TWC's Return to Live Performance Strategy: Part 1 (Listening, Framing, Forecasting)

The Washington Chorus’ Return to Live Performance Strategy

Part 1: Listening, Framing, and Forecasting

?

NB: This is the first segment of a three-part series of posts of how The Washington Chorus worked to retain and grow our audience of fans and friends in our return to live performance events in winter of 2021. We’re a midsize nonprofit with a pre-COVID era total annual operating budget of about $2.4MM and a dedicated staff of nine (the Executive Director serves as the organization’s Chief Marketing and Communications Officer); we typically produce between four and six unique annual live choral productions (some of which repeat multiple times, IE our “Candlelight Christmas” concerts) and collaborate with the National Symphony Orchestra and other ensembles.

It is June 17, 2021, and nobody really knows what’s going to happen next.

For an arts nonprofit that has relied on live music event revenues to account for 40% or more of our total annual operating revenue for years – and a healthy if modest-sized annual audience of between five to seven thousand households to keep connected and engaged in our work, even while live events are shut down – the last year and three months have been trying.

Although our core capability of live music concert production had been hamstrung for the last sixteen months, we’d enjoyed some success with digital product offerings: two short musical films that reached over 2,500 customers, a new digital marketplace for personalized music video messages, online adult ed classes for thousands of choral singers across the globe. And while our innovative pandemic-era digital creation earned us critical acclaim and promising financial results – more than doubling our number of annual donor households and record donor retention and the strongest individual contributed revenue single year performance in five fiscal years, buoyed thankfully by additional local and Federal COVID emergency grants and loans – we also experienced, like most live arts nonprofits, a precipitous drop in earned revenue: an 84% year over year decrease from FY19 (our last full pre-COVID live season) to FY21 (our entirely digital season).

The good news is that with approved COVID vaccines on the market and falling infection rates, there’s reason for optimism on the return of live performance. But forecasting for audience return in a global pandemic is unusually hard because the truth is, nobody really knows when, how, or if audiences will come back.

***

“So When Will You Be Willing to Come Back? And When Now?”

We knew that to understand where our customers were with respect to their comfortability and interest in returning, we needed to talk to them, and to understand the broader industry picture of customer behaviors as we return to live.

So we launched a comprehensive audience survey, targeting two segments: loyalist buyers and recent occasional buyers. Our questions were straightforward, seeking to understand program interest areas, willingness to purchase current and prospective new product offerings, and timeline for customers’ willingness to return.

Of all that we assessed, two things jumped out:

-?????????One, that 73% of respondents indicated they’d be ready to return to our live concert offerings by October (and that number jumped to 88% willing to return by December).

-?????????Two, that our in-person Candlelight Christmas concerts at the Kennedy Center remained as popular as ever, as the overwhelming product offering most of interest to our customers.

Knowing that customers’ self-prediction of future behavior is usually not an especially reliable indicator of such behavior, we took this with a grain of salt. Then we broadened the aperture by looking to see what the rest of our field was seeing and hearing by diving into well-regarded arts market research firm’s Audience Outlook Monitor project.

By surveying tens of thousands of cultural loyalist customers at hundreds of cultural organizations – both in regional and vertical cohorts – the Monitor had quickly become a go-to resource for arts leaders in the US and well beyond.

Attending their June 14 executive briefing, researcher Alan Brown reported on the “strong upward trends” across various categories, including the increase in the number of respondents eating out regularly (70-80% respondents having done so in the last week, which the firm viewed as an important analogous indicator), an increase in comfortability in attending an indoor cultural event, and an increase in the percentage of respondents ready to go out to live indoor cultural events by the fall (only 10-15% of respondents said it would not be until January 2022 or later that they would be ready to do so), as well as the overall high vaccination rate (90-95%) of these loyalists.

