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Process Knows Its Limits

A post on Drucker Exchange, When Process Is a Prison, got me thinking about ticket office operations. I am sure the content of the entry could be applied to a hundred things that happen every day in arts organizations, but that is what bubbled to the top in my mind.

“Procedures can only work where judgment is no longer required, that is, in the repetitive situation for whose handling the judgment has already been supplied and tested,” Drucker wrote in The Practice of Management. “In fact, it is the test of a good procedure that it quickly identifies the situations that, even in the most routine of processes, do not fit the pattern but require special handling and decision based on judgment.”

I pretty much started the trajectory of my arts management career in the box office a couple decades ago. Since then the rules governing exchanges, returns and other transactions have seemed to move from matters of policy and procedure to matters of judgement. These days having a ticket office manager you can trust to make good judgments on behalf of the organization is as, if not more, important than their technical ability to troubleshoot the computer system you are using to sell your tickets.

Granted, box office operations are probably technically more a matter of policy than procedure, but Drucker’s general sentiment applies.

The ticket office has always been viewed as the first place of contact with customers where good manners and efficient processing of orders is prized. But now customer service interactions are almost more important than the product being sold, given customer expectations and their ability to almost instantly report their disappointment to 1000 of their closest friends.

Consistently providing good service doesn’t necessarily mean treating everyone equally because everyone views their situation as special and may expect you to have some degree of awareness of those circumstances. This is why customer relationship management (CRM) software is viewed as so important by businesses at large (though you wouldn’t know it when you call your cable or cell phone provider). Many arts organizations don’t have the resources to support sophisticated CRM software so human judgment and good note keeping becomes all the more important for them.

Perhaps my perception of the change is based on the fact that I have gradually moved into a position of generating the policy rather than enforcing it and I am a big softy. But I suspect there are many others who will confirm that things have changed from the 70s and 80s when it was “No Refunds, No Exchanges, No Exceptions” for non-subscribers. Now it is more akin to “No Refunds, No Exchanges, Except for the Exceptions.”

As Drucker is quoted, the best procedure recognizes those times that are exceptions to the procedure. I think that some times changing environment requires you to recognize that it is no longer useful to maintain set policies and procedures in favor of general guidelines and good judgment.

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Info You Can Use: When It Is Okay To Punish Your Customers

A couple weeks ago I wrote a post in which I decried the practice of many companies who offer better rates to new customers but provide no reward to long time customers.

Right on cue the next day, MIT’s Sloan Review published a piece that analyzes the transactional relationships people have with different types of business and discusses which can get away with treating long term customers poorly.

They acknowledge the fact that it can often be more costly to find new customers than to retain the ones you have, but note this is not true for all types of business. They use examples of cable and cell phone companies who provide services that are difficult to change versus a highly variable situation where someone may prefer to shop at Lowe’s, but will often purchase from Home Depot because it is move convenient to the drive home.

Lowe’s and Home Depot have to constantly work to retain customers and attract new ones while cable and cell phone companies can get away with raising rates mid-contract. The article authors say even if you are getting an offer to buy a new phone at a discount from your current service provider, it isn’t as sweet a deal as a new buyer is being offered.

Despite using the common terminology of “subscriber,” performing arts organizations don’t have the same luxury to treat current customers poorly that cable and cell phone companies do. I am sure it is no revelation that performing arts organizations operate in a far more competitive environment.

While depressing to contemplate, it was interesting to read the rationale that punishing customers makes good business sense.

Some customers are worth more than others and some customers are a greater drag on resources than others. Even if you don’t act on it, cultivating the ability to identify what policies are causing you to lose money can be valuable.

There might be some good lessons for arts organizations here. For example, some banks have started charging people to use lobby services and for receiving statements in the mail and made using ATM and receiving statements electronically less expensive because it costs more to maintain a physical presence and pay people.

Perhaps performing arts groups should make it more expensive to buy tickets in person versus online, rather than vice versa, as is the case in many places these days.

On the balance sheet, the answer is clear. However, since cultivating relationships are often viewed as the most important function arts organizations can fulfill for their community, perhaps it is better not to provide disincentives to personal contact.

But is that relationship something your customers value or is it something you have decided they value?

You should know the answer to this because if they do value good relationships and service, that is more expensive than just having someone at a desk. The training and retention of staff who provide good service and the database to support them requires a greater investment than just having someone available. If people don’t really value personal service, then maybe it is wiser to push them toward online ticketing and reduce ticket office staffing.

So here is the conclusion the authors came to:

“Specifically, we discovered that, most of the time, rewarding and acquiring new customers creates the most value. Under select circumstances, however, attention should shift to the retention of existing high-value customers….In markets that have a high degree of both flexibility and value concentration, companies should focus on rewarding their own customers — in particular, their best customers.”

The examples they use of high flexibility and value concentration is retail shopping, rental cars and airlines where people have many options to choose from and return customers will often spend greater amounts than just casual shoppers. They suggest reward programs for high frequency customers.

I translate that over to the arts as trying retain and reward subscribers and donors. The arts already acknowledge that these groups are high value individuals and need to be provided preferential treatment. So we have been doing something right all along!

Except that the authors don’t really address the question of what to do when your customer base is aging out. The article really just deals with optimizing your income from customers based on where your product/service falls on the continuum of flexibility and value.

There is an assumption that you have a product for which there is a demand. They address the question of how to treat your customers when you get them, not necessarily how to get them.

It is encouraging that the article validates the basic model many arts organizations use with their customers. The challenge that is still before us is offering a product people want and an rewards program that they value.

