GOLF, ART & SPA DAYS Reclaiming gift experiences for arts & culture organisations
INCREDIBLE EXPERIENCES ARE THE BREAD & BUTTER OF THE ARTS SECTOR
Yet when it comes to marketing unique experiences for gift buyers, the arts are strangely absent from popular gift experience sites. Why? And can this change? So we set off with a very simple idea: let’s work with some of London’s hottest arts venues to explore whether it is possible to create and package cultural events as gift experiences. To test this, we received support from the Digital R&D Fund for the Arts. The fund has been created by Nesta, Arts & Humanities Research Council and public funding by the National Lottery through Arts Council England. We embarked on a year-long project with Dulwich Picture Gallery, Whitechapel Gallery, the Royal Academy of Arts, Design Museum, English National Opera and Barbican. Our lead research partners were Fusion Analytics, the University of Salford and Judge Business School, University of Cambridge.
This document is an introduction to some of the key insights and lessons we’ve discovered during the last year. It begins with insights looking at key trends in experience products, before considering the opportunities for the not-for-profit cultural sector, looking at market segments and four model templates for experiences. We then explore the relationship between gift experiences and memberships, considering the business models and strategies involved, before providing some practical next steps. We hope that you’ll be excited and inspired by the huge opportunities available through gift experiences, and use this as a diving board for discussion and development with your teams. if you are interested in diving deeper into this subject, please contact us by email at hello@remixsummits.com and we would love to discuss it further.
TRENDS & INSIGHTS
SUPPLYING DEMAND The Art of Dining The Art of Dining is a great example of responding to consumer demand for unique, immersive experiences. It describes itself as food, set design and art all mixed up together. A collaboration between Moro trained Chef Ellen Parr and Artist set designer Alice Hodge to date their pop-up’s include creating a world based on the quirky British subject matter of artist Martin Parr with a matching food experience over 5-courses. Another event took place in partnership with the National Trust at Osterley House inspired by the East India Company which has a close association with the property. Most recently they curated a Seed Feast as the appropriate venue of the Garden Museum in London.
The events regularly sell-out and the most recent price-point is £55. They have tapped into several trends including growing interest in food and drink, culture and experiencing interesting environments (such as cultural venues) in totally new ways through the set design aspect with like-minded souls. The founders of Pret a Diner also set out to ‘create a restaurant where curiosities could be satisfied’ developing a a similar concept but at a more premium price point with ‘Michelin’ standard dining (Huffington Post). The experiential element has proved a key driver in other similar examples such as the Lost Lectures, Punchdrunk and Secret Cinema.
TIERED OFFERS, ADDED VALUE Tenement Museum NYC As people increasingly seek unique and organic experiences the power of review platforms is clear with TripAdvisor alone now reaching 315 unique monthly visitors with 190 million reviews across 45 countries. With more and more consumers booking cultural experiences on the basis of word-of-mouth reviews and peer recommendations, how do cultural experience providers differentiate themselves to rise up the rankings? The Tenement Museum found a way sitting at an impressive 19th in the list of things to do in NYC on Tripadvisor.com (November 2014). This is ahead of such attractions as MoMA, the Empire State Building and the Statue of Liberty.
The secret of their success? Tiering an offer to different customer segments rather than offering a one-size fits all visitor journey. With an overall vision to help people understand immigration in the Lower East Side of Manhattan, tour options include the ‘Irish Outsiders’, ‘Shop Life’, ‘Sweatshop Workers’, ‘Hard Times’ and ‘Exploring 97 Orchard Street’. Great storytelling also lies at the heart of the experience allowing the institution to charge a premium. Smaller numbers per tour getting a higher quality experience created great reviews which in turn drove demand creating regular sellouts. This further drove demand because of perceived scarcity value.
CULTURAL TOURISM London Eye There are some great examples of entrepreneurial spirit in the visitor attractions market more generally that continue to creatively reinvent and repackage themselves.
The London Eye is a case in point. There would seem to be limits to the imagination of what can be done with a giant Ferris Wheel but they have developed a range of partnerships to cater for different audience segments. Different price points, for example, include the standard experience to Private Capsule or Cupid’s Capsule for the more romantically-minded. They have partnerships with Hotel Chocolat for a Chocolate experience and with Vinopolis for Wine and Champagne tasting.
