Special Exhibits vs. Permanent Collections (DATA)

Special exhibits don’t do what many cultural organizations think that they do. If fact, they often do the opposite. Read more

Eight Realities To Help You Become A Data-Informed Cultural Organization

Is your organization integrating market research into strategic decision-making processes yet? Here are eight important things to keep in Read more

A Quarter of Likely Visitors to Cultural Organizations Are In One Age Bracket (DATA)

Nearly 25% of potential attendees to visitor-serving organizations fall into one, ten-year age bracket. Which generation has the greatest Read more

People Trust Museums More Than Newspapers. Here Is Why That Matters Right Now (DATA)

Actually, it always matters. But data lend particular insight into an important role that audiences want museums to play Read more

The Top Seven Macro Trends Impacting Cultural Organizations

These seven macro trends are driving the market for visitor-serving organizations. Big data helps spot market trends. The data that Read more

The Three Most Overlooked Marketing Realities For Cultural Organizations

These three marketing realities for cultural organizations may be the most urgent – and also the most overlooked. This Read more

cultural organizations

Audience vs. Market Research: A Critical Distinction for Cultural Organizations

An overreliance on audience research may be the very thing holding back even the smartest of cultural organizations.

With so many cultural organizations nowadays boasting audience research capabilities, why is the industry struggling so severely in terms of engaging new and emerging audiences? We’re confusing audience research and market research – and that difference is the topic of this week’s Know Your Own Bone – Fast Facts video.

Not a video person? No problem. This information is important, so here’s a summary:

 

Most cultural organizations collect and focus on AUDIENCE research

Audience research is any research conducted on specific audience segments to gather information about their attitudes, knowledge, interests, preferences, or behaviors. For cultural organizations, audience research is often conducted on current visitors and past visitors. It often comes in the form of exit surveys, zip code collecting, and reaching out to members and visitors through email lists or online communities (to name a few sources of these types of data).

Audience research is the most common type of research carried out by cultural organizations by a long shot – and some organizations even have their own audience research departments! These data help us uncover information related to who is visiting, why they are visiting, and what the people who are already engaging with the organization think.

 

Organizations often struggle with collecting MARKET research

Market research, on the other hand, is any organized effort to gather information about target markets – including the folks who may NOT be visiting an organization.

Market research can be tricky, though, because someone who is not visiting your organization cannot fill out an exit survey. They may not be a part of your online community, and they aren’t likely on your email lists. Simply put, they aren’t a part of your audience yet. The industry’s inability to reach underserved audiences relates directly to our lack of market research and a general overreliance on audience research.

 

Organizations need both types of research, but our lack of MARKET research risks big sustainability issues

Audience research has tremendous value for perfecting programming, but that’s not where the industry needs the most help right now. In order to remain solvent and relevant in today’s world, cultural organizations desperately need to engage new audiences.

Unlike audience research, market research helps organizations find out who is NOT visiting and why they aren’t visiting. This is a big deal because organizations are doing a really not-awesome job reaching new and emerging audiences! Not to mention, cultural organizations (museums, performing arts organizations, aquariums, etc.) are experiencing a phenomenon called the negative substitution of the historic visitor. This means that for every one person who profiles as a historic visitor who leaves the market, they are being replaced by less than one person. Millennials are not visiting cultural organizations at representative rates, and engaging people of diverse racial and ethnic backgrounds – who make up more and more of the US population each year – is perhaps our greatest opportunity to secure our futures. In other words, the demographic makeup of the US is changing and we really need to get better at reaching new audiences and making them our new regular audiences.

 

It is impossible to fully understand market perceptions of your organization and reach new audiences if you only study the people who are already in your community.

To succeed, organizations need both types of research.

 

Like this post? You can check out more Fast Fact videos on my YouTube channel. Here are a few related posts from Know Your Own Bone that you might also enjoy:

 

Interested in getting blog posts, tips, and some silly social media geekery periodically delivered in your Facebook newsfeed? Like my Facebook page. Or for more regular sharing of nonprofit marketing information, follow me on Twitter.

Posted on by Colleen Dilenschneider in Community Engagement, Financial Solvency, Nonprofit Marketing, Sector Evolution, Trends 3 Comments

Millennials Spend More Than Others On Food and Retail at Cultural Organizations (DATA)

Here’s what your organization needs to know about why this is happening.

This week’s Know Your Own Bone Fast Facts video takes a look at the onsite food, beverage, and retail purchasing habits of different generations at cultural organizations. You may be surprised by the findings….

Check out this chart from IMPACTS that is based on data from the ongoing National Awareness, Attitudes and Usage Study of 98,000 adults and counting. The chart indicates the respective percentages of visitors who make an onsite retail or food and beverage (F&B) purchase while visiting a cultural organization in the U.S.

IMPACTS consumer behaviors at VSOc

Millennials spend more money than previous generations on retail and food while attending cultural organizations. As you can see, millennials are nearly 22% more likely to make an onsite retail purchase than are Baby Boomers, and they are 10% more likely to make a retail purchase than members of Generation X. Not only that, millennials are 32% more likely to eat on site while visiting than Baby Boomers, and 11% more likely to eat on site than members of Generation X. Per capita millennial spending is 28% greater than that of Baby Boomers. That’s a big difference!

This information may be added to the important list of reasons why millennials are particularly awesome visitors to cultural organizations and why it’s incredibly important that organizations start reaching them at representative rates. The case for millennials being worth their bang for an organization’s-sustained-investment buck is growing stronger and stronger.

Why are millennials spending most and how can organizations utilize this information?

What we are seeing here is simply the applicability of broad trends affecting the cultural sector. Here are a few data-based factors that may be at play:

 

1) Millennials go out to eat more often than do other generations.

There are quite a few studies on this. And when we do go out to eat, we generally spend more money.

 

2) Millennials are more socially conscious consumers.

That said, this trend is also increasingly affecting all generations. This is relevant because most cultural organizations tend to be at least somewhat considerate about their food and beverage offerings. Think about the Monterey Bay Aquarium’s Seafood Watch, and other organizations with food options or initiatives focusing local, sustainably sourced food in their cafes. In fact, food offerings with supporting narratives that underscore food ethics (and then put signs on the table, notes on the menu to help tell that story) tend to result in more sales than food options without a narrative.

 

3) Millennials were raised in an aggregated experience environment.

Instead of an individual store, we went to malls growing up…and some of these malls had movie theaters, restaurants, bowling alleys and climbing walls. “One stop consuming” may be a concept that makes sense to this generation in this situation – and may be why some studies have even uncovered that millennials may prefer brick-and-mortor store shopping to online shopping when they can go. Not to mention, an aggregate environment makes things a whole lot easier for folks with small children.

 

Millennial trends are affecting our retail and food and beverage sales in a big way. Let’s harness the factors fueling this opportunity so that we can provide the best possible experiences for our visitors. Not to mention, let’s make the most of these opportunities so that we can secure additional funds to support our missions and operations.

 

Like this post? You can check out more Fast Fact videos on my YouTube channel. Here are a few related posts from Know Your Own Bone that you might also enjoy:

 

Interested in getting blog posts, tips, and some silly social media geekery periodically delivered in your Facebook newsfeed? Like my Facebook page. Or for more regular sharing of nonprofit marketing information, follow me on Twitter.

Posted on by Colleen Dilenschneider in Fast Facts Video, Financial Solvency, IMPACTS Data, Millennials, Trends Comments Off on Millennials Spend More Than Others On Food and Retail at Cultural Organizations (DATA)

Why Cultural Organizations Are Not Reaching Low-Income Visitors (DATA)

Why Programming for Low-Income Audiences are Unsuccessful

Data suggest that some types of cultural organizations are perceived as more welcoming than others. Here’s how we could do better.

With missions to educate and inspire audiences, many visitor-serving cultural organizations (e.g. museums, zoos, aquariums, theaters, symphonies, etc.) aim to serve low-income audiences in addition to their high-propensity visitors. So, just how good of a job are organizations doing when it comes to engaging lower-income audiences, and how can we make it even better?

