Economics of fear and sustainable buying practices

Here's a hypothesis for consideration:

With news media reporting - in particular headlines - bleakly declaring the end to life as we know it for many months now, it is inevitable that people feel that the global financial crisis is having a major impact on their lives. This feeling is spawned by what we are told day in and day out at least as much as it stems from real losses in employment or investment portfolios.

Sustainable buying practices might well be on the rise. Those are practices not based on personal debt financing and overleveraging to "get things now". They are built on concepts of need, affordability, prioritization and saving for specific purchases. As this shift occurs it demands equally sustainable pricing practices, elastic enough to be responsive to the market and to ensure the survival of the business beyond this crisis. It means the "traditional" growth model has to be rethought in terms of "sustainable exchanges".

Any business model but especially those based on debt financing will have to be rethought in the context of needs, wants and sustainable personal - and business - finance.

I imagine it also means customer value propositions will increasingly include price related incentives, meant as short-term fixes to stimulate consumption. But in business only a few can survive on low price positions, the rest need greater differentiation to sustain their business. I imagine the competitive landscape will increasingly be thought to include alternatives across sectors of the economy, not just direct competitors within a specific sector.

If the above is so, what does that mean for how I think about performing arts marketing and sustainably developing audiences?

Thoughts on Making Buying Decisions

Some purchases we make require very little critical thinking - and some that would benefit from weighing options more carefully are made using overrides. ("I want it", "my neighbour has it already"). Some purchases receive a great amount of attention - often those that cost a lot of money, but not always.

One way to think about performing arts marketing is that we endeavour to recruit buyers who are willing to use convenient overrides so that they subscribe year after year, regardless of the specifics of the programming or other aspects of the overall customer experience.

This is important because arguably purchasing several live performing arts events in a single transaction (subscription) has significant implications for the buyer: time commitments, long terms planning and their financial capacity to pay in advance.

What are the circumstances required for someone to make a complex purchase in a mostly automatic fashion? And is it realistic with emerging audiences or is that a model of a time that is coming to an end?

Who knew a "word cloud" could be so fun

Check it out, using the words from this blog so far I got this: just click below.

Wordle: Strategic Moves

An Insight Sets the Stage

Here are a couple of quick updates on work I've been doing: The Audience Development Strategy's implementation by the NAC Orchestra continues to deliver excellent business results: In 2007 (year 1 of the strategy), we delivered the best campaign results in 19 years and exceeded several key targets. The 2008 campaign delivered the best results in 20 years.

The true test of a strategy cannot be merely success in its first year, when everyone is engaged, learning and changing. Keeping the momentum up to deliver to the increasingly ambitious targets in year 2 and looking toward the ever higher goals in each of the next 3 years is where the strategy and its implementation are tested. Especially important - as much of the media promotes a foreboding sense of apprehension about the unfolding global and Canadian recession - this strategy is built on the kind of deep audience insights that will help the Orchestra meet the challenges ahead.

On a similar note, I have been working with the NAC team on building a marketing strategy for the Governor General's Performing Arts Awards gala. Again, the rigorous, multi-faceted analysis phase which leveraged what we have learned about local audiences and expanded on that knowledge through additional research, is yielding the building blocks for an effective, multi-year, audience-centred strategy.

This latest project has been leading me to deepen the work on an insight about the tension between familiarity and discovery in buying decisions. It says that in order to buy performing arts experiences, the audience looks for things they are familiar with, but these are not necessarily the elements that will make the event memorable -which looks to be important to the repeat purchase decision. To be memorable, it has to deliver enough surprise and discovery. That means, if the marketing (or possibly the art) neglects the need for familiar touchpoints for a local audience, it can become exceedingly difficult to succeed in terms of marketing and sales.

The recent literature on neuroscience research has been interesting and may turn out to be enlightening - possibly helping to resolve this tension. In future posts I intent to explore these concepts further as I believe they are at the core of the marketing challenges faced in a world where the means of production and distribution are not only readily available but also cheap and global for all to use. Competition has to be thought of far more broadly now.