$3 million two-year revenue growth

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The Scenario:

For years Arts Club Theatre Company (ACTC) had seen healthy revenue growth. By 2007 subscription numbers had leveled off and the company’s efforts were falling short of revenue goals. Some of the issues included:

• Pricing.  ACTC had priced all seats the same, varying prices only by the day of the week.   Patrons were not buying the lowest-priced tickets, prompting a high proportion of tickets—one in every three—to be offered at a discount.  Some patrons got double discounts (i.e. corporate seniors got a corporate discount on top of the senior discount).

• Inventory management. In addition to offering deep discounts on tickets, ACTC filled seats by offering large numbers of complimentary tickets—22,000 in the 07-08 season alone...

• Timing of marketing campaigns. ACTC had a complaint that is standard among arts organizations—their patrons were buying later and later. To accommodate them, ACTC was also marketing and selling shows later and later.

• Subscription offerings. ACTC offered a wide variety of subscriptions—several fixed seat subscriptions, and many flexible subscription packages. Many more patrons opted for the lowest-price flex package rather than the full series; flex series renewed at low rates.
  
  

The results:

After two years working with TRG, ACTC saw the following results:

• 16% increase in per-capita ticket revenue

• 33% increase in fixed seat, full season subscription packages

• $3 million two-year revenue growth—an increase of nearly 70%
  
  

How did ACTC do it?

Embraced change.

Once TRG had identified the areas where ACTC could increase their revenue, both companies set to work. TRG guided priority recommendations and ACTC made an institution-wide commitment to change.  When the Company changed their focus and way of cultivating patrons, patrons responded in positive ways such as buying earlier and choosing larger subscription packages.

Demand rules.

To address pricing, TRG counseled a re-scale of ACTC’s theatres and devised demand-based pricing strategies.  The primary basis for price became patron demand for the seating section and the specific performance.   ACTC cut back on discounts and stopped the practice of offering multiple discounts. The Company also implemented dynamic pricing, which increased total single ticket revenue by 10%.  Integrated pricing strategies resulted in a 16% increase in per-capita ticket revenue—nearly $5 a ticket.

Reduced comps.

The greater the number of complimentary tickets that is readily available in a market place, the less incentive patrons have to buy—at any price. ACTC cut comp tickets by 32% in two years, recouping an important strategic market perception as well as creating greater incentive to buy.

Earlier campaign launch.

ACTC broke the late-buying cycle by putting its productions on sale months earlier than had been their practice. ACTC been seen 25-40% of ticket revenue walk-up during the run of a production, relying on comps and discounting late in the sales cycle to fill empty seats. When the Company launched sales for its holiday production, White Christmas, months in advance, the production sold out before it opened.

Unrelenting focus on full, renewable subscription series.

ACTC cut back on the number of subscription options it offered and pointed subscribers toward the series that offered the best patron value— fixed seat, full season packages. This led to a 33% increase in the 5- and 6-play main series—a significantly improved foundation of loyal, sustaining patronage for ACTC.

About ACTC:

A TRG client since 2008, Vancouver’s Arts Club Theatre Company is the largest theatre company in Western Canada, producing some 16 productions a year at three venues. For two perspectives on the ACTC success story, tune in to a recorded webinar featuring ACTC Executive Director Howard Jang or read TRG CEO Rick Lester’s blog post.