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The importance of having a CRM Strategy

 

With the continuing reduction and uncertainty in arts funding, most arts organisations have to achieve more with less. We all have to work harder to prove that what we are doing is effective so having a Customer Relationship Management (CRM) strategy in place is becoming ever more urgent.

CRM isn’t about selling, it’s about marketing. It helps you build and maintain long-term relationships, through discovering how your audiences want to interact with you, and actively meeting their stated and unstated wants and needs.

So, if it is such a good idea, why is CRM not practised more widely? Partly because it takes hard work and the day to day tactical necessities of selling tickets and filling seats always takes priority. But today’s multi-channel environment means that there are a whole host of ways to talk to potential customers, and that, coupled with increased competition for people’s time and today’s economic climate, make it imperative for us to work smarter, listen and be more responsive. The days of pushing out a standard direct mail letter or email to all our customers are gone.

In 2016 Shakespeare’s Globe recognised that they needed a deeper understanding of what motivates, frames and influences the buying, engaging and supporting behaviour of their different audience segments.  They had the aim to maximise the opportunities for all areas of their business – including theatre, education, commercial and development.  That’s when I was commissioned to work with them to build an audience-focused CRM strategy that is reinvigorating the way they work and interact with their diverse audiences.

The Globe needed a CRM system to enable them to better manage and analyse audience data across departments and an insightful segmentation system that would give them the understanding required to develop and maximise their audience relationships.

Finding the right technological solution to provide the CRM/ticketing system needed was a key factor for the Globe in achieving a successful CRM Strategy.  The box office system is your organisation’s most powerful CRM tool, it contains every ‘touch-point’. Underdevelopment of that data means that only the most loyal customers are contacted; the task should be to persuade the wary to come and to come more often.

The process began with a series of intensive information gathering sessions with staff across the organisation (including the CEO) which proved to be revelatory; highlighting the historic silo working and its effect on progress, the multiplicity of ‘data’ systems, a need to review practices and processes. Armed with this insight, developing a specification outlining the kind of CRM system functionality needed was made so much easier.

Confident with their choice of CRM system, implementation was the next stage. Discovery sessions involving the Globe, the new system supplier (Tessitura) and HD Consulting brought about in-depth customer journey mapping which showed just how each customer group interacts with the Globe across multiple touch-points, identifying where it was easy to interact and where was it difficult and convoluted.  As a result, the CRM system and website are being configured to eliminate those pain-points.

But technology (no matter how good) and data mining are worthless without a deeper understanding of the audience’s motivations and values.  Through a process of in-depth research with the Globe’s audiences by Morris Hargreaves McIntyre they gained rich and invaluable insight into their audiences enabling them to differentiate their customer segments, and understand and agree behaviours using their Culture Segments segmentation.  They now have a three segment focussed strategy that will allow them to grow audiences and engage them better.

A key factor in the success of The Globe’s project is that they have embraced CRM by ensuring that it is a strategic function.  They have created a core CRM team with representatives from different departments where colleagues’ needs and concerns are addressed.  A training policy and data policy are being created to show staff teams the value of adopting and applying the strategic initiatives, and in setting an organisational ‘rule book’ or benchmark to work to.   CRM was never seen as a tactic or marketing function and The Globe’s leadership team were on board from the start – clear about both the end game and the cultural change that would be needed.

This is still a work in progress. They know it won’t be a quick win but will ultimately be a new (better) way of connecting with their audiences.

This process is not for the faint hearted but for arts organisations that want to look to the future.

It requires a fundamental change to the way strategies are planned, budgeted, communicated and monitored.

So if theatres really do want to develop an effective CRM strategy don’t forget:

  1. 1. CRM isn’t CRM unless it affects the customer experience.
  2. 2. CRM is a strategy not a project.
  3. 3. CRM should improve return on investment.
  4. 4. Technology is a means not an end.
  5. 5. A 360-degree view of your customer

©Helen Dunnett

www.hd-consulting.co.uk

Cart Before Horse for CRM?

‘Cart before the Horse’ Syndrome Prevails!

I’m constantly surprised by how many organisations, when thinking and talking about CRM (Customer Relationship Management) and their CRM Strategy focus on the IT implementation that is the customer database technology.  True it’s important but if technology is applied to a faulty business strategy all that will happen is the organisation becomes more efficient at doing the wrong things!   The main goal is to have a 360° view of your customer because CRM is a strategy not a process, tactic or just a marketing function.

