US Orchestras: Ways to Enhance Subscriber Relationships

American Orchestras Need to Get “Sticky” to Meet Challenges: A study from Oliver Wyman, “Reimagining the Orchestra Subscription Model,” commissioned by the League of American Orchestras, argues that American orchestras can meet their challenge to retain subscribers and meet revenue needs by exploring methods used in other industries (e.g., retail, grocery, fitness), that build “stickier” relationships with customers.

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There has been a shift away from subscriptions and toward single purchasing. Subscriptions are a key source of revenue, so the shift presents orchestras with difficult choices. Some larger orchestras have offset declines by increasing prices, but that strategy is unsustainable and the tradeoff may be reaching a break point that could trigger a far sharper drop in revenues. The report recommends that the current subscription model must be revitalized and it identifies strategies that orchestras of all sizes can use to increase customer loyalty and participation.

The data-rich study – the first of its kind for American orchestras – draws on ten years of data from four million customers across 45 orchestras of varying sizes and a profile and preferences survey of
4,000 people who attended an orchestra concert in the last five years. The final recommendations
are informed by a dynamic market simulation that tested the willingness-to-pay of 1,000 people making 10,000 purchasing decisions in order to reveal the relative attractiveness of various package features.

Some interesting facts uncovered by the study:
• Satisfaction remains high: Consumers do remain broadly satisfied with the orchestral concert experience – 90% of each patron type is satisfied with their orchestra-going experience and subscribers are the happiest with 77% reporting they are “very satisfied.”
• Consumers are not abandoning the orchestra for other art forms or entertainment options; but they are disenchanted with traditional subscription models.
• Millennials are not as price sensitive as many have assumed. To attract them, orchestras should consider expanding their use of social media, apps, and “bring-a-friend” programs that rely on the high level of interconnectedness of those young consumers.
• It’s about the relationships: Orchestras should explore methods used in other industries (e.g., retail, grocery, fitness), that build “stickier” relationships with customers.
“We are grateful to Oliver Wyman for their contribution to our understanding of subscription dynamics. The study provides a fact-based platform to support the experimentation and innovation taking place at orchestras today,” notes League of American Orchestras President and CEO Jesse Rosen.

Partha Bose, Partner at Oliver Wyman, sees the report as further evidence of Oliver Wyman’s deep commitment to the communities in which the firm works. “The recommendations contained in this report combine deep analytical rigor and sensitivity to the unique challenges of the entire range of America’s orchestras, large and small. They are cultural mainstays of the cities and towns in which they are located, and we hope the report helps them to flourish and to continue to enrich all of our lives.”

The report can be found at http://americanorchestras.org/images/stories/ReimaginingtheOrchestraSubscriptionModel2015.pdf and at http://www.oliverwyman.com/insights/publications/2015/nov/league-of-american-orchestra.html.

A version is also available on the iTunes App Store at https://itunes.apple.com/us/app/id997069338?mt=8&ign-mpt=uo%3D6.

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