The attraction has also been quick to tap into key occasions in the calendar such as the creation of a 4D experience as part of it’s Frostival celebrations at Christmas. You can even have dinner for £5,000 (over 3 rotations). The tactics appear to be paying dividends as the Eye is London’s most popular paid visitor attraction with an average of 3.75 millon visits per annum. It is interesting that the Eye have teamed up with other attractions such as Vinopolis and there remain opportunities for further aggregation in the culture sector and third party collaborators such as restaurants and commercial brands to create new cultural experiences.
ART AT THE CORE Demand for quality content Authenticity is a word that gets used a lot but the artistic content at the core of the experience remains essential to creating successful cultural experiences. One example is recently launched Keeper’s House, a new space in the Royal Academy of Arts developed to maximise income and deliver a range of spaces for a range of different types of members. It is inspired by the success of brands in the membership club space, such as Soho House and The Hospital, but the interior design and programming come from the Royal Academy. Indeed the influence of Royal Academicians becomes apparent the moment you walk through the door under a pink neon sign saying ‘Keep me Safe’ from the artist Tracey Emin.
This is important if arts organisations and artists are to collaborate with other parties to achieve the same goal in spaces beyond the walls of institutions. They should not be token contributors. Another Tracey Emin collaboration illustrates this where she spend a year collaborating with the 34 restaurant in Mayfair to actually commission and make really special things for the Private Dining room including upholstery, carpet and even individual small bronzes for the window sills. What other content can be further utilised by arts organisations? Even the exhibition can be reinvented as an different kind of experience such as the new collaboration between immersive theatre company Punchdrunk and the National Maritime Museum.
ALWAYS ON DEMAND The growth of spontaneity The huge growth in smartphone usage in the last few years has created new opportunities to enable consumers to be more spontaneous when accessing cultural experiences. In 2014 for the first time more than 50% of the UK population use these devices. Trends such as urbanomics have accelerated the opportunities in this space for the arts. With large numbers of affluent consumers seeking to participate in the experience economy Yplan is a good example of a service that has capitalised. Push technology allows Yplan to notify people who have downloaded the app what events are happening near them both on the day and one-day out. You can then buy a ticket in only 2 taps.
The results have been spectacular: 1 million downloads and Yplan can be found on 20% of iPhones in London. The platform is also expanding rapidly, raising $24 million in November 2014 and already employing 70 people with the service now available in several US cities as well as the UK. Several major cultural institutions have partnered with the platform to offer experiences such as the Natural History Museum (discounted Skating package) and the Brooklyn Museum / Beats Festival. 60% of all bookings on the platform are for events the day of the purchase, and another 30% are for things booked the day before; 90% of the listings are for things to do in the same week.
CONSUMER INSIGHTS Research partner Fusion Analytics conducted a detailed investigation into the London marketplace for cultural experiences. The results of the customer survey are available in full (see back page), and here we summarise its key findings. •
•
•
The London cultural events market is large, with more than 9 in 10 respondents expressing interest or consideration to attend a cultural event. Two thirds of these consumers have attended a cultural event in the last 2 years and about half paid to attend their last event. Across generations, cultural events are of keen interest to half of the London target population, with Inner London borough residents significantly more likely to be keenly interested.
•
•
Gen X respondents were more likely to attend cultural events to spend time with family and friends and with children – while Gen Y were more motived to attend while on holiday. Respondents were most interested in events over the weekend and are slightly less likely to be interested in evening. Less than half are interested in events that include dinner – Gen X’s are most willing to attend events that include dinner and that take place during the evening.
•
For target cultural events, across generations, cultural social events are most popular. Boomers are most likely to have taken a behind the scenes tour while Gen X & Y are most likely to have taken an artist workshop.
•
Nearly two-thirds of London respondents report paying for their last cultural event – with one quarter spending more than £51 per ticket.
•
Gen Y respondents are nearly twice as likely as Gen X and boomers to have paid between £20 and £50 for their last cultural event.
•
Cultural social events possess the highest appeal across generations. However, boomers disproportionately rate greater interest in behind-the-scenes tours, private views and walking tours. Gen X are most interested in film screenings while both Gen X & Y express the highest interest in workshop events.
