Page 1

Q&A PMP: What are raving fans, and what are some interesting ways that they can help an organization grow? JE: A raving fan is someone who will come back, and will come back multiple times. Raving fans are important because those return single ticket buyers are the most likely people to become subscribers. People who subscribe multiple years are the most likely to become donors. People who give multiple years are the most likely to leave $20 million to an organization in their will. Have you ever had a situation where you’ve enjoyed a piece of music, and then you share it with someone who’s going to hear it for the first time? Through the act of sharing, it’s as if you’re hearing it again for the first time. That’s how you can leverage raving fans to bring other people to the experience: it helps their experience because now they’re able to share and recreate that first time for themselves. PMP: How can organizations with very limited budgets best capture, manage, and exploit data? JE: Many of the people that I talked to, we would get to the point where they’d say, “We have almost no tickets sold in advance, and people show up.” Well, what I suggested was that they do some really high-tech things (laughing). I said, “You know, if you see a face that you don’t recognize, you introduce yourself and you get the person’s name, and you write it down.” The experience of the concert is the core experience. You have time before and you have time afterwards. It is important that when you see the same faces there time after time, you get to know who they are. For many of the organizations, that’s 20, 30, 40 people—totally manageable. It’s a personal networking issue. Particularly the smaller organizations should never think that direct marketing and networking are different things. They’re not. So I think that organizations need to see their events as networking opportunities, both before and after. It’s important when you’re doing the networking that you’re getting a sense of who’s coming how often. Then there will have to be, at some point, some organization of the data. Yes, it can be done electronically—it can be done by ticket sales. But if that’s not what you have, it’s a human interaction. Once you have data, then you store it, however that is. Databases do not have to be electronic, and that’s something I try to remind people. PMP 40

Straight Talk: John Elliott

PMP: What is the most important information to collect? JE: You want to have the name information, the physical address, phone information if they’ll give it, and email information. Now, you also want to have a notation, or some way to connect that name to the performances they have attended—even those people who are collecting names at a concert fall short here. They have a name once, but if you’re going to find out who your raving fans are, by definition, these are people who keep coming back. If you have no way to determine how many times a particular individual has been there, then if you have a database of 1000 names, you aren’t able to clearly see your 75 raving fans. It is very much the case that what people do is much more important than who they are when figuring out what they might do next. I like the idea that you can evaluate people based on what they do, not where they live, the color of their skin, their age, their income, this sort of thing. It is the choice to experience certain things which is the greater predictor. All the other demographics don’t really say anything. PMP: What is the best approach for soliciting contributions? JE:The people who will give are primarily raving fans. I think the best appeal relates to the experience you have provided them. In direct marketing there’s an idea of lifetime value, where you can measure a customer’s financial value to you over time. But in all those cases, lifetime value is an exchange. And, in requesting a donation, I think it makes sense to know who you’re asking, and why you’re asking. So, if you just ask everybody, you know, well, no. But if you’re asking a raving fan, and it’s something like, “You know, you’ve been coming here for every performance for three years, and we’ve gotten to know each other, and I just wanted to let you know that we’re trying to raise money to do whatever the objective is, and we think that this is an important experience for you—can you help us out?” PMP: Did any other themes emerge during your PMP consultancy? JE: One of the things I talked about with people was the difference between their marketing materials and the artistic experience they offer. There’s a certain type of language that organizations sometimes adopt in trying to describe cultural experiences. Oftentimes it becomes more Latinate, and people begin to talk in longer words. And yet, heightened language is very poor at portraying emotion. And so we have abstract language to describe music that has a very emotional effect. And while conveying the artistic experience can be difficult, the closer you can come to achieving it, the truer your offer is. And I had this conversation with a number of people, where what they described to me was very powerful and emotional, and their materials weren’t.

On July 24, 2006, PMP hosted John Elliott at Settlement Music School, where he presented a seminar titled, “The Six Dirty Little Secrets of Successful Database Marketing.” Elliott specializes in applying the tricks and insights of the catalogue world to the non-profit sector. As president of Elliott Marketing Group, he tracks and analyzes consumer data for companies in order to improve marketing efforts. In Pittsburgh, where he is based, he has been lauded for his work with the Pittsburgh Cultural District and several participating arts organizations.

