The New York Philharmonic has just completed a record season with ticket sales swelling capacity to 84%. Sales had been depressed for several seasons following the September 11, 2001 attacks on the city, and capacity had been as low as 74%. This year’s capacity is the highest since the 2000-01 season. The Philharmonic has experienced the largest single-year increase in revenue and seats in its history, more impressive because there was no extraordinary driver of ticket sales, such as a new music director or hall. Further, special concerts, particularly holiday offerings and the Philharmonic’s June “Summertime Classics” series, have experienced dramatic growth.
David Snead, the Philharmonic’s Director of Marketing, reversed the trend with fresh tactics and messages to attract and retain new audiences. David joined the Philharmonic in 2001, having previously directed the marketing efforts of the Pittsburgh Symphony, the Guthrie Theatre, the Milwaukee Symphony, and the Hartford Symphony.
It was a hot, humid noon in July (they all were in July) when David and I met for lunch at O’Neal’s across from Lincoln Center. We talked at length about the Philharmonic’s sales, his strategy, and marketing in general. This transcript distills and organizes our free-range talk to a readable length.
Full Disclosure: Three seasons ago, David engaged me to write and produce the Philharmonic’s radio advertising campaign, and to recommend and place media schedules. This is a small part of his overall strategy. Our discussion focused on larger issues and new initiatives.
Christopher Stager: In 2004-05, Philharmonic concerts were sold to 79% capacity. For the just-finished 2005-06 season, sales grew to 84%. Where does that growth come from? Are those singles or subscriptions?
David Snead: Well, it represents 14,000 additional tickets. All singles. Subscriptions were even.
CS: What has been the challenge in selling subscriptions in New York?
DS: I think the major challenge is that it is a packaging device that the baby boomer and younger demographics just don’t feel works for them. If you look at who is buying new subscriptions now – really look at the traditional kind of subscription – it’s the older demographic. There are very few new subscriptions being sold with that traditional packaging device. For us, we sold 9,200 – what we would call new subscriptions – this past year, but only about 1800 of the new ones were the traditional type of subscription.
Most new subscribers are now buying Create-Your-Owns [flexible multi-concert packages allowing the customers to select their preferred concerts], which is something that started before I got here. And when I came, I tried to move people away from that to regular subscriptions and they just said no. When the market is saying no, I think you’ve got to evolve to a packaging device that will work for them. In this case, it’s the flexible packages that are really selling the best now.
The second issue is the competition. Unlike other markets, you see many, many other orchestras in New York besides the New York Philharmonic. We don’t have the advantage of being the main, sole provider of orchestral music.
CS: How is New York different than other cities in this way? The market’s desire to buy smaller packages or flex options? The desire to hand pick?
DS: It’s certainly been my impression that customers these days are moving more towards flexible options. I do know that the exchange policy is important. I’m not sure if other orchestras are selling as many Create-Your-Owns as we are.
CS: In many cities I work in, I find that these flex packages can really lower donor participation. Is that also true at the Philharmonic?
DS: I’m not sure. I have done lifetime value work based on subscribers overall, and new subscribers versus old subscribers. I haven’t broken it down by package, but if you could assume that most new subscribers are Create-Your-Owns, which is true, we do see that, obviously, donor participation for a new subscriber is lower than it is for a long time renewer. But we have seen over the course of two or three years that they do build up to the level of donor participation that you see in renewers, just as other subscribers do.
CS: That may be just an issue of New York versus other cities. That the commitment is demonstrated in less traditional ways than in other markets.
DS:Yeah. I do think that the amount of competition here is different than other places, and people may spread their dollars around a little bit more here than elsewhere. We do see that people attend a wider variety of events here than in other markets. There’s more crossover with opera, ballet, theater, that kind of thing. And that might apply to contributions as well. I’m not sure.
CS: What are the specific marketing challenges here that you hadn’t experienced before?
DS: The big one is the competition, which I have mentioned. I think the other challenge is the local economy, which was really hit hard by 9/11 and it has taken a couple of years to come back. The amount of our business from tourism is much greater than other markets where I’ve worked – 15% of our single-ticket sales are to tourists. We lost that after 9/11. They definitely are coming back now and one of the large reasons for our growth this year is in the return of tourists to New York.