OPPORTUNITIES FOR ARTS ORGS After examining the current landscape for experiences, our research partner Fusion Analytics identified product segments for targeting B2C and B2B customers. The competitive analysis is available in full (see back page). Here, we summarise how these segments fit with the existing assets and structures of arts organisations and suggest four model templates.
OPPORTUNITY 1: GIFT AND OCCASIONS Experiences for the Gift & Occasions segment are predominantly mass-market, often with a focus on high-volume, low-margin opportunities.
THE SEGMENT
THE OPPORTUNITIES
Products for the Gift and Occasions segment can be national or citybased, allowing plenty of opportunities for aggregation and collaboration between organisations. Customers prioritise one-off purchases, usually in the form of vouchers or ‘build your own’ models.
Organisations with strong commercial operations, for example in catering and retail, should be able to easily bundle add-ons or upsells to existing services to create unique, high volume and easy to replicate experience products for this segment.
The price range varies significantly, from £35 through to £1,600, with few culture-specific offerings.
In terms of sales channels, there are opportunities to establish culture-specific services for this market. It may be through ownbrand products, or by acting as an aggregator of packages to third party providers.
Where they exist, cultural experiences tend to be easily commoditised, for example performance plus dinner, siteseeing and high-end tours. There is also a limited ‘arts and crafts’ offering available. Providers include established major players such as Red Letter Days, WHSmith and Virgin Experiences, as well as supermarkets such as ASDA Gifts and Tesco (in association with Buyagift).
There is also the opportunity to partner with upscale retailers such as M&S or John Lewis to provide cultural experiences for their customer demographics.
OPPORTUNITY 2: CULTURE AFICIONADOS Experiences for Culture Aficionados require an indepth exploration of content, including collections and performances, along with contextual information and insight.
THE SEGMENT
THE OPPORTUNITIES
Like the Gifts segment, experiences for the Culture Aficionado segment can be national or city-based in scope, and are aimed at those who want a ‘deeper cultural dive’.
This segment is particularly suited to arts organisations with strong and proactive curatorial teams, who have sufficient capacity to create one-off special events.
Current business models for this segment tend to be subscriptionbased, with the potential to charge for one-off purchases for major events.
It is also suited to organisations with extensive networks of trustees, patrons, affiliated artists and so forth, who could be called on to provide exclusive experiences.
Tiered memberships involve monthly special events (such as meet the artist) at approximately £100 p.a. or member-only programmes typically around £90 p.a. This segment is highly fragmented, dominated by smaller-scale independent businesses (e.g. Love Art London) or organisation-specific schemes including patron and membership programmes.
Across organisations, there is ample opportunity to aggregate premium patron packages, or build a thematic partner programme across multiple organisations, for example on the themes of performance, drawing, etc.
OPPORTUNITY 3: ARTS & CRAFTS LEARNING Experiences designed for the Arts & Crafts Learning segment are best offered as standalone workshops undertaken in a single sitting by users.
THE SEGMENT
THE OPPORTUNITIES
Experiences within the Arts & Crafts Learning segment are aimed at the skills improvement market or hobbyist.
Organisations with active adult education and learning departments are well suited to create and package experiences for this segment.
Existing operators tend to provide options for self-enrolment, gift or membership to accommodate several different purchase motivations, and prices range from £30 to £600. This segment is dominated by small independent businesses (often London-centric) plus the adult education schemes run by arts organisations. This leads to a highly fragmented supply chain, albeit with a strong product offering.
There may be opportunities to build a new tiered membership model across organisations, and aggregate adult learning packages as a ‘onestop’ shop. As with the Culture Aficionado segment, there is equally an opportunity to build thematic programmes across partners in certain areas.
OPPORTUNITY 4: VIP & CORPORATE Experiences designed for the VIP & Corporate segments can be seen as an extension to existing activities by development teams across high net worth targets.
THE SEGMENT
THE OPPORTUNITIES
Targeted at UK and overseas market, the VIP and corporate segment can cross both B2C and B2B markets.
Organisations with strong development departments can enhance or leverage relationships with existing corporates and high net worth individuals through these additional service offers packaged as experience products.
Typical business models would include elite partner programmes, VIP concierge services and hospitality or corporate services, for example in collaboration with airlines, hotels and card companies). Pricepoints for this segment are significantly higher, with an average spend over ÂŁ1,000. Typical experience products include VIP backstage access or Meet the Stars.
