My Butt Among The Seats

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Thanks to the hard work of Inside the Arts mother hen, Drew McManus, Butts in the Seats has a new look.

And if I can figure out how to fully exploit some of the new features I see on the new post creation page, hopefully it will result in a better experience for readers.

Some elements of the new look represent a bit of an evolution/maturation in the way I view my online presence. When I started the blog, I wanted to maintain a sense of being an Every Man, or in this case, Every Arts Manager. I didn’t want people to read the blog and think that the things I was talking about only really applied to one particular discipline of the performing arts or one particular geographic region.

As a result I tried to stay vague in some of the details of my writing, often to protect the identities of some of those I was criticizing, but also to try to give readers a sense that the same situation might apply to them. The gymnastics I had to engage in to avoid providing details was often tougher than writing the posts themselves and probably added an element of awkwardness to my prose.

My plan is to move away from that a bit more. Some generalization is likely to remain in my writing, but I will try to provide more identifiable and specific references in the future.

I am also more identifiable on my blog. Except for a small headshot in my section banner on the central Inside the Arts site, there wasn’t any indication of what I looked like. On the new site, there is a 3/4 body shot of me in my theatre in the About the Author section. I make no warranties about whether knowing what I look like will enhance your reading pleasure, but there it is.

I have also found myself coming across a number of interesting links related to the subject of arts management lately. However, there is more information than I can blog on in a timely manner so I have finally relented and created a Twitter account for the blog at http://www.twitter.com/buttsintheseats. Links to my blog posts will appear there alongside other information pertinent to arts management I wish to share.

Hope you like the new look. Thanks for reading!

Info You Can Use: Variety of Thoughts On Dynamic Pricing

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It seems like dynamic pricing may start to creep into the non-profit performing arts sector as a common practice. Stories about it are starting to crop up more and more frequently. When the topic of changing prices based on market demand comes up, people often use the phrase “like the airlines do.”

So should I be surprised when today I saw a story about how Opera Australia got advice about dynamic pricing from the airline Qantas?

In the beginning of July, there was a story about dynamic pricing in the Los Angeles Times. Chad Bauman at the blog Arts Marketing did a good job addressing the recent move toward dynamic pricing in a post earlier this month.

Of course, who knows. Maybe dynamic pricing is just a hot story because newspapers see others during stories on dynamic pricing. Still, it is a conversation non profit organizations need to be having, if only to decide it isn’t for them.

I actually started a discussion on the Performing Arts Administrators’ group on LinkedIn back in May. I had some concerns about the approach to pricing suggested by a guy I was partnering with on a show. It ended up that I misunderstood what he was proposing.

There were only a few responses and the conversation appeared to have run its course when I went away on vacation at the beginning of June, but when I returned I found a slew of new responses. I think it reflects some of the concerns and thoughts people have about the practice.

One of the first responders, Mark Wladika, said the practice of variable pricing left him feeling manipulated, though allowed if people were aware from the outset that “hot shows will see an increase,” it might represent a middle ground. Another commenter, Omar Miller, noted that if the maximum variation was only going to be $5-$10, the potential revenue gains may not be worth the loss of good will if audiences felt manipulated. A concern for the good will of the community was echoed by a number of commenters.

As the conversation went on, the need to communicate the policy clearly seemed crucial as well as limiting it to single ticket purchasers and exempting subscribers. It was noted that lowering ticket prices at the last minute has the potential to alienate those who bought earlier at a higher price and end up reinforcing a procrastinating behavior.

Joanne Bernstein, a Chicago based arts consultant, advised that the decision to change a price be based on a rise in demand rather than proximity to a performance date. She argues that people are busy and should not be penalized for not being certain about their plans just because it happens to be less than 24 hours before a performance.

Maggie Christ brought up the legal issues surrounding variable pricing citing NYC laws that require if a range of prices is implied, the maximum price as well as the minimum price is required. For example, you can’t say tickets starting at $15 without noting that the top price is $500. Which, of course, gives a pretty good indication about the cost of most of the tickets and the probable location of those $15 seats.

Toronto based arts consultant, Linda Rogers, pointed out that some arts organizations are limited by the capacity of their ticketing systems. Airlines and many Broadway houses using services like Ticketmaster and Telecharge have a greater ability to alter their ticket structure in response to demand than most arts organizations. I have to agree there because the process we have to follow to charge a higher price on the day of the show is pretty clunky.

One comment I particularly liked came from Kara Larson, an arts consultant from Portland, ME.

“Two important points: 1) People value what we do differently. Correctly differentiating initial prices and dynamically raising them in response to demand allows people to decide for themselves what seats, timing, and price is right for them. The ones who want to wait for a sure-fire hit will often happily pay for the privilege. 2) Being responsible stewards of the organizations people charitably support means making the most of opportunities to earn revenue given our programming. Passing up opportunities to make revenue means asking for more donated support. And vice versa.”

In a later comment she made a pretty thought provoking suggestion about a different way to approach dynamic pricing:

“The base interest is understanding demand in our markets well enough to price ALL our tickets optimally. Building a rational projection model and adjusting it when we discover errors should be our first and most important task regarding pricing. Only when we err (significantly, in my opinion) do we need to correct by pricing dynamically. Dynamic pricing is an admission that we got the prices wrong in the first place, so badly that it’s worth it to the bottom line to invest in a new system for correcting them.

At the last arts center where I implemented dynamic pricing, the revenue increase was significant in the first season and less in the second. To me this was good news, because we had taken what we learned in year one and applied it to the base ticket pricing, so had less correcting to do at the last minute. Remember, whenever you price upward dynamically, you’ve already sold some (and often most) of your tickets at the wrong price.