CS: Were there also losses of local audience after 9/11?
DS: Yes. Overall, the economy just really suffered after 9/11. There was overall a decline in entertainment and arts attendance across everything – Broadway, opera, theater – after 9/11, fueled by the decline in tourism as well as local people attending less.
CS: Since tourism is such a key segment of your audience, what are your marketing strategies in this area?
DS: The main ones are traditional, through group sales and working with tour operators. We’ve really worked hard at developing good lists of tour operators and staying in close contact with them. We’ve focused on alumni groups and on students coming to New York to visit. Educational tourists have been key. We’ve also done a lot with Elderhostel.
CS:So most of the tourist business is groups?
DS: Most of our targeted tourism marketing efforts have been to groups.
CS: That and the couple coming from Columbus, Ohio.
DS: Well, that is happening, too, but we’re not devoting marketing dollars to try to find Mr. and Mrs. Bexley, who are going to come. I think that we try to reach them through the website, The New Yorker, The New York Times – all our usual communications.
CS: How important is local, non-tourist group sales?
DS: I think it varies. In our case, group sales is just over $1-million of $17-million of total ticket sales. So it’s not chump change.
CS:Is the group market finite? Could you increase to $2-million this year with double the group sales effort?
DS:No. I think there would have to be some changes in what we were offering to get to that level. For what we do, which is a classical concert, I think it’s a finite market. I don’t think doubling the staff would double the sales. Now, if we started introducing new products with broader appeal, then perhaps. But the classical audience is a small segment of the whole world.
CS:The Philharmonic, though, is the most famous name of that sector.
CS: There’s cachet. How would you leverage the value of the “brand value” (if you will) of the New York Philharmonic?
DS: The New York Philharmonic’s fame rests on how we performed last night. And I think that the orchestra is playing at levels truly higher than ever. The press – the media – says that and I hear it myself. And when people leave after the concert thinking they’ve heard something they’re not going to forget, that keeps the “brand” alive.
In the marketing materials, we don’t say we’re a really good orchestra because people sort of know that. Perception of quality is not what keeps some people away. There are other issues. Time, money, etc.
CS: Even in the work I do with you on the radio advertising campaign, we don’t spend a lot of time on “brand.” We focus on programming.
DS: Right. I would say, though, that in terms of the “brand,” we have been trying to tweak it a little bit, to warm it up. In the past, it was seen by some folks as a little austere and yes, a very good orchestra, but not personally involving. So a large part of marketing communications is to talk about the customer’s involvement in the experience of hearing the Philharmonic.
CS: What have you done to make the experience more personal? I remember your once showing me research that showed that a sizable segment of the active market for classical music in New York wasn’t coming to the Philharmonic.
DS:There’s growth in a couple of areas. One is getting people who are in the market to try us. One of the ways that we’re doing this is on the website. Attendance is highly correlated, obviously, with enjoyment and familiarity with classical music. The more familiar you are, the more you enjoy it; the more you go. And the opposite is also true. The less familiar you are, the less you enjoy it.
So we’ve been trying to really do a lot on the website to enhance people’s familiarity and enjoyment of the music we’re playing. There’s a lot more information on the website now about the pieces we’re playing; there are video interviews with guest artists; there are audio clips. All of that is trying to warm up and make the experience more approachable.
I would say that when it comes to concert enhancement along these lines, it seems to us that there’s a lot more leverage in helping people really get the music. More so than in promotions like restaurant deals and parking passes and stuff like that. I really think that long term, there’s a lot more hay to be made by turning people on to the music than giving them a dinner discount.
CS: Does this increase sales for concerts with lower sales potential?
DS:I think so, by helping people really become familiar with it. It helps to establish expectations.
The other way of building attendance, of course, is retention. It’s keeping more of the people that you have, and it’s something that we’ve been trying to focus on. We get new audiences all the time. The challenge is keeping them. Something like 40% of all single-ticket buyers at a concert, on average, are new to our database.
