The perverse incentive

This is something I've been ruminating over for the last week and a half, based on a post from Andrew Taylor. Read his post here.

Andrew defines a perverse incentive as 'a policy that is intended to promote one outcome, but that instead creates the opposite, or fosters a countervailing negative effect.' Immediately the applications for this phrase within marketing departments and budgets for theaters came to mind, which I commented on when I first read the blog and want to elaborate further.

Marketing is the under-appreciated sidekick of theater. I have seen many organizations with marketing budgets so minuscule that they can barely mail to all of their mailing list. And those budgets keep getting trimmed in deference to the art. Unfortunately that is a downward spiral, as most companies don't then trim income projections for ticketed income and individual giving. Marketing directly contributes to those bottom line numbers.

So a case study:

Problem, you can't balance your budget. You're a theater company and the prevailing attitude is to protect the art at all costs. So you trim from the marketing budget, because for some reason the a large portion of the theater profession does not embrace the connection between marketing and a ticket buying audience. It's the art that brings people in the door, right?

Your marketing director creates a plan for utilizing whatever meager budget they have and praying for enough media coverage to make up the difference.

Marketing is the game of hitting a receptive audience with multiple messages and reminders, driving them to eventually purchase tickets or donate money (when coupled with a fundraising ask). Adam Thurman posted a great case study of the White Sox's season ticket campaign here.

Now of course, some of your existing audience can be classified as a fanatic consumer. They will get that season brochure piece and purchase tickets immediately, filling in their calendar at once. That's a small segment of your audience. The rest will put that on the table or in a pile and forget about it, because everyone receives hundreds of marketing messages a day - even the fans.

To attract the rest you need to hit them with reminders. One way you do this is through press. Though at this point, print is shrinking. You can't count on getting your show reviewed any more, let alone getting that preview article to goose early ticket sales.

Without any money for advertising, what's a good marketing professional to do? Well you turn to e-mail and social networking - aka "free marketing tools." Which are free in the monetary sense for the most part, but extremely time sensitive (aka $$). Not only are they time sensitive, if you haven't laid the ground work you aren't going to get a ton of success.

Seth Godin blogged about the saturation point of the internet a little while ago. I can't find the post right now, but his point was this: Although the internet is unlimited in scope, your audience has a limited ability to take in new messages. To combat their saturation of content you have to provide year-round relevant and interesting content. As a theater consumer, interesting content is not that your tickets are on sale. I stop reading those messages there are too many of them.

Ultimately, what ends up happening is you do not bring back as many of your past ticket buyers as you should. Not because they aren't interested in your work, but they simply miss your message in the hundreds of other messages they have received. You also, without advertising, press, and targeted street marketing efforts, don't attract as many new audience members.

This effects your ticket income. And unfortunately your individual contributed income as well, as the development ask at the end of the year is only effective if these individuals have received relevant and interesting messages throughout the year. In the coming year you face even lower income projections and often you trim your marketing budget again.

See the cycle?

Now, how do you break it? As a company, you choose shows that are well known and bring in a lot of new audience members and you trim other budgets in order to maintain a level earned income.