
tens of thousands of people who dislike
drama. The musical marketer's mailing
includes tens of thousands of direct
mail pieces to people who can't stand
musicals. They have both not only
wasted many tens of thousands of
dollars that could have been better
targeted, but they have succeeded in
alienating tens of thousands of
prospects.
In the customer-driven scenario, both
marketers have bothered to find out
(among many other things) what their
targets' basic show type preferences
are. While this initially costs more to
collect, they save not only tens of
thousands of dollars on each mailing,
they save tens of thousands on all
future mailings as well. They get a
higher response rate, and they alienate
no one.
Web Site Glut
There are at least 30 Web sites a
customer would have to wade
through to buy Broadway tickets.
This list does not even include the
sites for individual shows.
www.broadway.com
www.theater.com
www.broadwayarchive.com
www.broadwayonline.com
www.broadwaytonight.com
www.broadway-pay-per-view.com
www.primetimespecials.com
www.disneyonbroadway.com
www.ticketsontime.com
www.selectaticket.com
www.marveloustickets.com
www.entertainment-link.com
www.broadway-ticket.com
www.livebroadway.com
www.oobr.com
www.broadwaysbiggesthits.com
www.broadwayacrossamerica.com
www.tixx.com/theatre
http://broadway-shows.us
www.ticketsplus.com
www.smarttix.com
www.telecharge.com
www.ticketmaster.com
www.ezticketsearch.com
www.nycvp.com
www.newyorkcity.com
www.IloveNYTheater.com
www.ibdb.com
www.theatredirect.com
www.broadwayyourway.com
Of course, this preferences model can
continue to be refined to bring ever
higher ROI by collecting information on
specific kinds of theatre preferences (e.g. Children's, Jewish,
Revivals, Comedy, Classics, etc.), as well as collecting any favorites
in terms of authors, directors, choreographers, etc. All of which
would be fulfilled via customized targeting and content. Collect once
and use forever.
One Shared Database
Clearly, the multiple Broadway databases have enormous name
overlap and duplication of database infrastructure and management.
But despite the potential cost savings, Broadway resists this idea.
One reason is that Broadway theatres see themselves in competition
with one another.
But this assumes that theatre-goers treat Broadway shows like
toothpaste or cars. Crest and Colgate are in competition with one
another because very large portions of their targets will only use one
brand or the other. Once I've bought a Honda Accord, that's all I
drive for years. Significant numbers of theatregoers go to many
shows. They don't see Hairspray as being in competition with Rent at
all. They go to both. And they'd much prefer getting a single
solicitation aligned with their preferences rather than having to cope
with 32 different pieces of direct mail.
A second objection by the powers-that-be on Broadway is squabbling
about "who owns the customer?" The theatres feel they own the
customer--after all, the customer is on their premises during the
performance. The ticket agents feel they own the customer--after all,
they're collecting their money. The producers feel they own the
customer--they market to those customers. A shared database goes
a long way towards eliminating these ownership issues.
A common database, armed with detailed theatre-goer profiles,
would enable Broadway to deliver on theatre-goers' unmet need--not
of a relationship with a show--but of a long-term relationship with
Broadway itself.
Database Extensions
One of the first orders of business of a centrally-run database would
be to find out who the missing 67 percent of the audience are--and
to begin targeting them. How many marketers would give their eye
to triple the size of their target market? Another extension would be
to capture contact information on the two million annual foreign
Broadway theatre-goers while they're here, and to extend that even
further to future visitors by working with overseas travel agencies.
Usage Occasion Extensions
Even higher response rates can be generated if one has bothered to
collect relevant profile information ahead of time. For example,
collecting (on a permission basis, of course) birthday and anniversary
information that is combined with preference information.
Thus, several months before a given theatre-goer's wife's birthday, a
customized piece goes out, suggesting that since his wife enjoys Neil
Simon, why not take her to a Lost in Yonkers on her birthday? Since
birthdays and anniversaries fill the entire calendar, these customized
mailings can drop on a rolling basis, uplifting response all year long.
Value-Added Services
A database solution such as that described above, combined with
communications technology can help fill empty seats in other ways.
For example, armed with the ZIP codes and e-mail addresses of the
theatre-goers, heavily-discounted same-day tickets could be offered
to those with a preference for a given kind of play who live within 10
miles of the theatre. And, by the way, all of these techniques can be
extended to the entire U.S. for all of Broadway's road shows, where
the seating capacity far exceeds that of Broadway itself.
Customer Process Analysis
All of the above makes straightforward sense to any database
marketer. What I would like to offer over and beyond established
methods is Customer Process Analysis.
