Fundraising and Ticket Pricing reloaded

Second half of ABO annual conference in Derby from 16 – 18 February  2011, mainly delt with fundraising (encouraging corporate and private giving) and ticket pricing issues. The most thrilling contributions and presentations were made by Jon E. Limbacher from Saint Paul Chamber Orchestra (SPCO). He seems to be something like a guru for rethinking  development strategies for orchestras as non profit organisations (NPO).

Find some core issues from the discussion:  First step: check your mission (Why we exsist?), second step: check your vision (What we want to be? What we want to do?), third step: check your business model (How do we exsist?). The new  SPCO business model tries to focus on every single costumer, to catch him at least for a lifelong relationship, leaving artistic and relevant „footprints“ in his life. The formula is: CIO – consume – invest – own (feel and live the responsibility for „your“ orchestra). This philosophy is related to fundraising, marketing  as well as to development. And it’s a huge change in comparison to most of the other business models of US orchestras: The SPCO does itself not (longer) see as a commercial enterprise, the orchestra or the concert is not a product in terms of commercial or industrial marketing. Even the most successfull classical orchestras will never earn their total expenses. Commercial business behaviour of the orchestra is contradictory to philantrophy, if you are talking to potential donors and sponsors.

This brings us to ticket pricing. The SPCO has been very successfull in its – on the first view – rather risky pricing policy. One questions was: What is more dangerous for the orchestra?  An empty hall or reasonable ticket prices? The SPCO has been lowering ticket prices from between $ 11 to 75  to now $ 10 to 40. And – believe it or not – for the SPCO this works very well. The new meassage is: Simplify your offers!

Today there are only three price points: $ 10, 25 or 40 tickets for all concerts ($ 5  for children), no discounts on single tickets, no dicounts for subscribers, no discounts for early birds – no discounts at  all. Very simple, very clear.  Suscribers  get additional incentives (two or four free tickets: „invite your friends“  – which means: fill the hall with them and have a good time), but –remember – no  discounts. The lowest $ 10  SPCO ticket is as cheap as a ticket for a local movie theatre. Directly linked to this pricing strategies is grassrouts  marketing in means of direct marketing. No adverts, no commercials but direct marketing from peer to peer. Another special SPCO issue has been to expand venues (almost churches) in non-traditional neighbourhoods in the last few years. Some people don’t want to get downtown for a concert. They want to hear good music in their neighbourhood wearing casual clothes.

Some thoughts on modern fundraising: 40 percent come from corporate giving, 60 percent from private giving. Fundraising is a longterm business and based on personal relationship which needs stability within the staff. The traditional telefunding market is shrinking in the US. The emotional experience after a good concert is the most convincing promotion for fundraising.

A good fundraiser gives one percent of his annual income to the NPO he is working for. However, fundraising does not only mean „money“. It may be time, contacts, entry to networks, workforce, good will. „Peer pressure“ and emotional involvement of potential donors is much more important than possible tax deductions. Even board members have to be instructed on their regular fundraising and giving goals by checklist. Musicians of the orchestras should be involved in fundraising activities, too. And don’t  hang down heads: 80 percent of first time ticket buyers will possibly not stay longer than one year, but those who stays for three years may become a lifelong supporter.

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