CS: That’s astounding!
DS:So, the first job is actually finding out who they are. To capture their name and address, phone number and email address.
DS: It was in the past when we weren’t doing it for walk-up sales. Now we are. We have thousands more names now that we can market to than we did a year ago just because we’re capturing names.
CS:I should mention, too, the Philharmonic experiences a great deal of last-minute walk-up.
DS:Yes. Well, people can hop on the subway at lunch and come up here, avoid the phone service charge, and go back. 35% of our single-ticket sales are face-to-face, at the box office, which is much higher than any place I’ve ever worked.
Secondly, the overall increase in single-ticket sales is making it much harder to predict what the attendance will be. You know, it used to be you’d pretty much know a few months in advance of the concert what it was going to do. Now, it’s much more variable.
CS:You begin your season with a single-ticket sale – three or more concerts for $59 each.
DS: We began it three years ago in response to a research finding that the top two barriers people had to subscribing were (a) the need for greater flexibility in their concert-going schedule, and (b) the increasing price of tickets – and then we added a little promotional oomph to the offer to compel action.
The result was a one-week-only sale, with one simple price: $45. But you had to buy a minimum of three concerts, and you had to buy online – meaning that we would collect the email address and other customer info, and that we would avoid having to pay sales commissions to telemarketing. We timed the sale to take place the week after Subscriber Exchange Week, when subscribers can exchange their tickets or purchase additional ones, and the week before single tickets went on sale. The last thing to note is that we made the same offer to current subscribers – 3 additional concerts at $45 each – but let them buy a week in advance, which took care of any equity issues subscribers might have felt.And, by offering the sale after Subscriber Exchange Week, all the premium concerts were long gone and unavailable to sale customers.
The sale was promoted via email, direct mail, newspaper and radio, at a total cost of $45,000. The result was that we sold 3,500 subscriptions for 12,700 tickets and $568,000 in that one week, a week that in prior years had brought in about $20,000 in sales. We were particularly gratified that 48% of the sale participants were brand-new, first-time names to our database. We wondered if the sale had cannibalized future single ticket sales, but looking at the households that participated in the sale, we saw that $514,000 of the $568,000 was incremental new money.
In the second year, we increased the price to $49 and cut back on the advertising, focusing exclusively on e-marketing and direct mail. We learned that without the advertising, sales dropped. So, this year we boosted the advertising, but also increased the price to $59, and sales were back to their prior levels. I should add that we have seen, consistently, that half the buyers each year are first-timers. So it’s working very well at inducing trial. The challenge, again, is retaining them. We find that we’re able to renew about 1/3 of the sale customers into a subscription the following year; I was hoping for higher retention, but my for-profit colleagues tell me 1/3 retention from this type of promotion is pretty darn good. And, of course, on a lifetime value basis, it is still very profitable even at that level of retention.
CS: Is there a correlation between the concerts sold during this sale and sales of concerts throughout the season?
DS:Yes. You find this also with our Create-Your-Own sales. You can look at what people are buying in advance and that gives you a clue. But it doesn’t account for the snowstorm that’ll come up and suddenly all that last-minute sales go away.
CS:I did notice last year, we were pulling commercials rather late for concerts with modest goals that were selling surprisingly well. There was powerful momentum driving sales at the end of the season.
CS: Was the momentum engineered, driven by popular demand, or a little bit of both?
DS:No. I think that this past year we were doing concerts people want to see. And I think that people are recognizing that the quality of the music making now is just sensational. And that is probably what’s contributing to, I think, the good year that we had. Also, though, I have to say we have really, really worked hard on some different tactics for single-ticket sale.
CS:What would those be?
DS: The first major one is direct mail, which we didn’t used to do at all for single-ticket sales; now we do. And the other is e-marketing. Those are two things you can only do if you have the data. If you don’t know who your single-ticket buyers are, it’s hard to mail to them and hard to send them an email. So once we improved our data capture, we were then able to start marketing to them directly.
CS: Are you doing it this season?