Attitude affinities are a way of quantifying how the market perceives an organization in terms of its hospitableness and attitudes towards certain types of visitors. In summary, attitude affinities inform responses to visitor questions such as, “Is this type of organization for people like me? Do people like me ‘fit-in’ at this type of organization? Are people like me made to feel welcome and comfortable at this type of organization?” Extant data indicate a strong correlation between attitudes affinities and intentions to visit an organization. If people don’t feel welcome at an organization, then they are less likely to visit that organization.

IMPACTS quantifies attitude affinities on a 1-100 continuum, whereby the higher the value, the more welcoming (or greater affinity) a visitor perceives the organization. Data indicate that intentions to visit decline when attitude affinity-related metrics drop below 63 on this 100 point continuum. Due to this observed decline in intentions to visit, persons reporting attitude affinities ≤62 are generally not considered to be likely visitors because they do not feel welcomed by the organization.

Certain types of organizations seem to struggle more with negative attitude affinities as a barrier to onsite engagement than do others. Before we dive into the data, it is worth noting the attitude affinities have nothing to do with content – these are not measures of if people prefer animals to art. These are measures of peoples’ perceptions of feeling welcome at any organization. In other words, some organizations may defensively blame these numbers on a phenomenon innate to their content, but that’s generally not the case. After the data, I’ll discuss this a bit more. For now, let’s dive in!

 

IMPACTS - Art museum attitude affinities

As represented in the above chart, 552 of the 1,385 person sample population (39.86%) indicate attitude affinities ≤62 – suggesting that for four of 10 adults, a perception of not feeling welcome at an art museum poses a significant barrier to their onsite engagement. Remember: these metrics don’t even begin to contemplate other barriers like content interest/relevance, transportation, or schedule (a key barrier for general audiences). Out of the gate, four of 10 members of the US market don’t feel welcome in an art museum. But, hey, it’s not just art museums…

 

IMPACTS - History museum attitude affinities

510 of the 1,372 person sample population (37.17%) indicate attitude affinities ≤62. The data indicate that history museums are perceived to be slightly more welcoming to lower income audiences than are art museums.

 

IMPACTS - Science museum attitude affinities

448 of the 1,390 person sample population (32.23%) indicate attitude affinities ≤62 – suggesting that for approximately three of 10 adults, a perception of not being welcome at a science museum or science center poses a significant barrier to their onsite engagement.

We have combined science centers and science museums because the market generally does not differentiate between these two types of organizations. This lack of differentiation may sound like blasphemy for folks working in a science center or science museum, but the market doesn’t parse the nuance that may differentiate these types of organizations. (Preempting a question: No – the data is not meaningfully different when science centers and science museums are separately distinguished for this type of analysis.)

 

IMPACTS - Aquariums attitude affinities

300 of the sample size of 1,335 persons (22.47%) indicate attitude affinities ≤62 – suggesting that for approximately two of 10 adults, a perception of not being welcome at an aquarium poses a significant barrier to their onsite engagement. Comparatively, this is excellent news for aquariums “walking their talk” in terms of being seen as welcoming places! Loyal KYOB readers know that aquariums serve a bit like crystal balls for the future of cultural organizations because they tend to be both the most for-profit and nonprofit among their visitor-serving brethren. Market forces dictate that aquariums, as a simple means of business survival, often need to address changing attitudes, behaviors, and engagement strategies years before other types of organizations that may rely on large endowments and government support.

 

IMPACTS - Zoos attitude affinities

277 of the 1,512 persons sampled (18.32%) indicate attitude affinities ≤62 – suggesting that for less than two of 10 adults, a perception of not being welcome at a zoo poses a significant barrier to engagement. Good work, zoos!

 

Orchastra and symphony attitude afffinities

703 of the 1,540 persons sampled (45.65%) indicate attitude affinities ≤62 – suggesting that for nearly half of the sampled adults, a perception of not being welcome at an orchestra or symphony poses a significant barrier to their onsite engagement. Yikes!

However, for several orchestras and symphonies, this data would hardly qualify as surprising. Many orchestras and symphonies have been challenged by dwindling audiences and are experimenting with creative engagement strategies to better cultivate new constituencies. These data may suggest that overcoming the barrier to engagement may have less to do with promoting a new artist or performance, and more to do with promoting effective access programming.

 

In sum, what do these negative attitude affinities look like among the cultural organizations discussed here? At the risk of inserting one of the most glass-is-half-empty charts to ever grace KYOB (but in the spirit of “real talk”) here’s a summarized analysis: (Don’t worry! There’s a lesson here for improvement so we can move toward beating this! More after the chart…)

IMPACTS - Negative attitude affinities

Why are attitude affinities better for some organizations than for others? There’s a possible, data-informed reason. But first, I need to myth-bust the immediate go-to reason that is probably popping into many-a-reader’s head right now:

 

A) Attitude affinities do not generally correlate with admission price

It was my first thought, too. (Or I guess it would have been if I didn’t do so much data-driven work with regard to admission pricing). Data suggest no correlation between admission cost and attitude affinities. The average visitor to an aquarium reported paying approximately 52% more to visit than did a visitor to an art museum, and also reported 73% lower negative attitude affinities. In other words, persons who don’t feel welcome at an organization don’t necessarily do so because of cost-related factors.

It is important to remember that admission price is not an affordable access program. These things are different. Admission pricing enables successful affordable access programming by supplying the funding required to actually serve low-income audiences – a thing that many organizations (even free ones) aren’t doing very well.

IMPACTS - Average admission price paid

 

B) Attitude affinities DO correlate with lack of awareness of access programming

Interestingly, when it comes to tactics to mitigate cost as a factor to visitor engagement, households reporting annual incomes >$250,000 are significantly more likely to be aware of an organization’s affordable access programming than are households with annual incomes <$25,000. In other words, there are more people annually earning $250,000 receiving messaging about access programming than the people that actually need the access programming! In the case of orchestras and symphonies, high-income households are 3.35x more likely to be aware of an organization’s affordable access programming than are low-income households for which these programs are created!

IMPACTS - Access programming awareness

Low-income audiences that most need access support or assistance are comparatively unaware of access programming opportunities from these types of organizations. BUT that doesn’t mean that those organizations aren’t offering them (as evidenced by the relatively high awareness of these access programs among households with annual incomes >$250,000).

The reason why this is happening is that same reason why “free days” to cultural organizations attract people with higher average annual incomes than do non-free days: Organizations market access programs to high-propensity visitors and historic audiences because those are the folks that they know how to reach. This is happening because organizations generally neglect making meaningful, sustained investments in promoting these programs to the audiences whom they most intend to serve.

Underserved audiences are by their very definition not currently engaging with our organizations. They are not onsite to complete audience research surveys. They are not on our email lists. They are not following us on Facebook. They don’t like our Instagram posts or retweet our messages. So when we boast of our affordable access programs using these channels, we are mostly speaking with our current constituencies.

Engaging underserved audiences requires a sincere and sustained investment. We can create the greatest access programming possible, but if the people who need it aren’t made aware of it, they are unlikely to engage with our organizations.

In order to reach these audiences, we need to have a different messaging strategy than we do to reach other types of visitors. This means building relationships with leaders in lower-income communities to help spread the word, partnering with organizations that already serve these audiences (e.g. churches, schools, libraries, etc.), and actually thinking about how these hopeful audience members make decisions. It is completely different than the marketing and PR that you are already doing in order to reach non-affordable access audiences (i.e. the people that you need to engage in order to keep your lights on and make that messaging to lower-income audiences possible).

Lack of access programming awareness is not the only barrier to engagement for low-income audiences. There are a whole host of barriers to access that cultural organizations should work to overcome (including schedule, relevance, content disinterest, transportation, etc.). These data focus on attitude affinities and do not aim to resolve other barriers to engagement. That said, it stands to reason that access may be the key issue on the critical path to engagement. After all, if audiences are not aware that you offer an access program for them, then, well, they aren’t aware that you offer an access program for them. These folks may not know that you are doing anything to reach them in the first place!

On the surface, these data may look like bad news – but they’re not. This is potentially good news because we can see something that is happening and how it may be unknowingly sabotaging our access programming. More importantly, we can fix it! This information allows us to stop spinning our wheels and focus on where our access programming may be getting stuck – in our messaging.