The question of likeliness to return to live arts was complicated, though, by the emerging divergence on acceptable conditions for going out: are masking, vaccination, and distancing requirements net positives or negatives for audience return? It depends on the cohort and geography and other key factors, as well as household vulnerability to a potential serious health outcome. These trends, Brown suggested, indicated that “we’re starting to see more people willing to go out, but a divergence on the conditions under which they’re willing to go out.”

“We Opened and Closed Our Eyes a Few Times. Then We Named the Assumptions and Moved.”

As a large-scale symphonic chorus, we have a business and operational model very different from that of our friends in performing arts centers, orchestras, and opera companies; let alone dance, theatre, jazz, or other live arts. We also rely heavily on collaborative and co-presenting models in addition to self-producing our own series of concerts, modest though our number of annual self-produced concerts may be. In 2018-19, a recent full pre-COVID representative season, TWC – on our own – produced nine concerts for a total audience of just over 4,000 households.

We took a moment to consider our audience survey, the Wolf Brown/Audience Outlook Monitor research, and our artistic and business strategy in this context. And we came to a few conclusions:

1.??????Christmas 2021 felt like a relatively safe bet, but nothing prior to then did. We decided against producing any live in-person concerts prior to December of 2021.

2.??????The convergence of factors around potential mask and proof of vaccination requirements was likely to further splinter our audience into divergent segments. Setting our own health and safety policies, and aligning with our venue partners on theirs, and then communicating these policies clearly and frequently to our customers – and providing opportunity to understand and address customer concerns – would be key.

3.??????Even with the many types of anxieties our customers shared with us, there was also an overwhelming expression of interest in returning to live that constituted sufficient demonstration of likely demand for us to move toward our December return target, while an important minority of customers also expressed interest in continuing to have digital product offerings available.

We knew there would be risks and a range of unknowns – both known and unknown – and, on reflection, we also decided to put the following markers down as we moved toward return to live:

-?????????We had a hunch that a more dynamic pricing strategy might be useful in maximizing the revenue potential of these first shows back, especially given the inflationary environment at hand.

-?????????We hypothesized that an expansion of total show date and time offerings for our “Candlelight Christmas” product from four or five unique shows to eight shows – provided we did not fall below the per-show financial breakeven threshold – would support driving strong results in both retention and acquisition. We believed we could bring back at least one-third of prior loyal Christmas buyers (a slightly lower retention rate than in prior years), but also knew that a strong acquisition strategy mattered.

-?????????We frankly had no idea what might be in store with respect to mask and/or proof of vaccination requirements from our partner venues, nor exactly what such requirements might portend for audience willingness to return, especially given the divergent segments emerging on this question from the Wolf Brown research. We also hadn’t yet heard, of course, of the variants named Delta and Omicron.

?

Creating a Forecast, With an Asterisk

Then it came time to finalize some assumptions and put this all on paper.

Given our analysis of pre-COVID in-person Candlelight Christmas historical results with respect to per-show capacities and gross revenues – both of which we knew to be highly sensitive to day, date, and time – and the Wolf Brown data, we believed that a 60% house capacity average across all planned eight “Candlelight Christmas” performances, at an average ticket price revenue roughly the same as in 2019, was a forecast we could stand behind with reasonable assurance. While this represented a 19% decrease in average house capacities from the average of three years of pre-COVID Christmas shows (and a 33% reduction in average gross revenue per show, from $82,500 to $55,000), this felt to us like a reasonably reliable forecast based on current conditions. We also checked in with other key competitors on their return to live projections, and saw that ours fell squarely in the mid-range of where our competitors landed with respect to capacity forecasting and pricing strategies on late fall and early winter return to live forecasts.

Now we needed a strong strategy and superb execution, including a doubled-down commitment to clear communications and exceptional customer service. The asterisk? That all of this could change, at any moment.

[Part 2 in the series on "Strategy, Service, and Execution" continues on February 23, 2022; and Part 3 on "Results: Where We Landed, and Why" publishes on February 28, 2022]