The VIP and corporate segment is crowded, dominated by elite loyalty and high-end concierge service providers. Having said this, few operate solely in the culture space and so there is opportunity for creating a VIP culture service or provision of culture-specific services to existing programmes.
MODEL 1: COFFEEHOUSE EXPERIMENT A bold reimagining of the 17th & 18th Century London coffeehouses for the modern age. Expect an evening of convivial conversation & debate powered by mighty coffee, spontaneous performances and rabble-rousing stimulation from expert speakers. Prior to the introduction of coffee, the urban British public survived on a liquid diet of booze and milk as the water was too polluted. The transition from consuming alcohol (a depressant) to caffeine (a stimulant) in the academic world facilitated an extraordinary shift in socio-political consciousness. The London coffeehouse was an electric hot-bed of clandestine, noholds-barred, radical thinking that permeated the cultural, scientific and political landscapes.
Inspired by the etiquette, conventions and dynamic sociability of the original coffeehouses, The Coffeehouse Experiment offers a vivacious space for strangers to come together, be inspired and exchange ideas on a kaleidoscopic array of topics.
FORMAT
FINANCES
Rules: Leave your title, stripes and ill manners at the door; you must speak to strangers and bring a hat.
Targeted at adults of all ages looking to talk with strangers. Standard rate £25 with a discounted rate of £15 for ‘pioneers’ to help build critical mass and add interesting angles to discussions.
The event runs from 18:45 to 21:30. The room is set up with approximately 5 large tables, each holding 12 people and each themed on a subject to inspire debate (e.g. politics, conspiracy theories, technology). Each table has one or two invited subject experts allocated for the duration of the event and all guests including experts are known by their firstname only. On arrival guests sit at a table and hear a short introduction to the rules, followed by a ‘rabble rousing’ speech (15-20 minutes). They are then invited to discuss the theme of their table for 20-30 minutes, including loose facilitation by the subject experts if required, before a bell rings requiring them to move to another table of their choice.
INCOME
£
Pioneers (10 @£15)
150
Tickets (63 @£25)
1575 1725
EXPENDITURE
£
Actors
215
VAT liability
287.50 502.50
PROFIT
1222.50
MODEL 2: SOCIAL CULTURAL EVENTS
FORMATS
DETAILED INSIGHTS
Some key considerations when planning social cultural events are:
53% of London respondents to the Customer Survey were interested in paying to attend a social cultural event, described as “Socialise at a unique reception and/or dinner in a cultural venue. From 1920s style dinner parties to seasonal gatherings, a range of events provide occasions for interacting with others and enjoying culture.”
•
When mixing with others is combined with enjoying culture or creativity, the opportunities for creating new social event formats are endless. From quizzes to date nights, themed dinners to cocktail events, this is a chance to experiment with providing creatively-stimulating fun and games. Social cultural events are at the intersection of several different trends. An increasing awareness of the power of play for adults allows participants to escape their comfort zone: improving problem solving and creativity, whilst forming deep connections with other people. This all-encompassing feeling of purposeless, sillyness, fun and pleasure becomes a catalyst for escape, stress relief and personal development. It is an increasingly popular riposte to the ‘urban grind’.
A second trend is the shifting audience for festivals, with many twenty- and thirty-somethings looking for the sense of escape and immersion which festivals provide, albeit often through niche offerings catering to their specific interests.
•
Approaching cultural social events as extensions of festivals, requiring similar creative environments and formats, whilst eliciting similar user responses, helps create a better understanding of the needs of participants in the planning phase.
•
•
Theme and environment – from initial concept through to the execution of the production, theatricality is often an important component of creating the ‘storytelling universe’ for participants to truly escape into. This doesn’t need to be big budget, but it does need to believable and whole-hearted. Risk and play – what gaming elements will be involved in the event to ensure participants are genuinely challenged and surprised? How will interactivity and competitive dynamics be created and sustained? Art and creativity – how will the format tie back into your core organisational strengths? Catering – are free drinks and/or dining necessary and are they covered by ticket income?
They were happy to pay an average of £95, the highest of the four formats tested. The maximum event median price was £60, although Boomers were willing to pay a median of £75 and Gen X £70. Important event features compared with other formats were: an evening out; the ability to socialise with friends and family; and a central London location.