 

Like this post? Please check out my YouTube channel for video fast facts! Here are a few related posts from Know Your Own Bone that you might also enjoy:

Interested in getting blog posts, tips, and some silly social media geekery periodically delivered in your Facebook newsfeed? Like my Facebook page. Or for more regular sharing of nonprofit marketing information, follow me on Twitter.

 

Posted on by Colleen Dilenschneider in Community Engagement, IMPACTS Data, Myth Busting, Nonprofit Marketing, Sector Evolution, Trends 6 Comments

Local Audiences Have Skewed Perceptions of Cultural Organizations (DATA)

Regardless of region or cultural organization type, local audiences are the hardest to please.

As cultural organizations, we tend to love our local audiences. We provide them with all sorts of benefits, believing that local audiences are our best audiences. But, interestingly, data suggest that some of that love may be unrequited.

This week’s Fast Facts video features data that may be tough for organizations to swallow, but may prove important in improving their respective understanding of their audiences. Knowing how local audiences perceive organizations will help them develop more effective strategies for successfully engaging these visitors. As it turns out, local audiences have a skewed perception of the organizations that are closest to them – and it’s not good.

IMPACTS tracked perceptions among 118 visitor-serving organizations in the United States that charge admission. This study comprised multiple types of cultural organizations, including museums (e.g. art, history, science, children’s), zoos, aquariums, botanic gardens, theaters, and symphonies. All organizations were located within the United States, but from different cities and states throughout the country – including both major metro markets and less populated regions. The data ALSO includes both large organizations that are recognized nationally AND more community-based museums that singularly pride themselves on serving locals. In other words, you “This doesn’t apply to me” this data at your organization’s own risk.

For this particular data set, we wanted to know the value for cost perceptions of people attending cultural organizations – or, how good of a value these audiences thought that they received with regard to their visitation experience. (Know Your Own Bone readers have seen this type of perception metric used before.) Take a look at what we found when we cut the data by travel distance.

 IMPACTS value for cost by distance

Local audiences believe that the value of the visitor experience is less worthy of the organization’s admission cost than non-local visitors to the same institution. On average, people living within 25 miles of the organization (or, locals) indicate value for cost perceptions that are 14% lower than those of regional visitors!

But so many organizations offer discounts for locals. Are these folks even paying full admission? No. On average, the locals in this data reported paying 20% less than regional visitors – and they still report that the value wasn’t as worthy of the cost as non-local audiences paying full admission!

Okay. But local audiences are probably more satisfied with their experience, right? After all, the organization is right there strengthening the reputation of their own city, and, again, many are getting in at a reduced cost.

Nope again. Take a look at the data cut for overall satisfaction in regard to distance traveled. Locals report satisfaction levels that are 11% lower than regional visitors who had the same visitor experience.

IMPACTS local satisfaction

This probably seems nuts to many people. What is going on?! Three important things are happening here, and recognizing them may help us create programs for locals that provide a more satisfying and valuable experience.

 

1) People value what they pay for.

These findings support the well-known tenet of pricing psychology that people value what they pay for. Personally disagree in a statement of defense? I didn’t make up this fact – it’s well known by economists and takes place in many situations. And this reality is obvious in the data here. The locals reporting the lowest levels of satisfaction were generally the ones visiting at the most deeply discounted cost basis.

 

2) Folks believe that good things are far away.

We reliably uncover the misconception among locals that if something is that great, it probably isn’t in their backyard. That’s a false premise, but it tends to permeate local perception. Amazingly (to me), this is even true in New York City. But the finding makes sense. Ask someone about the greatest cultural experiences and they are more likely to cite famous entities overseas or across the country than an organization nationally perceived as equally satisfying and successful that is located in the respondent’s community.

 

3) Cultural organizations have created local entitlement

This point is by far the most important: Many organizations have trained locals to feel entitled to free or reduced admission, perpetuating this whole cycle of low satisfaction and low value for cost perceptions. In essence, we created and keep on promulgating this very problem…and we have spread it around like a plague. And it’s a nasty one, lowering our perceived value, devaluing our missions, reducing satisfaction in our experiences, and promulgating not-so-great reviews and word of mouth endorsement.

Locals are obviously incredibly important to our organizations, but there’s an opportunity to design better access programming opportunities for local audiences that are not unintentionally perceived as entitlements. This may mean focusing more on promotional strategies and unique events than everyday discounts.

 

This is the kind of data that I get a chance to share that is likely to make organizations angry. And I can write about it and we can elevate ourselves as a sector and get smarter about our engagement strategies, or this powerful finding could remain private for IMPACTS clients. Keeping it private doesn’t help anyone. The data that makes leaders angry is often the most valuable data. It makes us angry because it challenges something that we thought was “safe.” It makes us think harder. And I believe that thinking harder is always good.

Knowing the true challenges attendant to engaging local audiences means that we are one step closer to overcoming them. Locals may not always be the best audiences for cultural organizations – and it’s largely because of organizations overlooking basic economics and training our audiences into self-sabotaging practices.

 

Like this post? Please check out my YouTube channel for more fast facts! Here are a few related posts from Know Your Own Bone that you might also enjoy:

 

Interested in getting blog posts, tips, and some silly social media geekery periodically delivered in your Facebook newsfeed? Like my Facebook page. Or for more regular sharing of nonprofit marketing information, follow me on Twitter.

Posted on by Colleen Dilenschneider in Community Engagement, Fast Facts Video, Financial Solvency, IMPACTS Data, Myth Busting 1 Comment

Admission Price is NOT a Primary Barrier for Cultural Center Visitation (DATA)

Cost is not a primary barrier to visitation Know Your Own Bone

It’s time to get real about why many people aren’t visiting cultural organizations. Generally, price is not the biggest barrier. 

Cultural organizations have their work cut out for them today. These visitor-serving organizations (museums, historic sites, aquariums, zoos, theaters, symphonies, etc.) are experiencing negative substitution of their historic visitors, often resulting in decreased attendance – at least until organizations get better at reaching underserved audiences such as millennials and “minority majorities”.

It’s a big challenge…and the best way to overcome this challenge is to identify and remove the true barriers to visitation for likely visitors. In order to do this, we need to get smarter about which barriers are real and which are excuses for organizations to avoid the need to think critically about their audiences.

We need to knock it off with the excuse that folks aren’t visiting cultural organizations primarily because of admission pricing.  The simple fact is that scant data exist to suggest that admission cost is the primary culprit when it comes to barriers to visitation. When we mistakenly blame price as the primary culprit for lack of engagement, it holds organizations back from providing better access opportunities and more relevant content. Before we dive deeper into the data, here are four important reminders regarding admission pricing:

A) Admission pricing is a science, not an art.

Determining your admission price should involve neither looking around at other institutions nor sitting around a table of executives and saying, “I guess $20 sounds right…”

B) Admission pricing is NOT related to affordable access.

In other words, organizations that charge admission should charge admission and also have intelligent, targeted access programming for low-income audiences if this is part of their mission. Data suggest free days are not a magical elixir when it comes to attracting low-income and other types of underserved audience. Subsidizing admission prices as an affordable access strategy is neither effective nor sustainable because admission pricing is binary – people can either afford it or they cannot. When organizations subjectively lower their data-informed admission price, they hurt themselves AND they are still unable to better engage underserved audiences.

C) Free admission is not a cure-all for engagement.

In fact, data suggest that free admission has relatively little sustained impact on attendance. It is difficult to find a single celebrated economist who denies this fact.

D) Not everyone wants to visit cultural organizations.

The people who want to visit cultural organizations (i.e. they have the demographic, psychographic, and behavioral attributes that indicate an increased likelihood of visiting an organization), are NOT generally low-income audiences. Not everyone wakes up thinking that it would be fun to visit a museum…but the kinds of people who are so inclined do have some things in common. The reality is that the majority of the people who actually visit cultural organizations are able and willing to pay to do so.

