Data-Driven Marketing Gets Dramatics Results
Data-Driven Marketing Gets Dramatics Results
Every smart marketer wants to be data savvy when it comes to their campaigns, but not every marketer has the resources to do so. The whole conversation around using data intelligently often seems to cut out smaller businesses or nonprofits that don't have the budgets to invest in technology and services to collect, cleanse, and analyze customer information.
And yet, small businesses can benefit enormously when implementing data strategically. Jonathan Waller, the marketing director at the nonprofit Baltimore-based troupe Everyman Theatre knew this from his previous job at an off-Broadway company in New York City called the Vineyard Theatre. The Vineyard's direct mail strategy initially includes sending 90,000 to 100,000 mailers, which Waller and his colleagues began whittling down to 50,000 strategically-deployed pieces. In the process he increased the theater's revenue. “It's a wonderful balancing of freeing up resources while getting more bang for your buck,” he recalls.
When Waller arrived at Everyman last May, the company—in its 22nd year—was in the midst of a move from an old bowling alley to a state-of-the-art, three-floor theater in Baltimore's Westside. It was a huge step up; the Baltimore Sun reported that at the time the company was also increasing its annual budget from $1.7 million to $2.3 million and adding four new staffers.
Because of its small budget, Everyman's traditional marketing strategy had been mostly broadcast messages: postcards, radio spots, and e-blasts. The company also had partnerships with the local NPR affiliate and got good coverage from local newspapers. Everyman's direct mail strategy usually equated to mailing to its entire list.
Waller wanted to take a different approach to marketing the grand opening celebration of the new location, as well as future individual performances. So, Everyman began doing some rudimentary data mining. The first step was signing on with Axial360, a provider of direct and database marketing services. Then, Axial360 incorporated a predictive modeling solution from KXEN to build an analytics framework that could provide customer insight quickly and without the usual heavy costs. Axial360 began building out predictive models after cleansing Everyman's databases—mostly be identifying and eliminating duplicate names.
“There are a lot of small clients like Everyman Theatre that can benefit from data-driven marketing solutions,” says Lu Cheng, Axial360's VP of data strategy. “The challenge with these smaller clients is money. The major players in the current market won't be able to do the service at a price that's possible for them.”
Cheng adds that normally building out predictive models takes weeks, but it took Axial360 roughly a day using KXEN's technology, which automates the model-building process.
Everyman's grand opening spurred its push to incorporate customer data, but the real test was mailers for upcoming plays. It was here that Waller wanted to tap into the theater's loyal clientele.
“We've seen a massive growth in our subscriber rate,” he says. “We have almost 5,000 subscribers and an unprecedented renewal rate: 90% every year, which if you look at the trends across the nation, theaters are questioning whether that subscriber model still works.” He attributes this loyalty to the company's artistic programming, which includes major plays like Tracey Letts' August: Osage County and Yasmina Reza's God of Carnage; Everyman recently began its run on Suzan-Lori Parks' 2002 Pulitzer Prize winning Topdog/Underdog.
Waller and his team began experimenting with its mailings last August to promote the play Time Stands Still. It sent 9,500 mailings, which had a total response rate of 1.6% and a 4.1% response rate among clusters that Axial360 predicted would be most likely to purchase tickets.
Last October, with the premiere of the play Heroes, Everyman Theatre tinkered a little more with variable data. The company sent 10,000 mailers, some of which were personalized with messages to a specific person stating she might want to see Heroes because she'd attended a previous play that was named on the mailer. The mailers also offered a discount for the next Everyman performance.
“It had custom text and a picture from the show they previously saw,” Waller says. To test the efficacy of this personal touch, Axial360 also examined how well a select number of the mailers with generic messages sent to random members of the list performed: the subset garnered only a 1.7% response rate. By contrast, the response rate for the personalized mailers was 8.4%.
In terms of Everyman's key metrics—ticket sales and revenue—Waller saw tremendous growth. “We saw an 80% increase from Time Stands Still [to Heroes] in both revenue and tickets sold,” he says. “The ROI was 552%.
What was particularly interesting for Waller was that for God of Carnage in March 2013, Waller decreased the mailers to 7,000—yet saw the same revenue results. Now the question he has is whether he should spend an extra $1,000 to mail 10,000 pieces or whether he can consistently get the same result with 7,000 pieces. Waller suspect he can: with Everyman's current play Topdog/Underdog, Waller sent out 9,500 pieces again, but saw the same results as he had with 7,000 pieces.
He's still trying to find the balance where he's optimizing efficiency without wasting mailings. Part of this means targeting some of the clusters Axial360 has identified as key Everyman patrons; so far, there are three key customer segments, which Waller was reluctant to discuss publicly.
However, he mentioned that one segment that surprised him was married, fairly affluent males who've been living in the same residence for more than 15 years. “This is our strongest demographic,” Waller says. This, he says, is key information. “You can try to speak to them [outside] a theater publication. So maybe we find they like golf or the Orioles. We could be smarter about where we spend our very limited budget trying to target the people most likely to come.”
Waller hasn't yet had the opportunity to apply that strategy just yet. The first step for Everyman was learning who its best customers are; now the theater company is in the process of trying to figure out how to approach them.
“Just the other day, we identified something really cool,” Waller says. Namely, a group of people that has seen all three shows this season, but who hadn't yet subscribed. “If someone is seeing a majority of our shows and paying full price, we can contact them—we know they like coming to Everyman Theatre, but we also know they're overpaying because if they subscribe, they'll pay less and get more benefits. We can make a more specific argument to them to join us.”