Interest in social cultural events was most pronounced in Gen Y (66% very or somewhat interested, their most popular format of the 4 tested), with Gen X on 49%, and Boomers on 45%.
MODEL 3: CURATOR TOURS & PRIVATE VIEWS Premium experiences can easily be created when you create a sense of scarcity, insider knowledge and belonging to a ‘special group’. Behind the scenes or curator-led tours, access to artists and Private Views all fulfil these requirements, and are a rich source of premium cultural experiences. Scarcity or limited availability can be created through a number of tried and tested retail tactics: •
Price – offering discounts or additional benefits (free gift with purchase, two for one, etc.)
•
Time – pre-sales access ahead of other customers
•
Limited edition – available only for a set period or as a one-off
In addition, insider knowledge can be marketed as a direct product of
emerging from an authoritative source (in this case, the powerful brand of the arts partner, which should be integral to the marketing of this form of experience). It also emerges from the customer being first to know or experience something. Finally, belonging to such a special group is highly desirable for marketing purposes, where the shared experience is a key element of success – especially when tied into scarcity and insider knowledge.
FORMATS
DETAILED INSIGHTS
Private Views and previews are staples of arts organisations. The issue is therefore less about format, and more about marketing access to this naturally exclusive experience.
Out of 4 test concepts, London respondents to our Customer Survey were most interested in purchasing a ticket to a private view event (68%) followed by a behind the scenes event (62%). They were happy to pay an average of £69 for a PV or £81 for a Behind the Scenes event. The maximum event median price for either across all demographics was £50.
Creating an allocation of tickets for a Private View that can be packaged and sold as an experience is the most simplistic model. To avoid complications with Gift Aid (where a value is placed on a normally free event), it may be worthwhile supplementing the PV with additional opportunities such as a curator-led tour or drinks, or holding a special PV for ticketholders on a different day to a PV for donors and patrons. Similarly, curator-led tours and artist talks are already regularly programmed by many organisations. The challenge of selling these to an experiences market is primarily a marketing question: communicating their appeal to an audience beyond regular visitors (see next page).
The most important event feature for the PV was to learn or experience something new, and a specific interest in the subject matter. Least important was to meet new people. Private View events were particularly popular for Boomers and Gen X respondents, whereas Behind the Scenes events appealed across all generations.
MODEL 4: CULTURAL WORKSHOPS Ranging from a few hours to an all-day event, workshops provide interactive, hands-on experience to learn about a variety of topics, from street art to photography and film. They provide an opportunity for users to test and improve their own skills with experts guidance and peer support. Many arts organisations deliver a wide range of workshops for members and the general public across their specialist areas.
relatively straightforward, especially with an active education department.
From an Introduction to Drawing, to family art sessions, to detailed coaching on particular techniques, art workshops provide a rich vein of opportunities to create experiences for young and old alike.
The challenge in this space is often less about format and production, and more about marketing: finding a way of packaging the workshop to reach a new audience beyond those already engaged with the organisation.
Their close alignment with the core artistic mission of the organisation makes production and facilitation
Art workshops can provide a creative outlet for a mainstream audience – if we first reach them.
MARKETING
DETAILED INSIGHTS
A core challenge of arts marketing is preventing the very common preconception that culture ‘isn’t for me’. This self-selection dangerously reduces the audience willing to even hear arts marketing messages, long before the message itself is conveyed, and irrespective of how much they might like whatever is ultimately being offered.
52% of London respondents to our Customer Survey were interested in purchasing a ticket to a workshop and were happy to pay an average of £69 for this. The maximum event median price was £50, and 35% of respondents were willing to pay £51 or more.
This reaction is sadly often tied into vocabulary: words such as ‘gallery’, ‘art’, ‘culture’, ‘museum’ often results in this self-selection, in a way that words such as ‘creativity’ or ‘photography’ do not. Yet, the brands of organisations are a positive source of endorsement for a learning product: a photography course by a gallery is often held in higher esteem.
Herein lies the challenge for arts marketers: how can we package a workshop to have immediate relevance, ensuring the top tier of messaging engages users rather than triggering self-selection?
