What can arts & culture leaders learn from a customer loyalty guru?
Many arts and cultural executives know and perhaps use the Net Promoter System (NPS) developed by customer loyalty master (and friend of TRG Arts) Fred Reichheld, but as 2022 unfolds, there is new information to uncover about what it truly means to put customers and employees at the center of our recovery and future resilience.
I’m honored to have Fred join me for a deep dive on customer loyalty on Jan. 26 in a special 45-minute TRG 30 (10 a.m. MDT), and you should join us via this link. We will discuss the economic power of the relationship you have with your audience. We’ll also talk about Fred’s new book, “Winning on Purpose: The Unbeatable Strategy of Loving Customers,” and his take on the love that’s required to run an effective business today.
You heard me right: love. Maybe the Beatles had it right, and “all you need is love” as you work on: Revenue recovery. Sustainable working culture. Managing change. Our eyes should be trained on these as we move toward a new future for arts and culture. I am confident our future is bright if we stay focused here. And where is “here?” It’s where our people are — our customers, communities and teams. If we stay focused on them, they’ll help us co-create a brilliant emergence from a time of crises to a time of creative capability.
And that can change everything.
Conversations with Fred: Listening to arts customers, and acting
Fred’s new book, published in December, both underscores and elevates his pivotal lessons on earning customer loyalty, which I started utilizing my first year teaching the master’s level arts management course, Marketing in the Arts, at Southern Methodist University. I included them because my marketing approach — and that of TRG Arts — is based on loyalty in consumer management, and Reichheld is the corporate loyalty innovator, a fellow at Bain & Company and the founder of its loyalty practice. He is also a best-selling author who has counseled thousands of companies around the world on their adoption of his Net Promotor System. These industry titans include Mercedes-Benz and Cummins, as well as digital innovators Peloton and Warby Parker.
Eventually, I was fortunate enough to get to know Fred personally, and voila: I learned he’s an arts geek (a singer)! Fred and I talked extensively at his Cape Cod home in 2018 for the six-part “Loyalty as a Linchpin” video series about the application of the Net Promoter System to the arts. He wrote about it here. He then helped TRG Arts develop the first NPS in the Arts curriculum.
The first cohort of organizations, which included both executive and artistic leaders, was in theatre, non-profit and commercial. Our focus? Growing audience, donor and community loyalty, as well as long-term relationships that fuel sustainable revenues and businesses. What did we learn that this requires? Listening. More specifically, listening to consumers and communities, and then acting, based on what was heard. Many arts and cultural executives are aware of the Net Promoter Score — some 60% of global arts organizations we surveyed in 2019 used it — but only 15% of those implementing NPS actually digested the data, shared it internally, created change as result, and crucially: closed loops with consumers about the change. You can see this data and our further discussion in this early pandemic TRG 30 featuring Fred.
And speaking of the pandemic, as it turns out, this cohort’s work developing internal mechanisms for listening and action served them well as they entered and worked through the crises we faced. They had muscles developed to deploy surveys about specific aspects of digital experiences and teams practiced at making decisions based on that data. This made them more comfortable communicating directly with their customers.
But let’s be real. It wasn’t all easy for these artistic and executive leaders. Even with this cohort, the tension between “art” and “consumer” existed. What comes first? The vision for the art or consumer desire? How comfortable are we with talking directly with our communities and delivering what they need? Our visions and missions and artistic sensibilities tangle this all up … and yet: I’m quite certain Steve Jobs wasn’t worried about his vision as he TOLD us what we needed in technology while simultaneously creating in Apple one of the most customer-centric businesses ever known. Art and consumption can co-create and co-exist.
“People do”: A Focus for the New Year
Welcome to 2022. Welcome to 2022? Welcome to 2022! I keep saying this to myself … in different ways, at different times. Do you do this too? I say it to remind myself that we’ve entered a new year, or to curse specific aspects of starting this new year, but mostly (actually), I do it with gratitude. Gratitude for the hardships and the unexpected joys, and the lessons of the last two years.
The biggest lesson, for me, has been about personal and professional focus. I suspect it might be the same for you. For me and my business, the pandemic brought focus on relationships (the organizations and people we serve) and necessary income and investment to keep our business whole. It brought focus on our employees — our team of wonderfully committed and understandably-a-little-weary people serving this creative sector. And crucially, it brought focus on how to ensure we keep people at the center: our clients, the sector at large that we serve, and our employees.
#datadoesn’tdopeopledo
People. Do you and your organization feel the same? You likely know I’ve been convening with a group of fifteen global chief executives for the past year, in deep conversation about the pandemic and its impact and requirements for change. At the end of 2021 I asked this group: what are the biggest issues your organization will face in 2022–23? And the top three issues they reported included:
1. Revenue recovery
2. Sustainable working culture
3. Managing change
Revenue recovery. For most of these organizations, revenue comes mostly from people — ticket bookers, members, subscribers, donors, class and gala attendees and more. These are consumers of a particular art form — whether we like to call them that or not — and they have been disrupted mightily. Existing audiences, donors and others continue to make hard decisions about live participation during a pandemic. Digital channels created opportunities to engage existing consumers, and we met new people (!!), but many organizations made these channels free or available at a much lower price than the live experience. This reduced organizational desire to continue investment here. It’s a shame: there are so many existing and new people who engaged this way during the pandemic that would continue to engage digitally in years to come. Do you know what the consumers of your art need? Have you asked? I’m confident your organization’s revenue recovery is tied to their needs, not the other way around.
Sustainable working culture. The Great Resignation has hit the arts and cultural sector hard. Recent data presented during an Association of Performing Arts Professionals conference session on workplace culture suggests that even now, almost 30% of our employed sector believes they’ll leave it in the next five years. This, after arts and cultural organizations already faced a stunning employee loss. That’s the bad news. The good news? It’s causing much reflection by leaders about “why,” and a desire to create change. The group of chief executive leaders I mentioned previously spent several months diving into the habits required for personal resiliency and how those habits could be part of new organizational working culture. Front and back-of-house: it all needs reimagination. And new generations of workers — artistic and administrative alike — are insisting on it. Have you asked your team what they need? I’m confident your sustainable working culture should be informed by your team, not the other way around.
Managing change. Here’s what I believe: I believe that before we address any post-pandemic-anything-else, we must change the way that we prioritize our consumers, our communities, and our teams. And here’s what I know: If we focus on these people right now, we will LEARN about where future focus must come.
If you agree, it’s time to act like it.
I encourage you: Sign up for this upcoming #TRG30 with Fred Reichheld. Lastly, you are always invited to subscribe to my newsletter, “And here’s to you!,” where we explore the business of creativity together.