Keep these 5 things in mind and you can’t go far wrong:

  • CRM isn’t CRM unless it affects the customer’s experience
  • CRM is a strategy, not a project
  • CRM should improve ROI
  • Technology is a means, not an end
  • You want a 360 degree view of your customer

That said IT and/or software are vital to its success. CRM software collects data on consumers and their transactions.  And the point of a system is to find a repository to hold your valuable data on your customers and stakeholders. Key to this is centralising your data and business operations so that it’s all in one place, making sure that it’s relevant and contacts are still ‘live’ and being talked to by you.

And here are the steps you might take in your CRM Strategy, notice that Get the Right System for your Organisation is right at the bottom of the list – that’s not about importance but the journey:

 

Understand your customers and customer journeys

You must have a clear vision of what good CRM looks like across the organisation, including understanding customer journeys. A customer journey is how your customer interacts with your organisation across multiple touch-points, such as purchasing a ticket, attending an event, and providing feedback. Align your internal business processes with these journeys and it will help you determine if you’re easy or difficult to do business with.

 

Differentiate your customer segments, and understand and agree behaviours, whether you segment by high value, frequency of attendance, potential attendance, participation, etc.

 

Create communication and implementation plan

Create a communication plan to allow you to share actionable items within the strategy, and progress charts that show what has been implemented and where. Create an implementation plan, and include a feedback loop that allows everyone to highlight problems with implementation or execution. Ideally, with clear leadership in place most senior managers will have responsibility for managing CRM strategy at an operational level.

 

Be a customer focussed organisation

Your organisational culture needs to be ready to adopt a customer-centric approach. Set up a CRM team with representatives from each department or area so that colleagues’ needs and concerns are addressed. Consider creating an education programme for the entire staff, including third parties who may have involvement in interactions with the organisation’s customers. Put in place clear measures that show everyone the value of adopting and applying the strategic initiatives and don’t forget to celebrate excellence when it is achieved. You will know when you are at a point of excellence by setting KPIs at the outset.

 

Tidy up your data

Customer data is a critically important part of any CRM project, so it is important to ensure your data management is in good shape before strategy building begins in earnest.

 

Remember, the old adage: garbage in, garbage out.  Without having data on your customers, you can’t learn what does and doesn’t engage them, and what effect this engagement does or doesn’t have. So before you can do CRM, you need a decent data collection policy, and the means to analyse the data in the context of the CRM programme you envisage for them. And it should go without saying that it’s vital to make sure all data is accurate and up to date.

 

Get the right system for your organisation

Choosing the right system will help you achieve your business and CRM objectives, in developing all potential revenue streams and building a 360 degree view of your customer and their needs.   Choosing the wrong system could spell financial and customer relationship disaster!  It involves a five-step process and is something I and my colleagues at the Ticketing Institute can help you with:

  • Information Gathering
  • Specification
  • Priced Tenders
  • Evaluation, and implementation

©Helen Dunnett, HD Consulting

The Importance of a CRM Strategy

Why having a CRM Strategy is Important…

Helen Dunnett, HD Consulting, explains why having a CRM strategy is key to the success of the 21st century arts organisation

Having a Customer Relationship Management (CRM) strategy in place is becoming ever more urgent. With the continuing reduction and uncertainty in arts funding, most arts organisations have to achieve more with less . We all have to work harder to prove that what we are doing is effective.

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On the Road to Strategic CRM: The Balanced Database

Helen Dunnett has been working with Purple Seven on a significant advance in the available techniques to help arts organisations work smarter and more cost effectively.

The flat-lining economies and the reductions in arts funding mean most arts organisations are grappling with having to achieve more with less, and to prove that what they are doing is effective.  It becomes ever more urgent to get a Customer Relationship Management (CRM) strategy in place which works to develop audiences and increase their engagement. 

The Balanced Database is an intensive training programme that gives arts organisations software, training and marketing support, aiming to increase ticket revenue, reduce wasted marketing spend and to improve mailing response rates.  And the best bit is they give you your money back if that doesn’t happen!

The key thing about the Balanced Database is that it does not require any additional data or research, because it is based purely on the existing database, so it can be implemented immediately.  