Perhaps unsurprisingly, the most important event feature for the workshop was to learn or experience something new, plus a specific interest in the subject matter. Of lower importance was an evening out, to socialise, a mustsee venue or a central London location. Exclusivity was also very low on the list of motivations. Workshop events were particularly popular with Gen Y respondents (60% very or somewhat interested), followed by Gen X (51%) then Boomers (45%).
MANAGING A PORTFOLIO
PROFILE OF MEMBER EVENTS As we’ve already mentioned, many arts organisations already manage a rich diary of events for the general public, schools and members. The arts partners on this R&D project are typical, providing talks, workshops, social events and tours across a broad range of topics. Dulwich Picture Gallery, for example, hosts workshops on many different art techniques including drawing, collagraph portraits, printmaking and basketry. As well as art appreciation and practice, organisations provide workshops on careers and industry trends. Whitechapel Gallery hosts workshops on managing collections, writing about art and
programming, and Design Museum hosts regular sessions called Create & Make (5-11 years), Sunday Sketch and Get into Design (for young people).
Talks are similarly widespread. They can be tied into current exhibitions or performances, for example preperformance talks at the ENO, or on particular specialist topics such as ‘Art under the Nazis’ and ‘the Travel Poster’ (DPG), or the ‘Politics of Fibre’, ‘Networks’ or ‘Sexuality’ (Whitechapel Gallery). The Design Museum regularly collaborates with publications to present topics such as Harper’s Bazaar talking to designer Roksanda Ilincic, or It’s Nice That hosting an
evening on Disruption. Tours are also widespread across partners, for exhibitions, buildings and local areas. The Royal Academy of Arts, for example, provides Friends access to tours including Savile Club, St Paul’s Triforium, Dorney Court and Sadler’s Wells. Social events are less prevalent, but are hosted by most partners in this project. They often include performances, such as a piano recital or chamber ensemble at DPG, film nights at Whitechapel Gallery, carols at St James with the Royal Academy of Arts, and short story readings at Keeper’s House. The Design Museum has a members shopping night, and the ENO’s Opera Undressed programme attracts new audiences by bundling ticket, preperformance talk, post-show party and discounts on performances. The prices for these events are varied, but typically cluster in the region of £10 - £25 for talks and £125 - £200 for specialist courses.
EXPERIENCES? Having such a rich events programme already in place provides both opportunities and challenges for organisations entering into experience gifts. Managed effectively, there are clearly economies of scale and efficiencies to be leveraged for events teams programming both types of events and managing it as a portfolio (see next pages). On the other hand, there are two concerns worth highlighting: 1. Experience gifts may cannibalise sales of membership subscriptions, on the assumption that an annual fee is better than a one-off ticket; 2. Unless managed as a portfolio of events, with equal weighting, there may be a lack of ownership of experience gifts if staff targets and operations prioritise member sales. On the next page we propose several strategies to aid this balancing of membership events with experiences.
PREVENTING EVENT CANNIBALISATION How can an organisation balance the creation, marketing and delivery of both member events and experience gifts? START WITH UPSELLS
CLEAR BLUE WATER
ONE-OFF TICKETS
FOCUS ON FORMATS
Many member events fall within the Art & Craft Learning and Culture Aficionado segments.
Consider your existing spread of events and identify gaps where an experience gifts offer could distinctly sit without overlap.
You may decide to fully leverage the costs already going into events (e.g. the sunk costs of staff salaries, production costs) to package particular events as one-off experiences for a much broader audience than existing members and users.
There is nothing to prevent an organisation from managing experiences across many other organisations, providing you come up with a new experience format that can be rolled out in different locations.
An entry point into experience gifts may therefore be to prioritise the Gift & Occasions segments. Experiences can be commoditised, mass-market and high volume. This may include bundles (e.g. ticket and drink, dinner or gift), discounts such as two for one, special access times or entry into multiple organisations. They can be sold direct to consumers or through tourism affiliates such as hotels and airlines.
This may include types of events – for example, prioritising new social cultural event formats rather than workshops or talks, or may be distinctive due to the demographics you target (e.g. a workshop for office workers on collecting art). As this strategy may go beyond your organisation’s comfort zone, extra attention will need to be placed on effective marketing to reach the target demographics.
As per the workshop model above, the challenge here is a fundamental marketing one: how do we take an existing event, and creatively brand and package it to get maximum appeal to reach completely new audiences?