This method is applicable--to one degree or another--to all consumer
segments. It consists of mapping, in detail, the consumer's process
for a given product or service category. A simplified map for the
subject at hand is shown in the chart "Theatre-Goer's Process."
(Click Here to See Larger Image)
This does not require any special skills, other than the ability to
make boxes and arrows. It does require careful thought, careful
numbering of steps and sub-steps and should be fleshed out via
market research.
You will notice that the customer's process is marked by silos. That
is, no one organization has a solution that applies across the entire
process. Each silo of organization that the customer must interact
with--the ticket agent, the theatre, the parking garage, the baby
sitter, the restaurant, etc.--does not coordinate with any of the
others. The customer has to be the glue to hold the whole process
together, and this is often an untidy, difficult task.
What is not so immediately obvious is that this seemingly mundane,
step-by-step outline of a customer's process contains many
opportunities. Every step in the process potentially contains the
opportunity for a value-added service.
For example, look for problem areas or unmet need areas that are
crying out for solutions. "Baby Sitter Search" is one of these. Finding
baby sitters is a big problem, and inhibits playgoing. "Travel" and
"Find Parking" are hassles and inhibitors. "Wait Outside Theater" is a
hassle and a problem in inclement weather. "Intermission" is a
problem with all the lines for the bathroom and the concession
stand.
Is Broadway currently providing any value-added services around
these problems? No. If they shared a database, could that provide
them with a platform for high-margin services that people would be
willing to pay extra for as an extension of their entertainment
offering? Most definitely yes. But it would mean working across silos.
Customer Process Solutions
My suggestion was a multi-faceted, customer-driven, ongoing
program called "Broadway My Way." Besides a single 800 number, a
single, customer-driven Web site and last-minute discount alert
services, "Broadway My Way" would remove or mitigate many of the
inhibitors to theatre-going. They would gladly pay extra to have a
problem-free experience. The net result: more revenue from more
seats filled plus revenue from value-added services.
Let me outline just a few parts of this overall solution. First, how
could you take the baby-sitting, travel and parking issues and solve
them all? Armed with the database you can solicit geo-targeted
theatre-goers to attend the theatre in a van. They pay with a
"Broadway My Way" affinity card. (Eliminates travel and parking
hassles, plus they get to meet and travel with other theatre-goers.)
Second, you source babysitters from the largest percentage
unemployed group in New York City--actors--and send them up in
the vans. They get off at the theatre-goers house. They return in the
vans after the theatregoers are dropped off. No extra cost of
transportation for the baby-sitters. And, instead of just reading
bedtime stories to the kids, the actors can perform the stories. The
kids win out. The van company gets business. The actors get work.
Broadway makes more money.
What about the inclement weather while waiting for the theatre
doors to open? Again, actors with "Broadway My Way" outfits can be
employed to hold logoed umbrellas during rainstorms (pay with your
affinity card). In summer, they can fan theatre-goers, provide them
with cold washcloths to mop their sweaty foreheads, give them cold
water to drink. In winter, little portable heaters can help keep feet
and hands warm.
Would theatre-goers appreciate all this? Would they tell their friends
and colleagues all about it? Would this increase Broadway
attendance?
Customer Process Opportunities
As is often the case when such systematic solutions are developed,
opportunities over and beyond just solving the immediate problem
present themselves. Combine bored people waiting outside theatres
with charming actors who can conduct sidewalk intercept interviews
to do market research or to build up database preference profiles
and you have an invaluable extra source of information to become
even more customer-driven.
The vans can become mobile merchandising shops, selling show
merchandise before and after the show. The vans could be equipped
with DVD players to play short video backgrounders on shows for
patrons hungry for more information.
Summary
So just how much is Broadway off? With respect to direct marketing,
database marketing, 1:1 marketing and the value-added services
derived from customer process analysis--way off. Why? Here are
some reasons:
* Unfamiliarity with database marketing;
* Unwillingness to change long-established marketing
approaches;
* False sense of competitiveness;
* Inability to narrow down decisions-by-committee;
* Short-term focus; and
* Show-Driven rather than Customer-Driven.
Does it do any good to point out all the cost savings and revenue
benefits from the suggestions above? Not in my experience and that
of industry insiders; the barriers and constraints are too great.
Some industries' cultures are such that they cannot accommodate
certain categories of change, no matter how beneficial they may be.
It's still "Broadway Their Way."
Randolph W. Hobler is president of Marketing Mastery, a marketing
consultancy. A veteran of IBM and Gartner Marketing Consulting, he
has served over 70 clients across a variety of industries. He can be
reached at Marketing Mastery, 134 Palisade Street, Dobbs Ferry, New
York 10522; phone: (914) 693-5938; fax: (914) 693-2545.