The first step is to analyse the organisation’s data (that’s real, ‘live’ data) to see if it conforms to some standard principles of recency, frequency and value. After all, one customer type is not enough, we must identify the several customer types in the database, who can be relied on to respond in different situations.  We need to understand the real people we actually have on the database and their propensity to attend. 

What is clear from the data is that recency and frequency drive propensity to attend, and that each segment has different levels of propensity and purchase behaviour. So the more recent your last visit, the more likely it is you will attend again and the more you attend, the more likely it is you will attend again.

This has got to be the place to start building relationships with customers. What’s really important about the Balanced Database is that it is a leap forward in segmentation implementation from the days when I pioneered Audience Builder; then you needed a heck of a lot of dedication and commitment to maintain the programme and monitor progress.  

The flat-lining economies and the reductions in arts funding mean most arts organisations are grappling with having to achieve more with less, and to prove that what they are doing is effective.  It becomes ever more urgent to get a Customer Relationship Management (CRM) strategy in place which works to develop audiences and increase their engagement.

As part of my CRM quest, I’m working with Warwick-based database marketing company Purple Seven to deliver their cutting edge Balanced Database programme.  This is a significant advance in the available techniques.  Simply put it is an intensive training programme that gives arts organisations software, training and marketing support, aiming to increase ticket revenue, reduce wasted marketing spend and to improve mailing response rates.  And the best bit is they give you your money back if that doesn’t happen!

In my last opinion piece ‘Customer Relationship Management: the strategic choice’  on TheTicketingInstitute website, I emphasised the importance of box office data and it being the ‘database of truth’: that’s what the Balanced Database programme is all about. It makes the most of the valuable resource that arts organisations already have (even if they sometimes don’t know it) and it makes it really work for them, to help them market to the right people at the right time with the right offer, that will bring audiences through the doors more often, and for a lower marketing cost.

What is really exciting, and the reason I’ve become involved, is that it’s so much more than a piece of software.  As well as “doing what it says on the tin”, it is in practice a whole new approach to managing CRM. So, rather than handing over the software with some technical training, there are three intensive days working directly with organisations on segmentation, communication methods and developing a strategy.  And after that there is still 12 months of marketing support to be had while following through on the project.

The starting point is about getting to grips with the fundamentals of segmentation and whilst there are lots of sophisticated segmentation models out there (like Audience Builder – see my last opinion piece; Morris Hargreaves MacIntyre’s Culture Segments; ACE Audiences Insights, etc.) the key thing about the Balanced Database is that it does not require any additional data or research, because it is based purely on the existing database, so it can be implemented immediately.  The idea by the end of the course is that there is a comprehensive understanding of the segments that exist within the customer database, an ability to manage the database so it works for the organisation involved, and full knowledge of the different strategies to employ, how to deploy them, and why they are important.

The first step is to analyse the organisation’s data (that’s real, ‘live’ data) to see if it conforms to some standard principles of recency, frequency and value. After all, one customer type is not enough, we must identify the several customer types in the database, who can be relied on to respond in different situations.  We need to understand the real people we actually have on the database and their propensity to attend.  And the segments that the Balanced Database works on look like this:

Achieving a Balanced Database is about getting a balance of each of the segments in the funnel, where the ‘in flows’ are equal to the ‘outflows’ (either to ‘stale’ or migrated to another segment) and where the volumes in the segments can sustain the necessary activity.  If the balance of customers in a segment stays the same but revenues fall then there are not enough customers in that segment.

What is clear from the data is that recency and frequency drive propensity to attend, and that each segment has different levels of propensity and purchase behaviour. So the more recent your last visit, the more likely it is you will attend again and the more you attend, the more likely it is you will attend again.

So if one were to implement a ‘maintain’ strategy (where the database is balanced and we want to keep the numbers in each segment the same) the ideal would be to reduce the flows to keep the same number of customers in the segments – this means reducing flow to stales so we need fewer new customers.

This all comes together in the next Balanced Database tool which gives a picture of the flows in and out of each of the segments over a given time period (ideally that would be over 12 months).  This flow chart provides the information to understand the dynamic nature of the balanced database and a basis on which to start to develop the communications tools to target the different segments.

Lastly, and the content of the final training session, would be to figure out the different strategies that might be employed, be that Growth, Exploit, Re-activate, Maintain or a combined strategy.  These event reports are vital in helping organisations to make those decisions and back up the figures from the flow chart.