DS:Yes. In a significant way, yes. Email for maybe a year and a half or so. We started the direct mail postcard effort in the previous year, sort of in the middle of the season. 2005-06 was the first full year of it. We just didn’t have the names we have now.
And our radio advertising is pretty good, too. Last year, we engaged F. Murray Abraham [Oscar-winner for his performance of Salieri in Amadeus].
CS: Yes. The spots themselves, but also the radio schedule, to capitalize on your last-minute sales pattern. If we ever cut a day from the radio schedule, we cut it from the front, not the back. So how much direct mail are you doing? How many names are you mailing to in a given drop?
DS: It varies, based on the repertoire, but between 25,000 and 50,000. And we did a test this year for three or four of these mailings, which are monthly. We’ve tracked it and we were able to prove that it actually did make a difference in sales.
CS:How far in advance do you mail the postcards for most of the concerts?
DS: We want to get it in the home about one and a half weeks before the first concert on a postcard, which will have four or five concerts on it. So it is definitely geared more for the last-minute buyer.
CS:And the e-marketing? When does that occur?
DS: We do a couple of different kinds of e-marketing. We have a newsletter called E-Notes that goes out on average every three weeks. That, again, we will try to do a week and a half or so before the first concert. Then if we have seats still to sell, we might do an e-blast discount promotion and those are usually to specific targeted small segments. And those will go out – depending on sales – usually the week of.
CS: How many email names do you have? How do you keep them current?
DS: We have 70,000 names. It’s actually 100,000 names, but only 70,000 that we consider good, clean, reliable. In terms of keeping them current, that’s basically relying on the customer to let us know if their email address has changed.
CS:So direct mail and e-marketing are making a big impact. Are there other tactics, perhaps begun several season ago, that are now beginning to pay off?
DS:I think that the efforts to warm up the image of the Philharmonic are part of the reason for the sales this past year. Hard to measure. We haven’t done any tracking studies to see if attitudes are really changed, although we should. But it’s my hunch that that’s part of the reason. We want to stay consistent with that strategy over the next year or two.
I wasn’t there pre-Lorin Maazel during the Kurt Masur or Zubin Mehta years. You can say that the imagery then was definitely trying to present something very serious. We’ve been moving away from that towards this more warmer, welcoming persona with more performance photography, as opposed to portraits, and with a warmer, brighter color palette. Our research suggested we should dial the Philharmonic brand in the direction of more involving, engaging, welcoming.
CS:If I am reading this in Texarkana, can I just warm up my orchestra and sell more tickets?
DS: I don’t know if that’s an issue in Texarkana. You just can’t take that strategy and plop it anywhere without knowing your market and knowing their preferences. There are a lot of levers you have at your disposal. There’s programming, there’s packaging, there’s positioning, and I can see where some orchestras might need to try one of those other levers.
At the Philharmonic we were a little more conservative in our concert presentations than in some other places.
In response, there are two new series that we added last season. One is “Inside the Music” – three concerts hosted by Peter Schickele that sold out on subscription. It was all about getting to know more about the music. Now, in that case, it was taking fairly well-known repertoire and giving you a little bit more about the workings of it to help you enjoy it more.
The other was “Here and Now,” which focused on the same sort of thing, but for contemporary music. Each concert consisted of one major new work. Steven Stucky began each concert with a 20-minute conversation with the composer, including musical excerpts, followed by a complete performance. Then we had a Q&A with the audience.
I do think our program book is getting friendlier and that the program notes are trying to be more accessible. Barbara [Haws, the Philharmonic’s archivist] has created displays in the lobby about the history of the Philharmonic. The ticket is worth it just for the display!
CS: I was there marveling at the printer’s plate of the Beethoven Ninth Symphony choral part, prepared by the Philharmonic for the first American performance. And it was more affecting in its way than looking at Beethoven’s manuscript. To be that close to a defining moment in the history of American music.
It’s my impression that the sales patterns for single tickets are changing. They were late when we started working together two or three years ago and now they’re really late.
