Success Story. Questions on Pricing. I thought these two recent articles were relevant to chapters in Management and the Arts on leadership, planning, strategy, access to the arts, and audience development and engagement.
A Good News Success Story
It was good to read in American Theatre that Karamu House  in Cleveland, Ohio, has navigated through one of its most challenging periods. During its 100-plus years, this organization has been employing arts programming as a unifying force in the community. Since 2015, the leadership of the organization was focused on bringing it back from the brink of insolvency. Al Heartley’s article includes observations and insights that can be used to launch discussions about leadership, planning, strategy development, and donor engagement. There is also a link below to what is titled “Strategic Plan,” but it is actually is a capital campaign document. The “Aspirations” brochure could be put to use in honing critical thinking skills by analyzing how Karamu House frames its ‘case for support.’
 Karamu is a Swahili word meaning “Place of enjoyment in the Center of the Community.”
When is the Price Right?
The Arts Professional recently reported on the results of a survey (n=629) of its readers on ticket pricing – a topic that can produce lots of opinions. (See pages 58 to 60 in the PDF of the survey results for information about the organizational characteristics of the respondents. However, only 294 responded to the question “Which of the following most closely describe your organization?”)
Taking the limitations of the survey into account, it still offers useful information that can be integrated into a class discussion. There also are numerous respondent comments that may help students see the range of opinions and philosophies people have on pricing. The article excerpted below was a follow-up posting dealing with a few critical questions on affordability, means-testing, and issues related to price vs value. A discussion focused on pricing strategies is valuable, especially as it relates to topics covered in the book on economics, marketing, and audience development.
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Four years ago the Cleveland theatre was losing money. Now, thanks to savvy, responsive leadership, it’s running a surplus.
“The fox knows many things, but the hedgehog knows one big thing.”
If you work in theatre management or in business as a whole, you’ve likely heard of Jim Collins and his book Good to Great, in which he explains that organizations that focus and invest in their core competitive advantage—the hedgehog’s one big thing—are what distinguishes a successful organization from the rest. Apple focuses on innovative technology, and Southwest on creating a superior customer experience. The focus on that core value is what drives the organization forward.
But as I spoke with Tony Sias, president and CEO of Karamu House in Cleveland, I started to consider whether this parable may apply well to organizations, but perhaps not to its leaders. It is my contention that a leader must be a fox and a hedgehog: To succeed you must have a focus on the one thing which allows the company to thrive, while also having an array of tools in your toolbox.
This is what I discovered when speaking with Sias about one of the most overlooked success stories in our field: how a century-old theatre of color, once in a state of crisis, has been revitalized and rejuvenated. In a time when there are questions about the durability of theatre organizations, Karamu House’s journey over the last four years serves as a case study to the importance of management and leadership operating in tandem to pull the company from the brink of collapse.
Link to the full article – https://www.americantheatre.org/2019/09/30/how-karamu-house-went-from-deficit-to-durability/
Link to Strategic/Capital Campaign document – https://karamuhouse.org/uploads/editor/files/Capital_Campaign_BrochureFINAL.pdf
If the problem is ‘making the arts affordable’, then the key question must surely be ‘for whom?’
And this question leads to others. Should all admissions or seats in a theatre be affordable? If not, then which and how many? Should all performances and events be affordable? Or should you keep back some tickets to sell at an affordable price to people who aren’t on the mailing list or don’t have the ability to plan and pay months in advance?
One respondent to the recent Art of Pricing survey commented: “Setting aside allocations for audience development is very important – identifying people who may not be able to afford even the entry level price or who may need more of an incentive to take a risk. It’s important however, that ambitions for these audiences are long-term – not just parachute them in when it serves a purpose.”
Versions of the ‘pay what you can’ approach appear to be popular, where people are trusted to make this judgement for themselves. But in our experience, except when carefully targeted, such as through outreach programmes, these schemes usually just lead to very low revenues and typically are disproportionately used by frequent attenders who would otherwise pay full price. As a sector, perhaps the time has come to challenge the extent to which organisations who trumpet their “accessible” pricing are truly widening and diversifying their audience base.
Link to the full article – https://www.artsprofessional.co.uk/magazine/article/price-reason-low-engagement-or-just-excuse
Link to the ‘Art of Pricing’ survey mentioned in the article – https://www.artsprofessional.co.uk/pulse/survey-report/pulse-report-art-pricing