I’d like to dispel a few myths… Marketing is not placing an ad in a newspaper, it’s not writing a press release, it’s not having nice photos taken, it’s not creating a Facebook page, and it’s not distributing flyers to those on your mailing list.


The single most important task you can undertake whilst running a theatre company is getting your marketing right. Staging a quality production with a great cast and an 'award-winning' production team is all-important, but if nobody is there to see your masterpiece, not only does your hard work go unnoticed, but your company could be heading for some serious financial trouble.
 

With increasing pressure on budgets, due largely to the reliance on professional services (sound, lighting, production, etc.) within the Community/Amateur/Non-professional (CAN) ranks, I’ve always wondered why very few companies invest in qualified marketers to run this pivotal aspect of their business. This not only applies to CANs… the professional world is often guilty of this, too.


I’d like to dispel a few myths… Marketing is not placing an ad in a newspaper, it’s not writing a press release, it’s not having nice photos taken, it’s not creating a Facebook page, and it’s not distributing flyers to those on your mailing list. "What? It’s not?" I hear you say.


Marketing is: The management process responsible for identifying, anticipating, and satisfying customer requirements profitably. So many excellent points made in that one sentence it makes me tingle! The other marketing activities I mentioned above (press releases, flyers, etc.) are all tactical marketing, they are not strategic marketing. They are the output, the method for delivering a message about a product; they are not the product itself. Let’s break down the above statement…


The management process: Marketing is methodical. It takes into consideration a range of factors and it weighs them up against each other. It is not knee-jerk, it doesn’t argue, and it doesn’t ever, ever change. It is a fixed set of rules that govern a decision making process. It looks at everything objectively and it always asks “What if?” It puts all the ideas into a big bucket, swirls them around, and then one by one spits each one out until the most practical idea remains. The management of a process. Anyone running a marketing department should take into consideration strategy, planning, delivery, and measurement. These four key pillars are paramount to marketing success.


Satisfying customer requirements: Go right back to the basics and ask yourself – “Why does my company exist?” There are many answers to this question, but only one of them is right: to fill the need of the customer. If your customers don’t have the need because they are being satisfied elsewhere then you are in trouble before you’ve even begun. Look at what’s around you – what are you competing with? Is there really a need for your company or is someone else doing a pretty good job of it in your area already? Simply replicating the competition is not a good strategy to win market share. If the customer can’t tell the difference between you and your competitor, then you are in big trouble. You have to be unique and, more so, you need to be the right kind of unique. You can’t just assume what your customers (or potential customers want) – you have to ask them.


Identifying, anticipating, and satisfying customer requirements: The only way to accurately assess your customer’s buying habits is to undertake market research. Many shows are chosen based on a 'gut hunch,' the committee’s personal taste, or availability. Most choices are knee-jerk reactions, rather than planned out, well-researched choices. For example, Miss Saigon is suddenly now available so many companies scramble to stage it in spite of their capability to actually pull it off, or, perhaps more importantly, the desire of their audience to see it. Look at how your audience has developed (or potentially will develop if you are just starting out). If you’ve weaned them on Rodgers and Hammerstein shows for the past three years, then perhaps RENT is not the best choice for you right now. You can get to RENT, but you’ll need to transition your audience over several genres to get to a modern programme. Market research takes a little leg work, but, with all the online tools we have at our fingertips, execution is simple. I ran a survey over the Christmas break for Theatre People. It provided an excellent insight into our readers and we’ve since made several massive changes as a result (some you’ve seen already… some yet to come).


Satisfying customer requirements profitably: You also need to consider the profitability of your customers. This point can be hard for people to get their heads around because, by definition, isn’t every customer who buys a ticket profitable? Well to put it simply… no. If your production costs outweigh your sales then you’ll eventually close your doors. Sounds like a simple mistake to make, but many companies have gone under by painting themselves into this corner. The last thing a struggling company wants to do is increase their prices. They are understandably scared that a price increase will drive their audience away, but the reality is that if you are not able to attract larger numbers (sales), then you need to extract more money out of the audience you already have. Again, this comes down to research. Many people who frequent your company actually may actually pay more that you are currently charging, but, without surveying them, you’d never know.


Some CANs are charging up to $45 a ticket. Why? There are a number of reasons:


1: They are positioned in a demographic that can afford it (let’s say St Kilda).
2: They have high production costs, so, in order to break even or maintain a profit they have to charge more per ticket.
3: They have an established customer base who are willing to pay more for a consistently high quality product

If your company resides in a lower socioeconomic demographic (say Broadmeadows) then you may not be able to charge $45 because your market may not be able to afford it, but it doesn’t mean you are going to be less profitable.

What?? How does that work out? The St Kilda CAN charges more, so they must be more profitable… right? Wrong.


Take the St Kilda CAN – at $45 ticket. The St Kilda theatre is big (say 800 seats) and it’s in high demand as it’s booked by a lot of other companies, so the theatre can charge more and are perhaps less willing to negotiate on rates because they are in high demand. The theatre is also old, so the company has to bring in a lot of extra equipment and bump in takes longer as a result. This is factored into the tech. cost. And let’s not forget the fact that the more affluent the audience, the higher the expectation. Being so close to the city, a lot of their audience go to professional shows frequently and they can tell a good one from a bad one, so they want to see all the bells and whistles that go with a big scale show. This only adds to the cost. At $45 a ticket, the audience is giving up an opportunity to see Rock Of Ages or another professional show that’s nearing the end of its season and is offering heavily discounted tickets at, say, $55, so again… the expectation is very high.


To maintain the standard of their previous shows the overall budget is just shy of $200,000. Let’s assume the ticket sales are above average and the show sells 80% for a season of 12 shows (4 per week). Total sales $345,600. Less production costs ($200,000) = a profit of $145,600.


Now… our Broady company has a new theatre that’s been built with the best in modern equipment. It seats slightly less (500) but the theatre cost is far cheaper and the cost is subsidised by the local council, who are keen to build the cultural profile of the area. As demand for the venue is not as high as the St Kilda venue, a four week contract is negotiated for the price of a three week period. Over the run, they can seat roughly the same number of people at a fraction of the cost. The local community have less opportunity to see professional productions, so they may have a lower expectation on quality. As there is very little theatre staged in the area, the company competes with fewer outside attractions.


The overall production cost is just $60,000. If tickets are sold at $35 each, and an 80% capacity is achieved for a season of 16 shows (remember – they got an extra week for free), that’s a whopping profit of $164,000!


As you can see, by taking a strategic approach to the fundamentals of marketing (product and price), you can yield much better results on your tactical marketing efforts (e.g. your flyers, brochures, website, and press releases). So to sum it all up, make sure you are delivering the right product to the right market at the right price.


Next week, we take a look at some of the tactical marketing tactics you can employ to boost ticket sales and improve your brand awareness.


Chris Hughes has worked in the marketing industry for the past twelve years. He’s been a professional theatre producer, marketer, and publicist, and is a founding partner of Theatre People. Chris currently works as the Head of Contracting for a specialist marketing recruitment agency, servicing major blue chip organisations like Sensis, National Australia Bank, and BP.

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