I suggest that instead of spending what seems, industry-wide, to be an increasing amount of time debating the merits of dynamic pricing we all spend some time collectively developing much better predictive models for pricing in the first place.”

Some members of the group are moving forward with using dynamic pricing. Steve Carignan, Executive Director of the Gallagher Bluedorn at the University of Northern Iowa says he is moving forward with dynamic pricing this season. He asks,

“Performing arts has for a long time been linked to a discount mentality (devaluing our product and trying to cut our way to a smaller loss). Is it our customers who are uncomfortable or us?”

Liz Olson of the NYU Skirball Center for the Performing Arts made a comment that gave me cause for concern.

“…I don’t think that foundations or donors will look at variable ticket pricing fondly. They like when we are able to show self-sustainability but from what I have seen donors tend to punish non-profits they deem as operating “too much like a for profit.” (as seen in the endless debate about overhead costs and executive pay at nonprofits.)”

Does anyone have any insight into the validity of this? Have any foundations made comments of this general sort? Another commenter said she didn’t feel this was the view foundations and donors viewed attempts at dynamic pricing. However, neither offered much in the way of explicit evidence for either view. I hate to say that from what I have read, either could be the dominant perception at this time. Or perhaps the practice isn’t wide spread enough that foundations have developed a clear policy and approach.

Info You Can Use: Shall I Pay Thee?

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Our friends at the Non Profit Law Blog linked to a presentation intended to be a guide about compensated time for non-profits. The reason the presenter, Veneable LLP, this is so important is because issues related to compensable time are becoming increasingly prevalent.

– Employers are failing to identify, record, and compensate “off-the-clock” hours spent by employees performing compensable, job-related activities.

– One third of surveyed respondents indicated that their organization had been hit with a wage and hour claim in the past year.

– Today, wage and hour class actions outnumber all other discrimination class actions combined.

– According to the U.S. Department of Labor, more than 80 percent of employers are out of compliance with federal and state wage and hour laws.

The presentation is in PDF format so you can proceed at your own speed and there is a helpful chart at the end that summarizes it all. The laws about compensable time are a little tricky, especially related to travel.

Among the topics the presentation addresses:

      -If an employee works unauthorized over time, do you have to pay them? (Yep)

-Waiting time vs. Off Duty – Do you have to pay an employee who is waiting for a task? (phone to ring, machine to be fixed, package to arrive)

-Difference between compensable and non-compensable “on-call” statuses

-Are employees paid when they attend lecture/training/conference/meeting?

-How comp time can be used in lieu of over time pay

-Are employees paid if they are encouraged to perform work/volunteering for a charity?

-Is your internship program legal?

-What types of travel require compensation? What types don’t? Are employees paid for work they complete on their laptops while traveling?

-If an employee is required to take their work-issued Blackberry or other work related equipment home with them, is any compensation needed?

-Do you have to pay employees if a snow storm makes the street impassable for two days?

As I mentioned, some of these issues are a little tricky and nuanced. Those dealing with employees who do a lot of traveling may find it useful to download the guide as a quick reference. I could quote you back the answers on a lot of these issues, but I would be hard pressed to explain all the travel rules.

Trespassing Won’t Make You Many Friends

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The Non Profit Quarterly had a piece by Simone Joyaux which I suspect reflects what will be the necessary practice in fund raising for the future.

She asks fund raisers to stop asking their board members to trespass on their family and friends.

Trespassing is when you ask your friends or colleagues to give gifts and buy tickets . . . just because they are your friends and colleagues. This is the personal and professional favor exchange. This is obligation to a person rather than a cause. It’s a lousy way to raise money. It’s offensive. It alienates the asker and the askee. And it’s not sustainable.

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How often have you, as a fundraiser, asked your board members to name names? How often have you asked them to bring in a list? Did you ask your board members to write notes on the letters that you planned to send to their list?

I say again, trespassing is a bad idea. It alienates board members. It alienates the friends and colleagues of board members. It doesn’t produce loyal donors or sustainable gifts.

Joyaux advises asking board members to suggest those they believe might be interested in supporting one’s organization and then inviting them to learn more about the organization. In the process of interacting with these people, one can gauge whether they are interested in what the organization does and perhaps what specific manifestation of the mission they may be disposed to supporting. From there you can work on cultivating a relationship with them that may see them more involved with the organization.

This suggestion isn’t terribly earth shattering or new. I have heard Kennedy Center President Michael Kaiser say this is essentially what he does to garner support for the organizations he leads. When I first heard him speak about how he evaluates what people may be interested in and only really approaches them in relation to their interests, it seemed a less daunting and more considerate approach than soliciting everyone for every cause, even though it is much more time consuming.

As Joyaux notes, existing supporters like board members are probably going to be more comfortable implementing an organizational relationship building approach. After all, they invested the time to develop their personal relationships with friends and colleagues. While they may be willing to donate the fruits of that investment to their favorite non-profit, those relationships were built on entirely different circumstances which may not be entirely compatible with a request for support of a non-profit.

Now that social media allows people to be approached for their support every time they turn on a computer or pick up the phone, it is likely that only those organizations that take the time to cultivate a relationship with people will earn sustained support.

Not that social media won’t be a good tool for keeping people engaged with the organization’s work. It may just not be the strongest method for the organization and individual to gain a good mutual understanding and appreciation of each other’s priorities.

N.B. My apologies. Some how I ended up omitting the link to Joyaux’s piece when I first posted this entry.