DS: Well, a lot of that has to do with being on people’s radar for an impulse decision. You know, movies are an impulse decision quite often, as are other kinds of entertainment. And because of that – as you said earlier – we adjusted the advertising schedule so that there is more presence in the period when people are actually thinking about going, which is a couple of days before the event these days.
CS: I wonder, though. Are they buying late, but deciding early? Delaying the purchase?
DS: I think they’re making the final decision fairly late. Our Summertime Classics this year was a very, very last-minute thing, even though the sales throughout the whole campaign were very strong. People were stunned to walk to the box office and not be able to get into those concerts.
CS: What turned Summertime Classics around? I mean, a year ago they played at half a house. Now, they’re the hottest ticket in New York in June.
DS:We did some market research after the second year and found that we could make some changes in programming, and in positioning and targeting, that would improve sales. And, you know, we had two years’ worth of people who had come that we could market to for the third year.
CS: Sure. But it had to be more that past attendees. It was jammed! The house was almost always sold-out.
DS: I haven’t done the research yet. It just finished last week.
CS: We should mention that these are the Philharmonic’s final concerts of the season after the subscription season has ended. These are two weeks of “light classical” thematic programming. Two different programs a week, and a total of four concerts a week. Could you explain how the marketing effort changed in terms of the message and target audience for Summertime Classics?
DS:It was conceived to play all those light bon-bons, lesser-known nuggets of classical music that you might have heard on an Arthur Fiedler program.
And the marketing positioned it as a sort of Pops concert. We actually had a “pop”sicle on the brochure cover, trying to say classical orchestral Pops. But this year, we dialed the programming a little away from the lesser known works and more towards mainstream, very well-known classics like Tchaikovsky’s First Piano Concerto. Instead of something by Delibes.
Before we did this research, there was this great debate about how we should tweak the programming. The philosophy this year was still popular light classics, but the kind that someone who went to one of our subscription concerts might be comfortable at as well as someone who didn’t go at all.
In terms of positioning, we made it a little tonier, but still kept it the light, accessible summer thing. I mean, you’re not going to hear Bruckner or Mahler in this series. Yet, you will hear Tchaikovsky and Rimsky-Korsakov. The marketing materials were very classy, but definitely not Pops.
The third thing was in terms of targeting. What we saw, despite all of our efforts, was that the typical Philharmonic audience didn’t know about these concerts. People act on their interests by their behavior, which is buying a ticket to the Philharmonic. Then it’s a matter of developing that interest. So we focused more of the marketing on our house list than we had in the past.
CS: Which you had more data on this year because of the better data collection.
DS: Yes. Now, Maestro Bramwell Tovey, is without doubt, a key part of the experience. And the people who had come the first two years just loved him. What he brings is an engaging, avuncular, amusing personality. He talks from the podium. People think he’s funny and he engages them. The orchestra likes him and it’s definitely a very different tone than a subscription concert. So he definitely helps position it differently.
CS: Summertime Classics, as you mentioned, offers works that, surprisingly, you can’t hear in New York – even with all its competition.
DS: Yeah. I don’t know when we did the Tchaikovsky First Piano Concerto in subscription last, or the 1812 Overture. You would consider that standard, mainstream classical, but you’re right. We don’t play it on subscription that much.
CS: Someone reading this in another city would say, “Well, what’s the big deal? We do 1812 every year.” But that doesn’t happen in New York. I think that’s important to say.
DS: Or Rimsky-Korsakoff’s Capriccio Espagnole.
CS: A great piece. Hardly ever done anymore.
DS: Right. It seems so obvious when you say it. We don’t often learn from success and we forget a lot about what brought people into classical music in the first place, which are works like these.
CS: And how do sales for 2006-07 look?
DS: Our sales for 2006-07 are up 6% from this time last year.
CS: In subscriptions?
DS: Yes, in subscriptions. This increase is in revenue, and it’s pretty evenly distributed between Create-Your-Own and non-CYO. However, most of our CYOs come in later and, by the end of the campaign, it may very well be that CYO had the strongest growth.
CS: Likely from all of those people who came to the doors in the last season.
DS: Right. Converting them.