Ideas from the team


3 KPIs You Should Care About: 1. Customer Retention

Key performance indicators (KPIs) are crucial to understanding and improving a business. These little nuggets of data (which are often condensed into a single statistic) can provide insight into how your organization is performing against given objectives.

On their own, KPIs are pretty interesting. However, when we compare and track them with other KPIs, both within the arts industry and outside it, these insights become revelatory. It’s at this point you can see where there are opportunities and risks, giving you the insight to know where to invest your time and resource.

One topic that is coming up more and more for the arts industry is building resilience. Industry trends and data suggest that the not-for-profit sector funding model is changing, and the focus is now shifting to encourage organizations to build a resilient business model, rather than supporting them to continue doing what they’ve always done. There are lots of proof points for resilience, from staff retention to whether you’re maximizing ticket yield.

At Doing Things With Data: Building Resilience and Audiences, our event recently held in Belfast, we looked at the three KPIs arts organizations should be worrying about: customer retention, web sales and advance ticket sales. These three KPIs matter because improving these KPIs will directly improve your organization’s resilience by increasing your loyal customer base and improving efficiency.

In this series of blog posts, we’ll look at these three KPIs, and use aggregate data from our client base so you can see how the sector is doing. We also have some quick wins which you can action in your organization, to set you on the right foot for improving these KPIs. First up, customer retention.

Customer Retention

The Customer Retention KPI is the number of first-time customers who make repeat visits in the two years following their first visit.

It’s around 5 times more expensive to get a new customer than it is to keep an existing customer. When you consider the cost of sending an email, traditional mailing or flyer to an existing customer versus what is needed to run street advertising, television and newspaper ads, the return on investment is vastly different. Getting new audiences through the doors is important for any business, however keeping your existing customers is just as important and less expensive.


*data from the Spektrix Benchmark Report 2017

Venues using Spektrix are currently retaining an average of 32% of first-time visitors the following year. This varies from 21% to 38% across the various organization types.

Customer retention quick wins

1. Personalize comms for first-time customers

Email automation and dynamic content are great ways to make sure your first-time customers have all the information they need before their visit, ensuring that the first email they get from contain messaging that is personalized for them.

The example above from The MAC in Belfast is a great example of answering all those questions first-time customers might have before they visit your venue. By sending new customers this information in advance, they’re making sure their new customers feel welcomed and have the very best experience when they make their first visit.

2. Incentivize a second visit

Just like the retail sector, the arts sector should offer incentives to encourage a second visit. If you produce your own work and can give discounts on tickets, great! If you’re a presenting house, why not offer other incentives such as a free glass of wine in the bar or for families, why not offer free ice-cream for the intermission?

Bradford Theatres offer a free upgrade to their VIP bar and a glass of champagne to encourage second-time visitors:

3. Program according to demand (just like Apple)

Apple have a retention rate of 94%. How do they do this? Well, in addition to producing great products, they manage the demand for their products. By releasing a new phone every year, rather than three new ones in one go, they match their product releases in line with customer demand.

The equivalent in the arts is to program shows based on demand. Every so often a hit show comes along that attracts a huge number of first-time customers. Often these are shows that we can worry a little less about selling. So rather than investing your time in lots of marketing activity, invest time in a follow-up strategy for these new customers. Think about what show to advertise to them for their second visit. Ideally, you’ll work with your programming team to achieve this. And if you can, program another hit event within 6 - 12 months so you have a great offer for your new customers.

Have you introduced any special strategies to help increase customer retention at your organization? If so, we'd love to hear from you in the comments below.

We'll be releasing the next two blog posts in the "3 KPIs You Should Care About" series soon.