Certainly, this is not to say that organizations can charge anything they’d like! But it is to say that this price issue that causes anxiety among the sector isn’t quite the issue that we make it out to be. Now that these baseline conversations are out of the way, here are three items to consider that underscore the fact that cost is often hardly the visitation barrier that many organizations believe it to be:

 

1) Cultural organizations charging admission have similar value for cost perceptions as other experiences

Consider this data from the National Awareness, Attitudes and Usage Study of Visitor-Serving Organizations (an ongoing study with a sample size that recently surpassed 100,000 US adults) that quantifies the value for cost perceptions of various leisure activities that charge admission. This is a measurement of how valuable an attendee believes the experience to be relative to the price of admission. (Or, how much bang that a visitor believes that they got for their buck.)

IMPACTS - value for cost of experiences

Cultural organizations that charge admission generally have very favorable cost perceptions – especially when compared to other admission-charging, leisure activities. In fact, folks paying admission to attend a museum, zoo, aquarium, live theater, classical concert, or ballet report – on average – getting better bang for their buck when compared to attending a rock concert or a sporting event (e.g. MLB, NBA, NFL)!

For some reason, it seems that even some cultural leaders who fiercely believe in the value of their organizations worry that people may be feeling ripped off by having to pay to visit a cultural organization. This is not the case. It’s not even close to the case. I don’t know why even our own industry leaders seem to think this, but it is a myth and we need to bust it.

Cultural organizations provide value to people – and this isn’t some inter-industry pep talk! Data demonstrate that cultural experiences are generally worth paying for. Period.

 

2) Organizations that charge admission generally have higher satisfaction ratings than organizations that do not charge admission

The data below measures overall satisfaction as reported by 1,639 individuals who attended these seven types of cultural organizations as both paying and non-paying visitors. In other words, each respondent attended the same type of organization (e.g. science museum) within the past two years, and had at least one experience in which they were charged admission, and at least one in which they were not – either because a similar organization of the same type offers free admission or they attended on a “free day.”

IMPACTS - Free vs paid admission satisfaction

The basic tenant of pricing psychology holds true that people value what they pay for. Organizations that charge admission do not have lower satisfaction metrics than organizations that do not charge admission. In fact, the opposite is true: Organizations that do not charge admission tend to have lower visitor satisfaction rates!

Long story short: Free admission is neither a cure-all for satisfaction nor for increased visitation.

 

3) Cost is not a primary barrier to visitation

This data also derives from the ongoing National Awareness, Attitudes and Usage Study of Visitor-Serving Organizations. We wanted to know why folks who reported having an interest in visiting a cultural organization hadn’t actually visited within the past two years. The results are probably not what some might imagine:

IMPACTS - Barriers to repeat visitation

With an index value far less than 100, cost (i.e. being “too expensive”) is hardly a significant barrier at all! True barriers to visitation revolve around relevant content (i.e. preferred alternate activity), access challenges, and schedule. Schedule issues are a very big deal – and they are among the most prominent barriers to engagement that cultural organizations of every kind prefer not to address.

 

There are many reasons why visitors may not be attending cultural organizations, but for those who are likely to attend, cost is not a primary barrier. We need to move this conversation forward, and in order to do so, we need to retire untrue assumptions and excuses about our barriers to engagement. Sure, people like free stuff. But what cultural organizations offer is valuable and people are willing to pay for it.

Let’s put cost to rest as the immediate “go to” excuse for lower visitation and start focusing on real ways to increase access and create programs that truly fulfill our missions of educating and inspiring audiences. There’s work to be done and we are delaying progress with this excuse that allows us to overlook our biggest opportunities for engagement.

 

Like this post? Please check out my YouTube channel for video fast facts! Here are a few related posts from Know Your Own Bone that you might also enjoy:

 

Interested in getting blog posts, tips, and some silly social media geekery periodically delivered in your Facebook newsfeed? Like my Facebook page. Or for more regular sharing of nonprofit marketing information, follow me on Twitter.

Posted on by Colleen Dilenschneider in Community Engagement, Financial Solvency, IMPACTS Data, Myth Busting, Sector Evolution, Trends Comments Off on Admission Price is NOT a Primary Barrier for Cultural Center Visitation (DATA)

Fads vs Trends: How Organizations Can Tell The Difference (And Why it Matters)

Mixing up fads and trends often leaves executives frustrated, confused, and – worst of all – fearing innovation. Here’s how to spot the difference. 

Understanding the difference between fads and trends is critical for all organizations. However, many leaders seem to be unaware of their important differences. Today’s Fast Facts video aims to differentiate these critical concepts, and also provides a quick tip for how to spot the difference.

Both fads and trends can play an important role in an organization’s success – but they must be treated differently. If they are not, leaders risk burning out adapting to every fad, and critical trends required for an organizations’ survival may be missed. Let’s start by looking into fads and trends individually.

 

Fads come fast and fade away

A fad is any form of behavior that is intensely followed by a population for a short period of time. The behavior will rise relatively quickly and fall relatively quickly once the perception of novelty is gone.

There are some great fads out there! Collecting beanie babies was a fad, so were pet rocks, sending spam, #followfriday, Ouiji boards, troll dolls, water beds…the list goes on. We can thank fads for basically everything that we wore in the 80’s (or 90’s, or 2000’s…) And there are a lot of fads going on right now that may bring us a laugh twenty years from now. 

Fads certainly have value and they can profoundly change organizations- consider the ALS Ice Bucket Challenge! Utilizing fads in marketing and programs can increase top-of-mind awareness, demonstrate the timeliness of your organization, and serve as a gateway for new audiences.

This is all great and important stuff but – remember – fads don’t stick around.

 

Trends solve problems and get stronger over time

A trend, on the other hand, gets stronger over time and does stick around. Trends have identifiable and explainable rises that are driven by audience needs. They help solve a problem for people. In the words of the forever-awesome Seth Godin, “A trend gains power over time, because it’s not merely part of a moment, it’s a tool, a connector that will become more valuable as other people commit to engaging in it.”

The increasing use of social networks is a trend (that connects us to one another). So is quitting smoking (which lengthens our lives), evidence-based medicine (that removes the guesswork in medical-related situations), and the use of mobile devices (that allow us to look up information in real time). These are things that have grown – and continue to grow – in market penetration. They solve problems. They represent new ways of life.

Organizations ignore trends at their own risk. Ignoring trends means that they will either be forced to adapt later and will necessarily be behind, or the organization will fade away.

 

Confusing fads and trends causes big problems

Trends inform your organization’s successful evolution. When organizations write off things like web-based engagement or data-informed management (for instance) as fads instead of trends, evolution stops. Things get held back.

However, if we approach passing fads as trends, we cry wolf on organizational change. We burn out believing that every week, we need to change our organizations structure based on “what’s hot right now.” Treating fads like trends can lead organizations to become overwhelmed, give up on following along, and, again, stop evolution.

 

A trick for telling the difference between fads and trends

So how can your organization figure out if something is a fad or a trend? A helpful trick may be to consider that trends inevitably affect some form of the organization’s engagement strategy, but fads usually influence tactics. This isn’t a fool-proof trick, but it can help your organization think strategically about the differences between both fads and trends.

For instance, social media use is a trend and that affects your engagement strategy, but selfies affect how you can carry out that strategy. Screaming “YOLO” and going gluten-free are things that folks may be doing these days – and, in order to remain relevant, your organization may benefit by embracing them for now. But these fads affect your organization’s tactics (and messages and programs), not its strategy. Data-informed management affects your strategy. Embracing transparency affects your strategy. The trend toward personalized interactions and programs thanks to our increasingly individually-tailored world is a trend and also deeply affects our strategies.

If there is growing, multi-year data demonstrating that something affects the market, then you know it’s a trend. But sometimes we need to know when and how far we should move and embrace change before there’s multi-year data telling us that something is sticking around.

Both fads and trends have real value for cultural organizations, but understanding the difference may be necessary for survival. Fads can inform your tactics and help you to maintain the perception of being “current,” but ignoring trends can lead to irrelevance and create a divide between organizations and their audiences.