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Stuff To Ponder: Subscriber Rush Tickets

Since I have started a new job I am in the process of evaluating every document, process and interaction my organization undertakes. One of those areas is customer service, of course.

For that reason, an article I came across via The Drucker Exchange is really resonating with me. In a blog post titled, The Dark Side of Customer Experience, Monique Reece opens with a joke we can probably all relate to.

The longer version is in the post, but basically a guy dies and is shown heaven and hell and given a choice between the two. On his visit to heaven, everything is sedate and lovely. Hell is a veritable Mardi Gras party. After the doors close on Hell, the guy tells St. Peter he chooses Hell. The doors open and it the scene is the stereotypical hellish landscape.

Upon wondering what happened to the party scene, the man receives the response “Well,” said St. Peter as the doors closed. “The first time you came to visit you were a prospect. Now you’re a customer.”

Reece cites some of my biggest pet peeves– the introductory rate that rewards new customers and makes the person who has been loyal for 10 years, enduring price increases, feel like an idiot for sticking around so long for no recognition or reward. As Reece notes, there is actually more of an incentive to separate your relationship and then renew it.

The performing arts version of this is giving cut rate discount tickets to last minute purchasers, suggesting a certain amount of foolishness on the part of those who planned and purchased ahead of time. Some arts organizations sell large amounts of rush tickets at rates lower than those of subscribers who have committed to many shows in advance.

It just occurred to me moments ago, why don’t performing arts organization offer Rush tickets exclusively to those who have already purchased two or more tickets?

This would have multiple benefits 1- It rewards people who committed in advance; 2- It turns those people into recruiters for your show when they invite their friends along; 3- It gets people you already have a relationship with paying closer attention to your emails or social media account that you are using to communicate this discount, providing an opportunity to get them excited and mention other shows.

My suspicion is that attending a show on a half price ticket thanks to two people who purchased weeks in advance is a better model of behavior than attending alongside two other people who also decided to attend because tickets were half price.

It probably also reinforces many elements of the advance purchasers’ self-image if they know their friends were only able to attend because they were stalwart supporters of the arts organization.

The only real problem I can see with this idea is reserved seating. Offering rush tickets in this way appeals heavily to a social element which is compromised if everyone can’t sit together.

Granted, it illustrates the appropriate outcome associated with paying half price on the day of a performance versus full price in advance. Still the emotional disappointment of not being able to sit next to ones guests could supplant the acknowledgement of this logical consequence.

General admission events are good to go though.

This is not the direction I intended to go in when I started this entry. I like this result better.

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Would You Know If Your Candy Machine Was Broken?

As you might imagine, there are a few vending machines scattered around our campus. The one behind our building get cleaned out regularly when we have rental groups with large numbers of kids or our own shows are in tech week.

A number of months ago, whenever I would try to get a granola bar from one end of a row, I got a message to make another selection. A little experimenting showed this was the case for a few of its neighbors. Across campus near the administration building there is a machine in which a whole row returns the make another selection message.

I usually don’t see the guy refilling the machines or when I do, I am generally in a rush. But I finally said something to the guy about a month ago. He thanked me for the report and said he would tell the technician to take a look at it. Then he commented that he had noticed on his computer inventory that those items weren’t selling.

It is people like him that make me really nervous.

Part of the reason I finally said something to him was because I started to realize he had no real investment in his job. The situation had existed for about 6-9 months.

Even if he wasn’t the same person who was tending to the machines when the problem started, there were many signs one existed. Not only was the fact that part of the machine broken conspicuous when they were the only things ever left when students and kids literally emptied the rest of the machine, but the items that weren’t selling were actually noticeably sun-bleached. And of course, he admitted his inventory was telling him that items in both machines never sold.

Wouldn’t you suspect a problem if an entire row of candy bars in a machine never sold, yet the Snickers were moving well in the sites around the campus?

The reason people like him make me nervous is that I start to wonder what problems I am not being told about. The vending machine guy may not be paid well and doesn’t feel like he has any incentive to make sure the machine is producing revenue efficiently. I begin to wonder if people working for me might feel something similar. My concern isn’t so much about revenue maximization as ensuring patrons, renters and others who use the facility don’t have a negative experience.

One of the most difficult tasks businesses offering services seem to have these days is training people to be aware of problems and be proactive about either attending to them or reporting it for further action.

I generally feel like I have a good staff that pays attention to these things. This afternoon my technical director noted that the dust from nearby construction had infiltrated our ticket office and the room needed to be cleaned. But there have been times when I have noticed a glaring problem and wondered why none of those who pass that way regularly, including cleaning staff, students and faculty, attended to it in some manner.

Of course, a lot of the responsibility resides with those who train and supervise. It is incumbent upon them to discuss the values of the organization, mention the types of behavior that is expected and outline the available courses of action.

It is also important that those courses of action be viable and legitimate. If a problem is reported and results are not forthcoming, there is less incentive to report problems in the future. The same if the resources to effect the solution are rarely available or there is a perception that making the extra effort on behalf of the organization is not valued.

If a solution can’t be effected immediately, the timeline for the response should be communicated clearly–e.g., “The leaky toilet will be replaced when the building is closed for the summer, in the mean time, this is the temporary stopgap solution we suggest.”

In the non-profit arts, frequent communication about what sort of environment and experience the organization wishes to provide is important given the large number of volunteers that assist with so many tasks. Even long time volunteers may forget the overall vision because they are not exposed to it as consistently as regular staff and they may volunteer at a number of other places, each with its own vision of things.

Most of all, supervisors and other leadership need to emulate the values they espouse with their own actions. If they aren’t excusing themselves to assist someone who looks lost or bending over to grab a candy wrapper blowing by, it is more difficult to get others to do the same.

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