The cultural experiences sector needs a range of new, commercially viable and replicable formats. By temporarily removing the constraint of having to work within your existing organisation, can you put your creative skills to the test to come up with the next big thing?
BUSINESS MODELLING How should an organisation balance its existing subscription schemes against possible new sources of revenue from experience products? How can we allocate resource to properly test the new models in the marketplace without undermining low risk, existing activities? These strategic questions, focussed on risk and resource allocation, is at the very centre of being able to react to these new opportunities. The end goal is deceptively simple: a combination of various events, pricing tiers and target demographics that fit with the income targets and audience objectives of the organisation. There sadly is no simple formula for success, since every organisation will approach this conversation differently. Saying this, we would
argue that starting the conversation itself is most critical. It should be strategic, led by senior management to reconsider the portfolio of all income streams. The Japanese strategic thinker Kenichi Ohmae characterises the process of analysis, deconstruction and reconstruction necessary for organisations to go through to analyse and respond to these new opportunities: “In strategic thinking, one first seeks a clear understanding of the particular character of each element of a situation and then makes the fullest possible use of human brain power to restructure the elements in the most advantageous way.�
There are areas of synergy between the resources and skills required for member schemes and those for gift experiences. Identifying these synergies will reduce the overall new investment required for testing experience gifts, given the sunk costs already in existence.
existing delivery) and market growth, creates four categories of products: stars, cash cows, question marks and dogs. Understanding their role in the overall portforlio can then help inform the investment strategy for each individual product.
Also, a product or events portfolio embraces the understanding that its components will be at different stages. They will each require different amounts of investment; have different projections for their potential to grow; and be at different stages in their lifecycles and adoption rates. The goal is to balance these different priorities.
It may be that subscription membership income is a Cash Cow, a steady, reliable profit source that has comparatively limited growth potential. Experience gifts could be a Question Mark (low market share, high market growth) and therefore a riskier investment but potentially lucrative if it evolves into a Star (high market share, high market growth).
An obvious tool is the Boston Matrix, which when applied to organisations assumes that there should be a balance between highgrowth products in need of investment, and low-growth products that generate income. A rating of products on two dimensions, market share (which can easily be adapted to scale of
Although this cannot be answered at a universal level, we believe it is critical for organisations to engage in these debates to fully explore what future opportunities may exist in supplying the large public appetite for unique experience gifts, both for new audience development and new revenue streams.
NEXT STEPS
TIME TO TRY IT. KEY TIPS Lead from the top. Entering the experiences market needs to be a strategic management decision as it will involve most departments. Minimise risk by testing. Put an idea out to market, with the selling point that – like crowd-funding – only with sufficient sales (to reach break even) will it go ahead. Think portfolio. Work on several formats at once, with varying complexity (from simple bundles to complex social events) to build a profitable portfolio of events.
Reach for the moon. If you hit a successful idea, think like a start-up. How can you enter a growth phase to roll it out in different locations? What’s the next big idea after that?
1. What have we got that we can use? List your physical spaces, networks of people, skills and expertise of staff, content (performances, collections, contextual info)
CULTURE ASSETS 3. How can we find opportunities to creatively combine our assets and consumer demand to come up with new formats?
2. What are consumers demanding in their leisure time, work time and home time? What trends from outside culture are shaping user attitudes and behaviours?
CONSUMER TRENDS
OPPORTUNITIES ENTREPRENEURIAL STRATEGIES REVENUE
AUDIENCES
5. How do we grow our most successful ideas? Are they being given enough attention and resource to fully reach their potential? Are we thinking big enough?
4. How do we make these idea happen? What is needed in terms of marketing, personnel and resource? How do we test to minimise risk?
WITH THANKS TO THE R&D PARTNERS.
FURTHER INFO
ARTS PARTNERS
All of the research created within this R&D project and referenced in this document is available in full for you to access. This includes:
RESEARCH PARTNERS
TECHNOLOGY PARTNER
•
a full overview of the competitive landscape
•
the findings from our survey of London consumers
Both were produced by Fusion Analytics, in partnership with the University of Salford and Judge Business School, and are available at remixsummits.com/experiences
Further resources connected to the project will be added to the site as they become available.
CONTACT US If you have any questions on this area, or wish to discuss it further, please contact us by email at hello@remixsummits.com