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