 

Like this post? Please check out my YouTube channel for more fast facts! Here are a few related posts from Know Your Own Bone that you might also enjoy:

 

Interested in getting blog posts, tips, and some silly social media geekery periodically delivered in your Facebook newsfeed? Like my Facebook page. Or for more regular sharing of nonprofit marketing information, follow me on Twitter.

Posted on by Colleen Dilenschneider in Community Engagement, Financial Solvency, Myth Busting, Sector Evolution, Trends Comments Off on Fads vs Trends: How Organizations Can Tell The Difference (And Why it Matters)

Schedule Drives Visitation to Cultural Organizations And Nobody Is Talking About It (DATA)

Examining Schedule- the top influencer for visitation

 Organizations often overlook the single biggest factor influencing attendance. Here’s the data that nobody’s talking about. 

The schedule of a potential visitor plays a leading role in a visitor’s decision to attend a cultural organization, but many organizations don’t think twice about schedule (focusing instead on items such as cost of admission, special events, or the content of a program or exhibit). These items are not unimportant, but the data on the importance of considering audience schedule is unassailable. Want more people to visit? It’s time to understand the leading roles that schedule and hours of operation play in the decision-making process.  

Let’s use data to bust some popular myths about visitor motivations, and take a look at four misunderstood bits of information regarding the role of “schedule” in the visitation decision-making process:

 

1) Schedule is the single biggest factor contributing to visitation (not cost or specific content)

It makes perfect sense: If a visitor-serving organization is not operating when people can or want to visit, then those people aren’t going to visit. In Western Europe, folks are more willing to schedule their work and personal lives around visiting a cultural organization that has a good reputation. (Of course, a shorter work week and more generous vacation time allowances in Western Europe help create more schedule flexibility!) In the United States, that’s just not happening.

IMPACTS- Discretionary decision making utility model A high-propensity visitor is a person who demonstrates the demographic, psychographic, and behavioral attributes that indicate an increased likelihood of visiting a cultural organization. These are the people who are most likely to visit our organizations, and they are “where our bread is buttered” in terms of visitation. People in the United States – including high-propensity visitors – do not generally reorganize their lives in significant ways in order to visit cultural organizations if their operating hours are inconvenient or conflict with work (or school) commitments.

Notice also that schedule is a significantly more important factor in the decision-making process than is cost for high-propensity visitors. Keep in mind that many “minority majorities” and (especially) millennials qualify as high-propensity visitors – and that high-propensity visitors are not necessarily the same as historic visitors. (There seems to be this weird idea that millennials and “minority majorities” are the same as affordable access audiences and are unwilling or unable to support cultural organizations…but there’s abundant data demonstrating that this is not the case – though we do desperately need to get better at attracting these emerging audiences.) The key to meaningful engagement for people who are interested in your content may not be cutting admission by $5 (which data suggest doesn’t work), but, instead, may be establishing hours of operation that better conform to our audience’s preferences.

 

2) Take a close look at when you are open and when audiences are easily available to visit (because they often are not the same)

Take a look at this data from the National Attitudes, Awareness and Usage Study of 98,000 adults and counting. You’ll notice from the last four bars that folks generally do want to visit cultural organizations! You’ll also notice from the first two bars that although folks indicate an interest in visiting, fewer actually do visit. What gives?

IMPACTS - Visitor Attitudes

We dug in a little bit deeper as to why people who report interest in visiting cultural organizations may not actually visit: For people who would like to visit a cultural organization but haven’t visited, schedule conflicts (including ill-suited hours of operation) are the primary barrier. Take a look at how these schedule conflicts stack up:

 IMPACTS - Visitation Barriers

Work schedule conflicts make perfect sense as the leading barrier to visitation for folks who may be otherwise interested in attending an organization. Think about it: Most of the time, cultural organizations with operating hours are generally only operating when people are at work! And some potential visitors have professions that keep them busy working during the weekends as well.

Weekend activities are precious. For potential visitors who do not work on the weekends, there’s steep leisure activity competition – including simply staying home and binge watching Netflix. And when folks can take a holiday (as seen in the data above), there are often other commitments to tend to that take precedent – such as visiting family. Moreover, students tend to be in classes during traditional weekday hours of operation.

When we add all of these things up, it begs the question: How do cultural organizations determine their hours of operation? Do we have these hours because that’s how we’ve always done it? And, knowing what we know about today’s connected, real-time world, would we still choose to be the most inaccessible in the early mornings before folks head to work and in the evening when they have their most discretionary leisure time?

Of course, this issue may require an industry evolution (revolution?) to resolve. We’ve spent years training audiences to visit us during holidays and weekends (a tacit acknowledgment that 9a-6p schedules may suit no one but our staff). Retraining audiences is hard to do…but changing the public perceptions of cultural organizations and better serving our missions may necessitate a good, hard look at how we approach our hours of operation.

 

3) Organizations are unlikely to move visitation to a shoulder season without risking overall attendance

Perhaps the biggest industry misconception about schedule as a motivator for visitation may be that many organizations think that they can change it. This is a difficult – if not impossible task – and more often than not, results in a very poor reallocation of resources.

Take a look at this 10-year analysis of attendance by month to 78 US visitor-serving cultural organizations. The analysis indicates clear “peak” and “off-peak” seasons. This data indicates the time periods when people want to visit cultural organizations (given the current schedules that cultural organizations keep) – clearly illustrated by the fact that these are the times when people are, in fact, actually visiting.

IMPACTS -Monthly attendance to VSOs

The chart below organizes the monthly attendance data by season. The summer season accounts for nearly 37% of total attendance. Also, the spring season, driven by the traditional spring break holiday from school, accounts for approximately 27% of an organization’s total annual attendance.

IMPACTS Seasonal attendance to VSOs

Now that we’ve established that the market obviously has clear seasonal visitation preferences, let’s bust some backward thinking. It is a myth to believe that efforts during off-peak seasons can easily “make up” for poor performance during the peak spring and summer months. Think of it this way: If your organization welcomes 200,000 visitors per year, and 14% of them are visiting in July, an emphasis on increasing attendance during the month of October (when only 6% of visitors historically attend) is not going to produce the total visitation impact as would maximizing peak season attendance. This is especially true in our world of finite resources. Increasing an investment in an off-peak season often means reallocating investments from peak seasons. This alternative use of funds is very unlikely to produce a net benefit for the organization.

Q: What if an organization reallocates some of its resources from peak season to off-peak season? A: It’s not usually a wise financial move. Here’s a case study from my work at IMPACTS that clearly demonstrates the point. Consider the recent example of a large visitor-serving organization (annual attendance >1,000,000) that developed a strategy to increase year-end visitation during the holiday season by reallocating some audience acquisition investments that had been traditionally deployed during the peak season. As a heads-up, this was a relatively modest reallocation of investments and the organization was still investing at a considerable level during the peak season…just not as much as it had in the past. Let’s call this reallocation of resources in an attempt to alter visitation the organization’s “shoulder strategy.”

IMPACTS Shoulder season investment case study

Attendance during the holiday season did improve by 1.17% – but at the expense of attendance during the peak season (which declined by 4.00%). More importantly, a 1.17% increase in attendance during the holiday season only equated to an additional 3,306 visitors…while the 4.00% decrease in peak season performance cost the organization 108,840 visitors. In other words, it proved impossible for the organization to “make up” peak season attendance during an off-peak period by reallocating peak-season resources to the off-peak period. Here’s a look at this information another way.

IMPACTS Shoulder season strategy outcome chart 

There are few meaningful ways to fully compensate for underperformance during a peak season by emphasizing the off-peak season, nor is it likely that a significant investment in the off-peak season will return significant attendance benefits to the organization when compared to the potential of that same investment deployed during a peak season. Schedule is simply too important of a factor to our audiences for them to alter their behaviors to suit our preferences – after all, we don’t define our peak seasons, our audiences do!

Certainly, there are things that an organization can do to try and encourage attendance during less popular months – but don’t rob from peak seasons to pay for an off-peak opportunity. Your organization needs to make its hay when the sun is shining.