Secrets of Success: A Seminar with John Elliott

Elliott began his presentation by asserting, “The more limited your resources, the more important these tools are.” Especially in the arts, where time and funds are short, no one can afford ineffective marketing. The first two concepts to understand here, he said, are “target” and “offer.” The offer is the what you are making to whom, the target. For an arts organization, the offer comprises, as Elliott put it, “at the core, who you are.” Arts organizations compete more for audiences’ time than for their money. His research has shown that arts audiences rarely display the mentality of switching out patronage of one arts organization for another, or excluding one on the basis of choosing another. Rather, the true currency of the arts consumer is time. As for these six dirty little secrets — starting with number six — Elliott noted that 90% of direct marketing success is driven by getting to the right person with the right offer and then “not messing it up.” Elliott’s philosophy is to learn as much about probable buyers as possible, pitch to them, and then be on the ball when someone responds. Secret five, “Lifetime value goes both ways.” Keep in mind that customers get as much from your work as you get from their patronage. Don’t underestimate the genuine value that your organization has for buyers. Secret four, “Actions trump demographics.” This insight applies to marketing practices that focus on zip codes that include a high concentration of consumers. Just because a zip code is a hot spot for high-income families doesn’t mean that they should be where you focus your efforts. It’s more important to seek out each individual customer who has already bought from you. Secret three, “Experience drives brand.” Elliott expanded on this

point to indicate that one of the most important goals your organization can pursue is to create raving fans. More than just good for self-esteem, such fans play an immense part in keeping your organization and its brand alive. Secret two, “Collaborate aggressively.” In Elliott’s view, the more data that organizations have on hand about who has attended similar events, the better. Collaboration allows everyone involved to use marketing resources more effectively. Secret one, “You can’t be too rich, too thin — or test too much.” Systematically experimenting with different types of offers and keeping close track of responses from buyers with a current and reliable database always gives you more information about how to best sell what you do. “It is entirely possible,” Elliott affirmed, “for you to know, with certainty, what works and what doesn’t.” In all cases, he said, “Love your data.” Elliott derives the bulk of his insights about how to market an offer to whom on the basis of past purchases from the same organization. Thus, it’s crucial to be able to retrieve this information from your organization’s database. He recommended rules of database hygiene such as keeping parts of names separate and tracking parts of addresses consistently and separately. He also recommended never getting rid of customer data. “Keep it forever,” said Elliott. Over time, old data may reveal useful information. Organizations may also find it worth sending offers to targets who haven’t responded for some years. Using standardized addresses cuts down on undeliverable mail, as does taking advantage of the postal service’s national change of address service. Elliott offered further information on the stakes of direct marketing. He presented a scenario of someone looking through his or her mail. Rarely taking more than three seconds to look at any given piece of mail, that’s the amount of time an offer from your organization has to “make the counter,” rather than the trashcan. The most important element of mailings can be the envelope. People who have bought or given a donation to your organization in the past are multiple times more likely to purchase again than those who have never bought from you. To that end, data should include “RFM” information: Recency and Frequency of purchase, as well as the Monetary contribution. Databases should also distinguish between multiple buyers and single-purchase buyers. And as you test your marketing success, try to get a sense of how far back, in terms of years since last purchase, your organization should go when sending an offer. For the Pops, Elliott has found that 10 years back is profitable; another organization may find that after three years, response drops. Usually, Elliott argued, organizations don’t contact their best prospects often enough. Lapsed subscribers are still good targets. Insisting on such rigorous differentiation within purchasing information helped a theater company specializing in Shakespeare to realize that 80% of its revenue was coming from 40% of its mailing. Likewise, the New York Philharmonic confirmed that the bulk of its audience lived within a very limited number of Manhattan zip codes, earned over $75,000 per year, and were all heavy catalogue buyers. 80% of their audience has graduate degrees. Elliott concluded his presentation with a bid for the efficacy of collaborative marketing. In Pittsburgh, arts organizations nervous about sharing data learned that the vast majority of frequent buyers had in fact already purchased from their supposed competitors. “You share — you don’t own — your best customers,” Elliott said. Even though the arts face a shrinking market, revenues in his city have grown, with an increasing number of single ticket buyers and new subscribers. PMP 41


PMP 40 PMP 41