Special Exhibits vs. Permanent Collections (DATA)

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

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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

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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

Finding: Museums That Highlight Mission Financially Outperform Museums That Market Primarily as Attractions (DATA)

seafood watch

This article kicks off a four-part series intended to help visitor-serving organizations understand and respond to emerging trends that will impact their ability to achieve their financial and mission-related goals. Learn more about the series here. 

Data suggest a “new” draw to your organization that is now key to engaging both visitation and donor support. Well, actually, it’s not “new” – it’s the reason why your organization exists: Your mission. How credibly the market perceives your organization in terms of your ability to effectively deliver on your mission has a very strong positive correlation with your organization’s financial performance.

An analysis of the recent financial performance of a large and representative number of visitor-serving organizations coupled with the public perceptions of these same organizations reveals an outcome that may not be surprising for those who keep tabs on consumer behaviors: Organizations perceived as “best-in-class” in terms of mission delivery reliably outperform organizations that rely more on their reputations as “attractions” when it comes to their financial bottom lines.  In other words, mission and business are not in conflict – being superlative at your mission is good business!

There are three overall findings relating to the “mission is good business” trend:

1) Organizations perceived as more credible actors in terms of fulfilling their mission financially outperform peer organizations whose reputational equities relate primarily to their roles as attractions

IMPACTS collects and analyzes attitudinal and awareness data for 224 visitor-serving organizations in the US (and that may even include your own). This data and analysis informs the development of key performance indicators that reveal trends and correlations affecting visitor-serving enterprise.  The charts below indicate the relationship between 35 visitor-serving organizations’ financial performance in terms of “revenue efficiency” coupled with the market’s perception of these same organizations’ “reputational equities.”  (In the interest of maintaining appropriate confidences, I’ve “anonymized” the findings)

First, a few quick definitions (with advance apologies for the analytical jargon):

Revenue Efficiency: A composite metric contemplative of onsite-related earned and contributed revenues (e.g. admission, contributions, grants, membership, programs) contemplated relative to the cost to deliver onsite services (i.e. operating expenses) and the number of persons served onsite.  Generally, a more “revenue efficient” organization exhibits more favorable financial key performance indicators (e.g. greater revenues, greater net operating surplus) and reduced financial volatility than does a less revenue efficient organization.  Data informing the IMPACTS revenue efficiency calculation are commonly available in an organization’s financial statements, annual reports, and Form 990 filings.

Reputational Equities: A composite metric contemplative of numerous visitor perceptions such as reputation, trust, authority, credibility, and satisfaction that collectively indicate the market’s opinion of an organization’s relative efficacy in delivering its mission.  As mentioned previously, IMPACTS collects perceptual data from 224 visitor-serving organizations in the US to inform its reputational equities calculation.

KYOB aquariums reputation and revenue

Aquariums are a good place to start because (a) in addition to tackling the mission of inspiring audiences, they are also increasingly engaging audiences on broader conservation issues; and (b) aquariums tend to be more reliant on earned revenues than their museum and zoo brethren who may have greater public funding and/or endowment support. In short, absent the safety net of large endowments and government appropriations, aquariums are among the most market-driven businesses in the nonprofit sector, and translating positive reputational equities has an enormous financial benefit for these organizations (and, in inverse, lessened reputational perceptions bear tremendous risk to an organization’s bottom line).

Generally, revenue efficiency follows reputational equities (so working to increase reputational equities tends to positively affect revenue efficiency). Thus, we can reasonably surmise that year 2014 may bring continued challenges for Aquariums H, I, K and L should they choose not to prioritize remedy for their lacking perceptions as credible actors when it comes to delivering on their missions.

KYOB zoos reputation and revenues

Much like aquariums, the zoos that are perceived as credible actors in regard to their mission achieve the greatest revenue efficiency. Again, in the example indicated by the assessed zoos, the relationship between reputational equities as a predictor of financial success is clear and compelling.

KYOB museums reputation and revenues

Again, when segmented by museums (in the above example, all of the assessed organizations would be rightfully classified as either “art” or “natural history” museums), the trend holds true: Those museums perceived by the market as the most esteemed in terms of fulfilling the promise of their missions achieve the greatest financial performance.

You’ll notice that out of the 35 organizations represented in this assessment, Museum H is the only organization that does not indicate the relationship between reputational equities and financial performance – and, even in this exception to the trend, the difference is very slight.

 

2) Your organization must increasingly be MORE THAN an attraction but it still must be an entertaining destination.

The reputational equity metric is contemplative of overall satisfaction and data indicate that providing an entertaining experience is an extremely important component of visitor satisfaction. To be clear: The data do not support abandoning efforts to deliver an entertaining experience in the hopes of enhancing your organization’s reputation as a credible, mission-related authority. Instead, data support efforts to underscore your social mission and demonstrate topic expertise alongside location-based content to help drive visitation and provide insight into the entertaining and inspiring experiences that you provide.

Simply put, people want to visit organizations that are more than just attractions.

 

3) The importance of underscoring reputational equities is likely to grow as millennials increasingly comprise a greater percentage of museum audiences

The analysis indicating the relationship between favorable reputational equities and financial performance for visitor-serving organizations aligns with multiple findings concerning the influence of social missions (in business-speak, think “corporate social responsibility”) on consumer purchasing behaviors. Namely, people – and especially millennials – are more likely to purchase products that support a mission.

The data has long suggested that millennials are particularly public-service motivated, and as Gen Y has become a more powerful market segment (indeed, millennials are the largest generation in human history), organizations have experienced a “market shift” in support of organizations that support “social good.”

That sounds great for educational, conservation, and cultural organizations such as museums, aquariums, and zoos, right? Well…maybe not…especially because millennials are generally sector agnostic. Millennials tend to support organizations and businesses that appeal to them regardless of whether or not there is 501(c)3 designation involved. (In other words, while the IRS may care about your tax-exempt status, the market increasingly does not!) This means that in terms of securing support, many nonprofits are “competing” directly with for-profits for the market’s time, attention, and resources.

Organizations that have marketed themselves too heavily as attractions without underscoring their mission and social impact have lost a valuable opportunity to differentiate themselves as superlative to a critical demographic. Potentially worse yet, they may have built their reputations based on motivations that millennials don’t care about. Case-in-point: Take a look at what millennials want out of a zoo, aquarium, or museum membership compared to older generations.

Organizations that the market favorably perceives as more than “just an attraction” tend to financially outperform organizations perceived primarily as attractions.  Money follows reputational equities. Zoos, aquariums, and museums that have been trying to “sell” the wrong brand attributes may find themselves struggling even more in the future as emerging audiences emphasize mission and social impact as vital attributes of the relationship that they seek with the organizations that they support.  Year 2013 was only the tip of the iceberg. Perceptions are changing and the data affirms a strong, encouraging trend:

Finally, it’s cool to be kind.  More than that, it’s plain good business.

National Aquarium cleaning debris

National Aquarium

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