When trying to encourage greater visitation during off-peak seasons (hopefully through additional investment rather than taking from peak season resources), remember that discounts artificially increase visitation and change visitation cycles. In fact, discounts do a whole host of not-awesome things for your long-term bottom line. When you discount, you are simply displacing visitation from another season, decreasing visitor satisfaction, devaluing your brand and – perhaps most importantly – decreasing the likelihood of any return visitation at all.

 

4) Attendance loss from unexpected closures is greater than most organizations realize (and it is not generally replaced)

We are often wrong about the impacts of an unforeseen closure for two, big reasons that are important to understand beyond the framework of attendance and revenue projections. When an organization is closed at a time that it might otherwise be open, visitation generally is NOT displaced to other times of the year. And, to top it off, we lose more people than simply those who had planned to attend the organization that day. I wrote a separate post about this earlier this year when snow was hitting the East coast, and it’s worth revisiting here.

Take a look at the math and see just how much we underestimate the lost annual attendance due to unplanned, short-term facility closings. The chart below illustrates data from 13 organizations over a three-year analysis and includes a range of cultural, visitor-serving organizations (each represented by letter). The “Expected Decline” value indicates the number of visitors as a percentage of annual market potential that were expected to be lost by an unforeseen facility closure. If an organization’s market potential analysis suggested attendance of 1,000 visitors on a given Tuesday, and the organization was instead closed that day, then the expected decline in annual market potential would be 1,000. Pretty logical, right? The “Actual Decline” value indicates the actual, observed percentage decline relative to an organization’s annual market potential.

IMPACTS- Immitative value applied analysis

 

 Every organization quantified in the study indicated an actual decline greater than the expected decline. There are two, important reasons why expected and actual decline do not align in commensurate measure.

First, organizations underestimate attendance loss during these days because they do not understand the role that schedule plays in visitation. When people plan to visit an organization, but those plans fall through, visitors are not likely to simply “come back next month.” Those visits are generally lost.

Second, when we close for any reason, we don’t merely lose the people who were going to visit. We lose the recommendations, social media posts, and shared stories of all of the people who were going to visit that day – and the impact of the loss of earned media can be huge. In fact, for every one visit lost due to an unplanned closure, the net annual impact on market potential averages a decline of 1.25 visitors. Thus, if a sustained interruption to your operation results in 20,000 fewer visits, then the annual impact of this business disruption is likely to be lost attendance of 25,000 when compared to your organization’s market potential. Again, you can read more about this here.

To be clear, I’m not suggesting that organizations never have unexpected closures! Things happen for which we cannot always plan – and sometimes situations arise which simply make it unsafe for staff or visitors to make it to our institutions. What I am saying is that we consistently underestimate the “now or not-anytime-soon” nature of schedule as a primary influencer of visitation decisions.

 

Considering the critical role that schedule plays in audience motivations, one would think that we’d talk about our hours of operation at least as often as we discuss our reputations, our special exhibits/programs, and our admission cost. But we don’t. As cultural organizations, we talk a lot about accessibility. However, many of us seem to overlook the most basic foundations of this concept – our schedule and open hours. It’s time to take a hard look at the primary barrier to visitation so that we may more effectively carry out our collective missions of making the world a more educated and inspired place.

 

Like this post? Please check out my YouTube channel for some video fast facts! Here are a few related posts from Know Your Own Bone that you might also enjoy:

 

Interested in getting blog posts, tips, and some social media geekery periodically delivered in your Facebook newsfeed? Like my Facebook page. Or for more regular sharing of nonprofit marketing information, follow me on Twitter.

Posted on by Colleen Dilenschneider in Community Engagement, Financial Solvency, IMPACTS Data, Myth Busting, Nonprofit Marketing, Sector Evolution, Trends 4 Comments

The Simple Reminder that Significantly Increases the Likelihood of a Successful Nonprofit Initiative

Want to increase the chances that your organization’s initiative will inspire action on behalf of your mission? Don’t forget this simple, guiding equation.

As nonprofit cultural organizations, we are constantly asking audiences to act in the interests of our missions. We ask them to do all sorts of things such as pay us a visit, make donations, become members, volunteer, or even take a political stance. Today’s Know Your Own Bone Fast Facts video includes a simple – yet all too often forgotten – tip that significantly increases the chances of success for your organization’s initiatives.

Think about the most successful programs and initiatives that your organization and others have carried out. Chances are, no matter what the goal, the initiatives followed this simple equation: An organization’s goals + market preferences = action.

equation for successful initiiativeIt sounds so simple, right? But too many organizations act as if it’s not an equation at all. Most organizations act as if it is possible to effectively inspire action simply by communicating an organization’s goals. What do we think we are…mind controllers? (Although – hey, ethics and morality aside – a bunch of mission-driven folks with the power to get people to make the world a better place simply by saying so might not be so bad…)

Here are some reminders when considering a new initiative and its likely success:

 

1) Old habits and expectations die hard

Organizations often forget that there’s more to inspiring action beyond simply communicating goals because we are used to simply communicating our own goals! Think about it: In the past, organizations (and the world in general) relied on one-way communication channels such as print media and radio in order to transmit their messages. Traditional media channels allow organizations to talk at audiences, but they do not allow organizations to talk with audiences. Basically, they are big mouths – with no ears or actual way of communicating via the messaging medium at all!

Today’s digital communication channels are more dynamic and they require a shift in leadership mindsets in order to effectively be deployed. These channels now allow organizations to talk with their audiences. Like traditional media, they can have mouths that allow them to “speak” messages outward – but they also have ears to let audiences speak back to organizations on the same channel. Depending on the initiative, communication channels today can even be considered to have arms in that they allow organizations to actively integrate audience engagement into the initiative in real time!

 

2) Digital connectivity increases the need to be relevant

Because we can talk with audiences, we need to be even more relevant in our messaging with regard to considering market preferences. We have no excuse for not knowing our audiences and their preferences today. After all, we are constantly connected to them!

In fact, these dynamic communication channels necessitate that we do consider market preferences. There’s no more excuse for simply “telling” audience members that something is important without considering that the interaction may be more like a conversation than ever before.

On this website, I often write: An organization can declare importance, but the market determines relevance. In other words, sometimes it doesn’t matter how loudly an organization uses its mouth to shout that something is important. If people don’t care about it and if it doesn’t match what they want, then that message is irrelevant.

 

3) Integrating market preferences is a no-brainer

Generally speaking, being aware of your audiences and their wants, needs, and interests – as well as how they prefer to communicate and create connections – is a no-brainer.

Trend data can help your organization spot emerging market preferences – but your organization may spot some of these same trends on its own simply by listening to your audiences. And when these preferences are detected, it’s important (and perfectly sensible) to utilize them in order to inspire connection and engagement. Current market preferences include things like personalization, participation, transparency, and social responsibility. If your organization is thinking about carrying out a new initiative, it will help to consider these items within your organization’s engagement strategy.

Initiatives that are contemplative of what the market wants or needs are more likely to inspire action. It may not sound like rocket science, but it’s a reminder that the world is changing, and that our operations and concepts of “business as usual” must continue to evolve as well.

In many ways, we need our audiences – and the behaviors that we aim to inspire within them – more than they need us. We live in a new world of communication and connectivity – and organizations that consider themselves conversationalists instead of lecturers will stand to benefit from this perspective.

 

Like this post? Please check out my YouTube channel for more fast facts! Here are a few related posts from Know Your Own Bone that you might also enjoy:

 

Interested in getting blog posts, tips, and some silly social media geekery periodically delivered in your Facebook newsfeed? Like my Facebook page. Or for more regular sharing of nonprofit marketing information, follow me on Twitter.

Posted on by Colleen Dilenschneider in Community Engagement, Digital Connectivity, Fast Facts Video, Fundraising, Myth Busting, Nonprofit Marketing, Sector Evolution, Trends Comments Off on The Simple Reminder that Significantly Increases the Likelihood of a Successful Nonprofit Initiative

Which Is More Important for Cultural Organizations: Being Educational or Being Entertaining? (DATA)

From a visitor’s perspective, which is more important for cultural organizations: Being entertaining or being educational? Here’s what the data says.

This week’s Fast Facts video briefly outlines a data-informed aspect of the “Entertainment vs. Education” debate.