Colston Hall in Bristol have been undergoing the training programme over the last few months and it has already had a dramatic effect on their marketing both in terms of the return on the investment and in prompting a whole new way of thinking and developing CRM strategies for the future.

For example as part of the ‘money back guarantee’ they undertook a brochure mailing where they agreed to mail 50% of their list in the usual way and to allow Purple Seven to mail 50% using Balanced Database (both mailings went out at the same time).  The results speak for themselves:

Colston Hall Purple Seven
2,500 mailed 2,500 mailed
4% response 16% response
£4,500 profit £26,400 profit

Consequently there was no money given back, and instead a considerable return on investment.

 

 

And this is what Head of Marketing, Sarah Robertson, thinks about the programme so far: “Using Balanced Database has changed for the better the process of planning and implementing marketing campaigns for our shows and Colston Hall overall.

The system gives us clear data at our fingertips that helps us see current and potential audiences and points to marketing tactics that will work to increase sales and recognise, and act upon, shows that need a push.  

The training from Purple Seven and Helen Dunnett has been interesting and inspirational, with the sessions being challenging enough to question our overall audience strategies but also simple enough for us to be able to take the learning’s home and implement them easily at the Hall.”

This has got to be the place to start building relationships with customers. What’s really important about the Balanced Database is that it is a leap forward in segmentation implementation from the days when I pioneered Audience Builder; then you needed a heck of a lot of dedication and commitment to maintain the programme and monitor progress.  And once these basic building blocks are in place, and working effectively, you can deploy more sophisticated audience development building tools such as Audience Builder or one of the other segmentation models out there.

Helen Dunnett

helendunnett@hd-consulting.co.uk

www.hd-consulting.co.uk

Customer Relationship Management – the strategic choice

Helen believes CRM has to be the strategic choice of the future.  Most organisations seem not really to be practising it, and some are reluctant to start.  Yet at the RLPO, its application, and the development of the Audience Builder Climbing Frame, transformed attendances in a few years.

Take a look at your customer data: the box office system should be an organisation’s most powerful CRM tool – the “database of truth”, encompassing all the information on your customers and their inter-actions with your organisation, from every “touch-point”.

It may not be for the faint hearted, but if arts organisations want to look to the future, and survive in this brave new world of reduced funding, then CRM, whether it is the Audience Builder or something else, has to become reality, a way of life, not something to be talked about and then forgotten.

I hear a lot of people at the moment talking about Customer Relationship Management (CRM) and how they need to do it – the problem though is most are not doing it and seem reluctant to start.  After over 15 years of doing marketing in a whole host of organisations, each time I’ve begun working at a new organisation, it’s been like starting at ground zero in terms of CRM.  Why is that?

Perhaps it’s because it takes a lot of dedication and hard work, starting with setting out a strategy. It won’t happen without one and what’s also important is to get the foundations right.  It’s not about selling, it’s about marketing.  It is about focusing on finding out who your customers are, what they want, and then actively seeking to meet their needs – that means developing audiences by seeking to change their behaviour but with their needs at the core, not your own or your organisation’s.

So what might a strategy look like?  As mentioned earlier: getting back to basics is a good start.  Take a look at your customer data: the box office system should be an organisations’ most powerful CRM tool – the “database of truth”, encompassing all the information on your customers and their inter-actions with your organisation, from every “touch-point”.

More often than not there’s a systematic underdevelopment of box office data where only the top, most loyal, customers are ever contacted and the rest are ignored.  I strongly believe that you also need to centralise your data, bringing the whole organisations contacts into once place.  There can be a lot of resistance from ‘over protective’ departments and it often requires a big cultural shift, but it’s a no brainer in terms of good practice and making a CRM strategy work.

Why do we just focus on the people ‘in the know’ who are like us?  I suppose because it’s easy, a quick win.  The task should be to persuade the less knowledgeable and wary to come, and to come more often.  Any audience development strategy should be about, at the simplest level, increasing the number of attenders (often a priority for financial reasons), enabling both existing attenders to enjoy more often, and new attenders to come along for the first time.  Not forgetting of course increasing the range and size of audiences.

