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The Atomization of Loyalty and the Future of Customer Relationships in the Performing Arts

ISSUE 26 • June 2024

AOM Images of Audiences including orchestra and pop concerts and outdoor concerts

By Alan Brown

This post was published in connection with an upcoming session at the 79th Annual Conference of the League of American Orchestras, June 6-8 in Houston, Texas.

Publicly available resources from the NAC study can be accessed here.

If Not Now, Then When?

If ever there were an opportune time to rethink the very nature of customer relationships in the performing arts sector, it is now. But the ways in which we think about customers – the relationships we offer them and the hierarchical way we value them based on what they spend and donate – are deeply entrenched in an outdated understanding of loyalty and premised on a system of privilege and patronage that is withering before our eyes. In fact, the sustainability of some institutions may hinge on a wholesale rethinking of the fundamentals of how they interact with the public.

For decades, our understanding of loyalty has focused on the institution as the sole object of affection. This understanding of loyalty casts arts institutions as competitors fighting against one another for a piece of a rather small pie – the share of demand that consumers allocate for attending live performances of classical music, opera, dance, and theatre. Of course, we now compete in a much more complex landscape, including streaming digital content and commercial entertainment.

Consumers, historically, have been tasked with managing a portfolio of relationships with arts institutions in their community. As their email address promulgates across databases, they are more or less bombarded with requests for more involvement and more money – like Juliet amongst a sea of Romeos armed with brochures, pledge forms, and “surprise and delight” letters. In fact, our commercialized understanding of loyalty and customer relationships fetishizes the act of consumption – indeed, a peculiar form of passive consumption that is waning in relevance to younger consumers. 

We treat our customers like ATMs, swiping our cards and hoping against hope that maybe this time more money will come out – not as humans with idiosyncratic tastes, preferences, and passions on a lifelong journey through the arts.

In truth, only a tiny proportion of the arts-loving public has the resources or will to forge strong and sustained ties with one or more arts organizations beyond occasional ticket buying. Yet, we have engineered an entire sector around their needs, despite our invocations to equity.

Conceptions of Loyalty

The scholarly literature on loyalty suggests there are different kinds of loyalty, not just one. The 4D Loyalty Framework (Kirk, 2018) is helpful in that it allows us to think about different kinds of loyalty in a non-hierarchical way. It also allows us to focus on what’s driving loyalty, rather than just what’s driving sales.

  • Inertia Loyalty results from high barriers to exit, as commonly found in cable TV subscriptions and perpetually renewing software licenses. 
  • Mercenary Loyalty is “purchased” by offering discounts or other financial incentives, as with frequent flyer programs.
  • True Loyalty exists when there’s an emotional connection rooted in experience, trust, shared values, and reciprocity that leads customers to reject competitive offers from other brands.
  • Cult Loyalty occurs when customers strongly identify with a brand, so switching to another brand would feel like betraying deeply held values.

Where are your loyalty programs in this taxonomy? We find Kirk’s model to be helpful in that it illustrates different kinds of loyalty but less than helpful as a framework for understanding loyalty in the specific context of the performing arts. For example, we know that subscribers might be initially attracted by discounts or same-seats incentives (“Mercenary Loyalty”), and then, gradually, through a process of familiarization and habit, grow into a stronger form of “True Loyalty.”

In the commercial entertainment sector, we see an abundance of “Cult Loyalty,” which only occasionally manifests in the arts sector (e.g., Misty Copeland, Yuja Wang) despite arts groups’ efforts to valorize their musicians, dancers, and artistic directors.

More and more arts organizations are realizing they want to shift away from transactional forms of loyalty towards more “relational” forms of loyalty that satisfy deeper emotional needs. This, however, requires a fundamental shift in thinking away from the bilateral model of consumption (we market to you, you buy a ticket, we deliver, you applaud, then buy another ticket) towards relationships that are more reciprocal, more spontaneous, and more interactive. It will also require us to learn how to communicate with customers apart from when we’re selling them and deliver the value that they want from us, not just the value we need from them. 

In sum, an incomplete and antiquated understanding of loyalty holds a vice grip on the sector and is holding us back from engaging the public in new and more equitable ways.

The Atomization of Loyalty

Long ago, consumer’s tastes aligned with genres of music, styles of dance, etc. The US population was more homogeneous, the field of arts organizations vying for demand was smaller, and digital content was a pipe dream. Arts organizations served as necessary intermediaries between professional artists and communities. Institutions started paying attention to branding in the 1970s and 1980s, but individual products (i.e., series, formats) weren’t branded. In this landscape, there was no reason to think about loyalty except in terms of affinity for the institution.

With the diversification of the American population over the past decades came diversification of cultural tastes, compounded by a dramatic proliferation of entertainment choices fueled by technological advances. Artists could bypass presenters and market directly to consumers. More nonprofit arts organizations sprang up, many of them small, founder-led organizations focused on the work of one artist. With the advent of social media, artists became self-managed brands. Everyone, in fact, became a brand.

