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19th December 2016 Rebecca Moore

Learning Lessons #DMA

Andrew Reece, Sales & Marketing Officer, Storyhouse shares his involvement as a Digital Marketing Academy (DMA) Fellow.

The potentially straightforward question at the heart of my DMA experiment was this: What bonus drives customers to book – a money-off or an add-on incentive? The overall aim was to learn about what our audiences would respond to in Storyhouse’s future loyalty scheme, which will take effect in our new building.

After lengthy discussions with my mentor, Ron Evans, considering everything to loyalty in sport (vehement) and loyalty with shops (often mercenary – see Amazon for evidence of this), he helped me to pin my experiment down to this question, which was both tangible and testable. Whether it’s loyalty or incentive: at the heart of the experiment was the question of what motivates customers.

From our data, we know that our e-mail campaigns work. The day we send an e-mail results in an average of three times more ticket bookings than a day when we don’t.

Lesson: segment and refine our targeted mailings for maximum affect.

We also know that our offers work. Over the three Bank Holiday Mondays we were on sale with the Open Air Theatre, we sent three different offers: ‘Prices Held’ (i.e. the prices will increase in accordance with our dynamic pricing after this weekend); ‘Free Bubbly’ (book to receive a complimentary bottle of fizz for your party); and ‘Save money when you book X many tickets’. On these three weekends, we sold 8% of the total tickets for 2016. That means of the 217 days we were on general sale, nearly 2,000 tickets were sold on just 9 of them.

Lesson: take advantage of calendar events – sometimes one major campaign is more effective than five small ones.

When thinking about money off, it’s good to remember that our customers are informed about our dynamic pricing, and that we only tend to offer money off discounts once the price has gone up. With this, you’d perhaps think that a money-off incentive wouldn’t be that high, as once you get an alert that prices will rise – and you then don’t book – presumably money isn’t the overriding factor. It’s strange that the thing that makes you subsequently book is a money-off discount. And it’s also important for us to remember that what we’re selling is not a commonplace thing. We invite audiences to come to a city where there isn’t (currently) a professional theatre, to watch outdoor performances in a park, promising a relaxed environment where – unlike in most theatre spaces – eating and drinking is encouraged. In other words, we sell the experience as much as the shows themselves.

It would be fair to assume, then, that anything that adds to that experience (bubbly, ice cream, etc.) would be seized upon, although – again – the dynamic pricing must still be a factor. If customers wait until a free bottle of bubbly is on offer, the logical thing would be to work out how much the item costs for them to buy, and see if it’s worth it compared to the price rise. But the test shows there’s an even split between add-ons and money-off.

We sent an e-mail in April that read, “Did you know that Grosvenor Park Open Air Theatre ticket prices are on average 32.5% lower if you buy them early?”. Of the people who received that offer and booked, 10% of them waited – despite the price alert – until they could claim a subsequent bubbly offer. In other words: 176 people were told that they’d almost certainly pay more if they waited, and then waited anyway. From the numbers of the last campaign from a customer perspective, it can be either / or on the discount or add-on front.

But of course, from our perspective, they are massively different. With the discount, we were losing 15% from every ticket booked. With the free bubbly, we were losing the cost of one bottle of fizz per party.

On the average ticket spend from my campaign experiment – on the basis that the cost of a bottle of bubbly is £3.50 (approximate wholesale price) – then for every £3.50 spent on fizz, we can attract the same number of bookers than discounting by £11.24 (the average saving made by bookers who used the discount code). So a profit of £7.74 per booking, going with an option that is as popular as the alternative.
And of course, we can incentivise customers through our prices by the way we manage our dynamic pricing. Once prices have increased, we can offer add-ons at a fraction of the cost of a discount, and yield the same results. The money off in the short term is great for customers, but the fact that the fizz offer particularly has proven so popular – even considering that, as it’s one bottle per party, a group of six wouldn’t each get a full glass! – is because we’re selling the experience.

All of our marketing and communication with our audience is – on some level – about inviting them to buy into us, and to engage. Whether it’s e-mailing a video of the opening weekend to all those bookers asking,‘Spot Yourself’, or creating a personalised Literature Festival quiz for the customer’s mood.
Our loyalty scheme should be about continuing that. A fiver off the ticket price four months in advance is one thing, but the ice creams they’ll have on a Sunday in the Park with Shakespeare is something else. And that something else is what we’re selling!

And then we came to the end.
The Digital Marketing Academy has massively affected the way I approach both the day to day and long-term process of marketing. Through prompting me to question, interrogate and rethink assumptions I have about best practice – which is primarily just the status quo – my way of working will now always include a challenging of those preconceptions from the outset. Every e-mail is a chance to test, every campaign is a chance to learn, and every decision should be questioned.

In my second blog post I mentioned what is now my biggest takeaway from this process: learning to take a step back. We have so much information at our fingertips, with so many analytics and platforms and reports and stats to make use of. Sometimes in the busy world of arts marketing, we rely on knowledge – often inherited or instinctual – that we don’t really feel the need to evidence. I think this is because it can be hard to see the wood for the trees. From the get-go of the DMA we’ve been encouraged to ask ‘WHY?’ about everything, which is really reshaping how I approach marketing.

Questioning everything you know seems daunting, but the woods are just trees, and the trees are just wood. So let the questions keep being asked!

 

Header Image courtesy of National Portrait Gallery © Simon Mooney

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