So a model that is still relevant is the good old loyalty ladder with audience development being about getting your customers to move up the ladder.  This isn’t new but it’s astonishing how difficult is seems to be for many to achieve in a consistent, coherent and holistic way:

To illustrate the CRM step on the ladder here’s how something called the ‘Audience Builder’ system reinvigorated an ailing Royal Liverpool Philharmonic Orchestra and why it’s subsequently been adopted by arts organisations around the world who have grasped the simple concept.

In the early 2000’s, like most other UK orchestras, the Royal Liverpool Philharmonic Orchestra’s audiences were in decline.  Two decades of ‘status quo’ marketing had failed to engage a whole generation of potential concert-goers.  As the audience aged, the subscription base began to ebb away and the huge numbers of group bookers that once thronged the ‘Classics’ concerts dwindled to a just a few die hards.  We’d ended up creating a core of loyal, high frequency, subscribing super-attenders, but, for every core attender there were three irregular attenders, double that number we hadn’t seen for a year or two, and nearly three times that number who weren’t mailed anymore.  And our communications were either brochures aimed at the tiny core audience or terrible direct mail letters that were full of patronising, hackneyed and clichéd phrases.

So we needed to stop ‘selling’ tickets and start helping individual audience members to ‘buy’ them. It was a whole audience-focused philosophy.  It was real audience development.  What was being developed were relationships that yielded loyalty, frequency and risk-taking.  The philosophy was backed up by the whole audience-focused science of CRM. The Audience Builder system was bespoke Customer Relationship Management pioneered at the Royal Liverpool Philharmonic Orchestra, with Andrew McIntrye (Morris, Hargreaves, McIntyre), and has subsequently been rolled out with success in the UK, the US and Australia.

What was, and is, so important about it, is that it is NOT just another audience development scheme or good marketing practice.  It is a new approach to arts marketing management – a complete, integrated system that helped to deliver the audience and financial targets needed to achieve our artistic ambitions.

What made sense for Board, Chief Executive, artistic colleagues and the marketing team was that it grew sales; increased audiences; informed planning; targeted campaigns at those most likely to buy, even if they hadn’t bought similar before; made us more persuasive; helped us manage our brand; maximised financial return; monitored performance; and produced clear, understandable reports. In short, it became a personal development plan for each and every member of the audience.

At the heart of the system is sophisticated segmentation.  We analysed the box office data to identify and define distinct segments with different behaviour, motivations, attitudes, needs, and responses.  We then set specific objectives and targets for each segment and devised detailed marketing strategies and plans to achieve them.  Everything can be, and is, differentiated: the product, the price, the promotion – indeed the whole marketing mix.  So it was no longer one size fits all: everything was relevant and persuasive.

We segmented our attenders into a Climbing Frame of Loyalty – they were graded according to their frequency and the type* of concerts they attended (*by that I mean the perceived difficulty from an audience perspective taking into account unknown or little known works, new music and artists).  The Frame included lapsed attenders right through to the most loyal subscribers and group bookers:

There were also a whole host of Excel campaign planning sheets plus a Learnings sheet and a Marketing toolkit sheet.  We slashed the number of brochures.  We scrapped the ineffective ladder ads in newspapers.  We did away with the old-fashioned direct mail letters and replaced them with evangelical, celebratory messages that were genuinely personal from us, rather than superficially personal to them.  We developed easy to use subscription material and we even started to ring the audience to talk to them about what they thought.

The results were spectacular.  At campaign level the exact return on investment doubled and sometimes tripled.  At strategy level the organisation was transformed with 14,000 new attenders meaning that the audience grew by a staggering 44% in three years.  Retention and frequency went up, seat occupancy went up 13% and ticket yield up by 14%.  We also gained 1,600 new subscribers and a quarter of the audience were persuaded to try more challenging concerts.  All this definitely showed the vital signs of a healthy audience.  It was the combination of a deep understanding of the audience, sophisticated segmentation, a totally strategic approach, application of innovative audience development techniques and lots of very hard work by the team at the RLPO.

Audience Builder did require a fundamental change to the way we planned, budgeted, communicated and monitored our strategy and the process of adoption needs very careful planning.  It could be compared to the challenge of changing box office systems. For example, you might have to change staff job descriptions to meet the increased data needs.

It may not be for the faint hearted, but if arts organisations want to look to the future, and survive in this brave new world of reduced funding, then CRM, whether it is the Audience Builder or something else, has to become reality, a way of life, not something to be talked about and then forgotten.

Helen

helendunnett@hd-consulting.co.uk