There seems to be an ongoing tension within organizations regarding the relationship between providing an entertaining experience and an educational experience for visitors. All too often, we seem to act as though the two forces are at-odds with one another.

Sometimes, the entertainment value of a visit to a cultural organization gets an internal bad rap. After all, cultural organizations are mission-driven and one of their goals is often to educate. “Entertaining” occasionally seems to be a sort of dirty word – much like considering visitors as “customers” and the idea of “selling” admission. They are concepts/words that might make some staffers uncomfortable. In the best interests of the organizations that we love, however, we need to at least embrace these ideas or risk less solvent futures.

The truth is that providing education and entertainment are both important to our visitors – and knowing exactly how these elements contribute to the visitor experience may help inform future strategies and conversations. So, let’s take a look at some data from a visitor perspective and get to the bottom of this relationship.

 

1) Entertainment drives visitor satisfaction and re-visitation

To tackle the question regarding the importance of entertainment versus education, let’s start by considering the data that goes into developing a visitor satisfaction metric.

Individual evaluation criteria – such as entertainment and education values – aren’t weighted equally because the market is not influenced by them equally. Many organizations aiming to achieve higher overall satisfaction measures mistakenly believe that every aspect of a visitor’s experience is equally important – and that’s just not true. To visitors, some criteria (such as employee courtesy) have more weight than others (such as the quality of the gift shop). With that in mind, here’s a look at some of the weighted attributes that influence overall satisfaction – informed by the market and IMPACTS Research. (These data derive from the National Awareness, Attitudes & Usage Study of more than 98,000 US adults concerning visitor-serving organizations.)

IMPACTS Overall satisfaction weight

Yes, folks. This is indeed a data-informed chart of exactly how much each aspect of the visitor experience contributes to overall satisfaction when visiting a cultural organization such as a museum, zoo, aquarium, historic site, performing arts event, etc.

Entertainment experience is the single greatest contributor to overall satisfaction. Education value influences only about 5% of overall satisfaction, whereas entertainment value influences more than 20% of overall satisfaction. Favorability is the visitor’s perception of how “likeable” the organization and its experiences are – and the entertainment quotient of the experience contributes even more to overall satisfaction than does favorability. That’s saying something.

The fact that entertainment value drives visitor satisfaction is cut-and-dry and non-negotiable. And any company or organization telling you otherwise is likely paid by an entity that really, really doesn’t want to evolve. Providing an entertaining experience is absolutely critical for visitor satisfaction, and, thus, return visitation. In short, cultural organizations need to be at least somewhat entertaining in order to stay alive.

 

2) Education justifies visitation

It’s clear that providing an entertaining experience is more important for satisfying visitors – but education isn’t chopped liver. Data suggest that being educational plays a critical role in justifying a visit to a cultural organization after the visit is over.

Take a look at this data from IMPACTS (again, from the National Awareness, Attitudes & Usage Study):

IMPACTS Primary visit purpose

Learning something new and different, seeing something new and different, and wanting a child to learn something new and different are the top three stated responses regarding the primary purpose of a visit after that visit is over. This is a big deal, because it means that while the educational aspect of an organization’s mission may not necessarily bear extraordinary influence on how satisfied a visitor is during their onsite visit, it is thereafter recalled as a primary factor motivating the visit – and this is good news! It helps to reinforce the purpose of cultural organizations externally, underscoring our drive for social good. (And this has financial benefits, too. Organizations that highlight their mission financially outperform those marketing primarily as attractions!)

 

In sum, entertainment value makes a visit satisfying but education value helps justifies a visit. Successful organizations aim to make education entertaining. It’s not a battle, but a balancing act wherein fun and learning work hand-in-hand to make both visitors and the organization better.

I could have guessed that,” many of you may be saying. Well, that’s good. Now when we enter conversations from either the mission or revenue angle, we can be a bit more informed by visitor-driven, industry-wide data. There may be some hard facts to face here, but they are important: We need to prioritize being both educating and educational – and quit thinking of “entertainment” as a dirty word.

 

Like this post? Please check out my YouTube channel for more fast facts! Here are a few related posts from Know Your Own Bone that you might also enjoy:

 

Interested in getting blog posts, tips, and some silly social media geekery periodically delivered in your Facebook newsfeed? Like my Facebook page. Or for more regular sharing of nonprofit marketing information, follow me on Twitter.

Posted on by Colleen Dilenschneider in Community Engagement, Fast Facts Video, Financial Solvency, IMPACTS Data, Myth Busting, Sector Evolution, Trends 3 Comments

The Expensive Misconceptions Surrounding Membership Fraud for Cultural Organizations (DATA)

The Expensive Misconceptions Surrounding Membership Fraud for Cultural Organizations

Setting up ID checkpoints to spot “fake members” at your organization? Data suggest that you may be doing more harm than good.

Many cultural organizations treat “member fraud” as an urgent concern of the utmost importance. I’m talking about organizations that set up ID checkpoints at the entrance or membership deck and believe that their job is to find people getting in on their friend’s membership, and then do this. Data suggest that organizations that think this way may be doing themselves a grave disservice.

How big of a problem is membership fraud and guest pass fraud? How much is it costing organizations? We uncovered a data-informed line of reasoning that should make cultural organizations think twice before deploying the member fraud police (at least in the way that many have in the past).

 

1) Checking IDs is a top dissatisfier for members

This is a good – and obvious – place to start: What are the most dissatisfying elements of the member experience? IMPACTS surveyed premium members (defined as persons who have purchased an annual membership to a cultural organization costing $250 or more within the past 12 months) to better understand the nature and hierarchy of member “dissatisfiers.”

The data comes from the ongoing National Awareness, Attitudes & Usage Study of US Visitor-Serving Organizations, and contemplates the perceptions and behaviors of more than 98,000 visitors to 224 visitor-serving organizations of various types and sizes. For this component of the analysis, 1,096 “premium” members to these organizations responded to open-ended questions to identify the most dissatisfying aspect of their member experience. A consequent lexical analysis process organized these responses by general consideration, and these same considerations were presented to the studied members who were then asked to rank from 1-10 the considerations in terms of relative dissatisfaction (with 1 being the most dissatisfying aspect and 10 being the least dissatisfying aspect). The Mean Value is the average ranking that the member respondents assigned to each consideration.

IMPACTS- Premium member dissatisfiers

It makes sense that “proving identity” is among the most dissatisfying aspects of the member experience: “You know my name when you call me at home to ask for money. But you forget my name AND imply that I am trying to deceive you when I visit – a benefit for which I paid several times more than regular admission!” Exaggerated? Maybe (or maybe not), but let’s be honest: A premium member making this hypothetical statement would have an excellent point!

A reasonable person may consider showing a membership card and being asked to produce an ID to be excessive. And consider this: You’re openly asking for an ID in addition to the membership card because you believe that your members – the backbone of your organization – are conspiring to perpetrate a fraud against your organization. One need not be a philanthropy pro to realize that this is a pretty lousy way to treat current and potential donors. You know what they say in fundraising and membership development: “The best way to say ‘Thank you’ is to question a donor’s integrity!” Wait…people don’t say that?! Then why do so many organizations actually do it?

 

2) It is often more costly to AVOID membership fraud

“But if we stop checking IDs, won’t we suffer from member fraud and risk letting legions of non-members in for free?!” That’s a very sensible and intelligent question. Let’s look into it. The data below is from a 2014 IMPACTS membership study of 11 visitor-serving cultural organizations – seven of which have (or then had) ID check policies for members, four of which did not verify the IDs of members.

Market potential is a data-driven analysis that quantifies the number of people expected to annually visit an organization (and often at what price). Market potential analyses are the result of a modeling process, and enabled by the data typically acquired via the conduct of an awareness, attitudes, and usage study. The 2014 IMPACTS membership study further segmented the market potential by visitation type (e.g. admission paying visitors, members, etc.).

IMPACT - Membership ID validation market potential

Organizations checking IDs achieved 98.9% of their annual market potential (or 98,900 actual member visits per every 100,000 expected member visits). Organizations NOT checking IDs achieved 100.8% of their annual market potential (or, 100,800 actual member visits per every 100,000 expected member visits). Even if we attribute the entire member visit variance to member fraud (which is not a justified assumption), the maximum member fraud incident rate is 1.9% (or 1,900 fraudulent member visits per 100,000 expected member visits).