Younger consumers adapted to this landscape by gaining a hyper-facility with brands. Consider the Electric Daisy Carnival 2024 DJ Lineup (Figure 1, below) – hundreds of artists (DJs), all individually branded. How many of the 300+ DJs would the average ticket buyer recognize? Maybe dozens? Just over half a million people attended this event. 

Electric Daisy Poster with many, many artist names listed in small font
Figure 1: Electric Daisy Carnival 2024 DJ Lineup

In the commercial entertainment sector, affinity often blossoms into raging loyalty or ‘fandom.’ Consumers can remain loyal fans of popular artists for decades (e.g., “Swifties,” Lady Gaga’s “Little Monsters”), but seldom care about intermediaries, esp. Live Nation.

This is what has happened with loyalty. Consumers are able to express “micro bits” of affinity for hundreds of artists, influencers, and products, enabled by a proliferation in branding and digital media. Expressing affinity is as easy as clicking “Like.” 

Affinity should not be confused with loyalty. A typical consumer’s tastes in art and culture might be defined by several hundred ‘affinities.’ More often than not, these affinities don’t blossom into full-blown loyalty but live for some period of time as a weak or dormant manifestation of interest. A theatregoer might have an affinity for the stage plays of August Wilson, for example, but that affinity might not translate into action but every few years when a local theatre company produces a Wilson play. With declining levels of institutional loyalty, in fact, theatres are left to awaken dormant or weak affinities for playwrights and specific titles. The problem is that fewer and fewer people have the depth of background in theatre to select plays based on playwrights and titles. On what basis, then, will they choose to attend?

Orchestras have been able to access considerable new veins of demand by trading on public affinity with branded film titles. One can only wonder how much of this affinity rubs off on the orchestra’s institutional brand.

In sum, the object-field of loyalty has infinitely expanded. As a consequence, the simplistic understanding of institutions as the sole containers for loyalty is a woefully inadequate and outdated strategy for building relationships with customers.

The Current State of Affinity in the Arts

If we allow ourselves to look beyond the institutional framing of loyalty, we see many points of emotional connection and affinities in the arts. These include:

  • Affinities for individual artists and ensembles
  • Affinities for specific composers, choreographers, and playwrights
  • Affinities for historical eras or stylistic periods of artistic work
  • Affinities for specific works of art/titles/pieces
  • Affinities for cultural diasporas (e.g., Irish music)
  • Affinities for specific venues and spaces, and, more recently, affinity for the idea of going to arts programs in unusual or temporary spaces (e.g., installation work)
  • Affinities for formats and ‘user experiences,’ apart from the specific program (e.g., Candlelight Concerts)

Over the years, arts organizations have relied on category-level affinities (e.g., affinity for ballet, opera, and classical music) to drive repeat attendance. With the continued and inevitable blurring of definitional lines between the genres and disciplines, however, fewer and fewer consumers align their affinities with categories of art. For example, interest in ‘jazz’ as a genre of music has been displaced by interest in specific artists whose music might be jazz or jazz-influenced. In the case of jazz, considerable affinity also accrues to a space (i.e., intimate jazz clubs).

Moreover, with the proliferation of digital content, it is very possible, and perhaps the norm, for consumers to maintain an interest in a genre of art without any sort of regular attendance at live performances by professional artists. Consider the tens of millions of Americans who enjoy high-quality drama on television but never would darken the door of a professional theatre company.

Patron databases are loaded up with people who came only once. Our research indicates that these ‘oncers’ are, in fact, as passionate about the art as high-frequency buyers. How, then, can we establish relationships with these people if their affinities for the art are strong, but they simply don’t respond to repeated ticket offers? 

We have constructed an entire sector around narrow definitions of art that speak more to the idiosyncrasies of artistic production than to public tastes. More specifically, we continue to idealize a specific kind of experience and a specific set of behavioral norms that cater to patrons of a certain age but do not map to the tastes of younger generations. 

egg diagram
Figure 2: An Emerging Framework for Loyalty

My point here is several-fold: 1) affinity is all around us if we can accept it for what it is; 2) in order for affinity to manifest as demand, arts organizations have to offer experiences that consumers really, really want to have; otherwise, there is no catalyst; and 3) if we can provide value to consumers in a form that does not require live attendance, we might be able to trade on an array of naturally-occurring ‘adjacent affinities,’ and thereby create stronger bonds with a larger segment of the public.

A New Framework for Loyalty

A new, more embracing understanding of loyalty is needed for a sector that struggles to engage a larger public. Instead of focusing exclusively on institution-level loyalty, we need a multi-layered framework that recognizes the many ways that customers can ‘relate’ to an organization’s mission (Figure 2).

1. Sharpening Brand Strategy

At the core of the framework is a portfolio of brands – not just an institutional brand, but branded formats, spaces, and experiences. Brands are the ‘glue’ that allows organizations to bind with customers on different levels. 

