American Orchestras Need to Get “Sticky” to Meet Challenges:
November 17 2015 - 9:00AM
Business Wire
Unprecedented empirical study shows continuing
consumer interest and ways to enhance subscriber relationships
A study from Oliver Wyman, “Reimagining the Orchestra
Subscription Model,” commissioned by the League of American
Orchestras, argues that American orchestras can meet their
challenge to retain subscribers and meet revenue needs by exploring
methods used in other industries (e.g., retail, grocery, fitness),
that build “stickier” relationships with customers.
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There has been a shift away from subscriptions and toward single
purchasing. Subscriptions are a key source of revenue, so the shift
presents orchestras with difficult choices. Some larger orchestras
have offset declines by increasing prices, but that strategy is
unsustainable and the tradeoff may be reaching a break point that
could trigger a far sharper drop in revenues. The report recommends
that the current subscription model must be revitalized and it
identifies strategies that orchestras of all sizes can use to
increase customer loyalty and participation.
The data-rich study – the first of its kind for American
orchestras - draws on ten years of data from four million customers
across 45 orchestras of varying sizes and a profile and preferences
survey of 4,000 people who attended an orchestra concert in the
last five years. The final recommendations are informed by a
dynamic market simulation that tested the willingness-to-pay of
1,000 people making 10,000 purchasing decisions in order to reveal
the relative attractiveness of various package features.
Some interesting facts uncovered by the study:
- Satisfaction remains high: Consumers do
remain broadly satisfied with the orchestral concert experience –
90% of each patron type is satisfied with their orchestra-going
experience and subscribers are the happiest with 77% reporting they
are “very satisfied.”
- Consumers are not abandoning the
orchestra for other art forms or entertainment options; but they
are disenchanted with traditional subscription models.
- Millennials are not as price sensitive
as many have assumed. To attract them, orchestras should consider
expanding their use of social media, apps, and “bring-a-friend”
programs that rely on the high level of interconnectedness of those
young consumers.
- It’s about the relationships:
Orchestras should explore methods used in other industries (e.g.,
retail, grocery, fitness), that build “stickier” relationships with
customers.
“We are grateful to Oliver Wyman for their contribution to our
understanding of subscription dynamics. The study provides a
fact-based platform to support the experimentation and innovation
taking place at orchestras today,” notes League of American
Orchestras President and CEO Jesse Rosen.
Partha Bose, Partner at Oliver Wyman, sees the report as further
evidence of Oliver Wyman’s deep commitment to the communities in
which the firm works. “The recommendations contained in this report
combine deep analytical rigor and sensitivity to the unique
challenges of the entire range of America’s orchestras, large and
small. They are cultural mainstays of the cities and towns in which
they are located, and we hope the report helps them to flourish and
to continue to enrich all of our lives.”
The report is available from the League of American Orchestras
here and from Oliver Wyman here. A version is also available on the
iTunes App Store here.
About the League of American Orchestras
The League of American Orchestras leads, supports, and champions
America’s orchestras and the vitality of the music they perform.
Its diverse membership of approximately 800 orchestras across North
America runs the gamut from world-renowned symphonies to community
groups, from summer festivals to student and youth ensembles. The
only national organization dedicated solely to the orchestral
experience, the League is a nexus of knowledge and innovation,
advocacy, and leadership advancement for managers, musicians,
volunteers, and boards. Its conferences and events, award-winning
Symphony magazine, website, and other publications inform music
lovers around the world about orchestral activity and developments.
Founded in 1942 and chartered by Congress in 1962, the League links
a national network of thousands of instrumentalists, conductors,
managers and administrators, board members, volunteers, and
business partners. Visit americanorchestras.org.
About Oliver Wyman
With offices in 50+ cities across 26 countries, Oliver Wyman is
a global leader in management consulting that combines deep
industry knowledge with specialized expertise in strategy,
operations, risk management, and organization transformation.
Oliver Wyman is a wholly owned subsidiary of Marsh & McLennan
Companies [NYSE:MMC]. For more information on Oliver Wyman visit
www.oliverwyman.com. Follow Oliver Wyman on Twitter
@OliverWyman.
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version on businesswire.com: http://www.businesswire.com/news/home/20151117005968/en/
League of American OrchestrasRachelle Schlosser,
646-822-4027rschlosser@americanorchestras.orgorOliver
WymanElisabeth Egan, 617-424-3721elisabeth.egan@oliverwyman.com
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