And, common sense suggests that attributing the entire variance to member fraud is, at best, a dubious practice. Why? Because at least two other, important factors may play important roles in explaining the delta: 1) It is extremely possible (if not likely) that some ID-checking organizations lose member visitation precisely because they check IDs and, as the data indicate, are dissatisfying their members. It is not hard to imagine a member being annoyed, offended, or inconvenienced by the ID check (or having a friend to whom they lent the membership card being turned away), and then not returning with the expected frequency to the organization. 2) Correspondingly, organizations that don’t check IDs may better satisfy their members with the relative ease of the entry process when compared to the ID police experience at other organizations. It is unlikely that the entire observed market potential variance has to do with member fraud when we know that checking IDs is such a strong dissatisfier, but let’s assume that the member fraud incident rate is 1.9% to be super safe. This begs the question:

Is a member fraud rate of 1.9% worth irritating your most closely held constituencies?

To find out how much money this amounts to for your organization, all that you need to do is plug in some numbers. As an (easy math) example, let’s assume that an organization receives 100,000 annual member visits and that the admission revenue per capita is $20. This would mean that member “fraud” poses a $38,000 annual risk to the organization (100,000 annual member visits x $20 admission per capita x 1.9% member fraud incident rate = $38,000 annual member fraud expectation).

(For easy math purposes, I chose a relatively large-sized organization for this hypothetical example. Extant data suggests that a visitor-serving cultural organization in the US with 100,000 member visits likely has a total annual attendance in the 400-500,000 range. The annual operating budget of this hypothetical organization is likely in the tens of millions of dollars – which may change the way you perceive that $38,000 if your organization is much smaller.)

Based on your own unique member fraud expectation, ask yourself: Is it worth this much money to risk alienating high-level donors and members? Or, here’s a better question: If you could invest that same amount to eliminate a major dissatisfier for members and donors, would you? The answer is probably a resounding “yes.”

 Also, when organizations use the word “fraud” they are making the assumption that everyone who is sneaking in using someone else’s ID would have otherwise opted to visit and pay full admission. These are flawed assumptions.  Sure – perhaps some of these “gate crashers” would have otherwise visited…but surely not all of them would choose to do so.  Some may argue that what we internally call “fraud” is, in fact, a bit like a trial program based on the most valuable kind of word of mouth – the recommendation of someone who is already an important constituent (i.e. the member who shared their ID with the “fraudulent” user).

Even if we assume that every single fraudulent visitor would have absolutely visited anyway and paid full price (which are both silly and dangerous assumptions…but let’s roll with them), checking IDs is still a bad financial practice. Organizations should consider the ill will that ID checks engender with their members (and what this means come renewal time), the onsite spending of “fraudulent” visitors at the gift shop and café, and the future value of these same visitors as potential endorsers! It may be reasonably safe to say that someone turned away at the door by the ID police may not offer a ringing endorsement for your organization. On the other hand, a person who visits at the express recommendation of a member who has shared one of their member benefits with this person may well thereafter visit on their own accord…and maybe even buy their own membership!

 

3) Guest pass fraud has been pre-paid and may be beneficial

But what about guest pass fraud? Many organizations report observing guest passes being offered for sale on Craigslist or offered as a perk for Airbnb rentals. Just how big of a problem is this?

The analysis below contemplates five nonprofit visitor-serving organizations in the US that offer transferable guest cards, tickets, or passes (i.e. the member need not be present for the guest pass to be redeemed) as a benefit of select membership categories. The purpose of the study was to assess if fraud was a major issue with this membership benefit. Here are some of the findings uncovered by IMPACTS:

  • People purchasing membership that included guest passes as a benefit spent on average $48 more than they would have for a similar membership category that did not include guest passes. The average premium paid by members of the five contemplated organizations to receive the guest pass benefit was $48.17.

 

  • Roughly four out of ten members who paid a premium to receive the guest cards didn’t redeem the benefit. 61.35% of eligible members who received the guest benefit actually redeemed the benefit.

 

  • People visiting using guest passes were worth 48.77% more to the organization then they would have been if they had bought a ticket. Explanation: Members who redeemed the guest pass benefit (i.e. shared passes for their guests to use), accounted for an average of 2.32 guest visits to the organization. In other words, of the 61.35% of eligible members who redeemed the benefit, the average usage rate per member was 2.32x. That means that overall, for every membership that included a guest pass as a benefit, actual usage of the guest pass accounted for 1.42 guest visits (61.35% redemption rate x 2.32 usage rate = 1.42 guest visits per eligible membership). At a price premium of $48.17, this equates to equivalent revenues of $33.92 per guest visit ($48.17 price premium / 1.42 guest visits per eligible membership = $33.92 per guest visit). The average per capita admission revenue for the five contemplated organizations was $22.80 – meaning that guest visitors were worth 48.77% more to the organization then they would have been if they had bought a ticket!

 

That said, guest pass visitors are likely worth even more than that. This math artificially demeans the value of guest pass programs as it includes the same, flawed assumptions that seem to plague many member fraud-related concerns: 1) The assumption that every person visiting the organization via the guest pass program would have otherwise visited the organization; and 2) The assumption that every person visiting the organization via the guest pass program would have not only visited but additionally done so on a paid basis. There are two critical factors to consider in assessing the value of a guest pass benefit for memberships:

  1. The people who choose to pay a premium to receive a guest pass benefit are likely among an organization’s best endorsers – they want to share the experience with other people and are willing to pay for it!
  1. If the guest pass program does nothing more than engender trial among new visitors, then this, alone, may be a benefit to the organization – organizations usually invest to engender trial. In the example of guest passes, a member is paying the organization to promote trial (and, these “trialers” likely contribute revenues to the organizations in terms of food and beverage sales, retail sales, parking (if you own that structure), and even potential additional admissions sold to accompanying visitors.)

Do guest cards contribute to fraud? It depends what you mean by “fraud.” Yes, there are likely folks visiting the organization that you didn’t intend to have a guest pass – but that’s not necessarily a bad thing. In fact, when you think about it from a trial perspective (i.e. reaching new audiences), it may be a good thing.

 

I was recently visiting a large museum in Chicago with my colleagues. The woman in front of us at the entrance had several children with her and, before entering the organization, the ticket-taker asked to see her identification. We overheard the woman explain that she was the nanny and that she was given the membership card to take the children and their cousin to the museum. The ticket-taker turned the nanny and three children away with a look of pride and accomplishment on her face as she explained condescendingly that only the membership holder could visit the organization with the children. The nanny looked extremely embarrassed. Is this what we consider a “win” in the visitor-serving industry?

“That’s extreme,” you may be thinking. Perhaps. But, remember: The person whom you’re turning away is the member’s mother, father, neighbor, nanny, grandparent, sister, brother, coworker, etc. (Believe it or not, folks trying to “sneak in” aren’t likely to be culturally erudite pickpockets and wallet thieves. Seriously. Is that who we think that they are?!) When you annoy members (or embarrass their friends), you’re probably more likely to lose them altogether than upgrade them to a membership that allows for more member entrances or guest passes. In a way, members (and especially premium members) have paid for the right to “defraud” us.

If you’re wondering what your “ID police” should do now, here is an idea: Train them to interact with visitors – which data suggest is the single most reliable way to increase satisfaction.

The member fraud crisis? It’s kind of a (mild) thing – but we’re hurting ourselves both in terms of our mission and financial future thinking it’s a bigger issue than it actually is. The sooner that we stop choosing to dissatisfy our members, the sooner that we can improve our member and donor relations to gain the critical support that we need to both fund our financial futures and execute our missions.

 

Like this post? Don’t forget to check out my Fast Fact videos on my YouTube channel. Here are a few related posts from Know Your Own Bone that you might also enjoy:

 

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Posted on by Colleen Dilenschneider in Community Engagement, Financial Solvency, IMPACTS Data, Myth Busting, Sector Evolution 1 Comment