San Francisco Symphony’s SoundBox is an example of a well-branded format/space/series. In the past, these concerts sold out before the program was announced because the user experience was so compelling.

2. Expanding Direct Involvement

A small percentage of individuals will take advantage of opportunities to get personally involved in the organization’s work. In doing so, they’ll act out their own core values, and act as ambassadors in the community. 

The Gallo Center’s Duets program “…brings single, mature adults together to meet, mingle, and attend performances together.” Participants are encouraged to bring friends who don’t drive.

3. Leveraging Affiliation Opportunities

What opportunities for affiliation can you offer, apart from ticket buying? How might people in your community actively identify with your organization, even if they’re not able to attend as frequently as they’d like? This might include low-cost membership programs, affiliations framed as donor groups with a specific focus, self-directed interest groups managed through social media, etc.

Cirque du Soleil’s free Club Cirque program (“Your all-access pass to all things Cirque du Soleil”) provides news and educational information to subscribers worldwide. Essentially, it serves as a proprietary opt-in communications channel.

4. Cultivating Taste Communities

Audiences can be understood as a set of constantly evolving taste communities. An individual’s tastes are idiosyncratic and change over time. Organizations can tap into existing taste communities and create new ones through programming initiatives. When educational activities are tied to mainstage programming, only ticket buyers can benefit from the learning. In fact, many people are hungry to learn more about the art, whether or not they can attend regularly. What taste communities would you like to cultivate over the coming years? Will people pay to participate in them? Can they serve as a point of affinity and engagement for low-frequency ticket buyers? 

Examples include Dramawise (Palm Beach Dramaworks); Talking Sondheim, a privately organized educational experience; Ballet 101 (formerly offered by San Francisco Ballet); and XSeries Program in Classical Work, a paid continuing education program offered through Harvard University, consisting of five courses over four months.

5. Optimizing the Audience Experience

Ensuring that ticket buyers and their guests have a deeply fulfilling experience when they do come is a building block of loyalty. This encompasses everything from excellence in customer service to the full range of pre- and post-engagement activities and support for memorializing the experience so that patrons can collect and access treasured memories. This is one of the few ways that arts presenters can build loyalty apart from the artists/titles they offer.

La Jolla Playhouse has made considerable efforts over the past 10 years to make the audience experience more welcoming to a diverse public, such as hiring college students to serve as “audience concierges.”

6. Rewarding Frequency and Removing Barriers

This aspect of loyalty holds many of the more familiar sales practices aimed at increasing the frequency of purchase, including price incentives, priority seating, discounted ticket bundles for target segments, rush ticket programs, rewards programs, parking and transportation incentives, and various trial and bring-a-friend offers. “Buy early and avoid dynamic price increases” is the latest strategy for building loyalty, according to one consultant. Arts groups say they want to foster a “sense of belonging.” But is it realistic to think “belonging” can be an outcome of coercive transactional relationships?

Steppenwolf’s Red Card and Black Card are excellent examples of ticket bundles with flexible redemption. We follow with great interest nascent efforts to introduce smartphone apps as a sales channel for arts organizations. These apps facilitate in-app social connections and thereby lower social and transactional barriers to attendance.

Leading with Purpose, Not Patronage

We’ve come to define loyalty as the sum of all the bonds and connections that people make with an arts organization and its programs, spaces, formats, taste communities, etc.

If this is a viable definition of loyalty, then the customer relationships that arts organizations offer the public need to be completely rethought. We need to manage a tectonic shift from bilateral, transactional relationships to multilateral social and educational relationships that allow community members near and far to fulfill their affinities, cultivate new tastes, and act out their passions. In short, we need to offer relationships designed around their interests and values, not just relationships that advance an organization’s cash flow.

A small number of organizations are experimenting with new kinds of customer relationships, but the pace and scope of experimentation must be greatly accelerated. This is core R&D work for the arts sector, and cannot be approached as a long string of one-site, one-off experiments funded by grants to one organization. Instead, we need iterative, multi-site experiments where there are multiple chances to learn something, and learning is immediately transferred to the sector and informs the next round of experiments.

None of this can happen unless we allow ourselves to reconsider the fundamentals of our missions and how we interact with the public. How will we educate the larger base of current and former patrons, many of whom cannot attend, such that we might forge enduring relationships with a larger segment of the public? What formats, spaces, and experiences can we brand, so as to offer more points of connection? What relationships might we offer that would more deeply activate customers in our education work, not just our work with youth but also continuing education for adults? How can we make it easier for people to invite friends to our programs? When they do come, how can we optimize impact and help audience members accumulate memories of past programs so as to extend the impact? 

Subscription will remain a valued relationship for a very small proportion of the arts-loving public, but the larger challenge is mapping out a new set of connection points that welcome people into our missions in ways that reflect their quirky, individualized tastes and deep need for emotional and social connection.