Rx for the Arts

The slogan “the customer is always right” has traditionally been a guiding principle for business. Yet prosperity has often made business forget the roots of its success and lulled companies into complacency. Now the predicament that U.S. auto manufacturers found themselves in 20 years ago may provide some lessons to the arts industry, which is facing hard times after a period of unprecedented growth.

Foundation and government funding for the arts has plummeted, and, worse yet, audiences may be in decline. According to several recent government studies, interest in the performing arts is dropping among younger generations. One book that could be of enormous benefit to struggling arts organizations, Standing Room Only: Strategies for Marketing the Performing Arts, will hit bookstores next month. Published by the Harvard Business School Press, the book was written by Philip Kotler, a professor of international marketing at Northwestern University’s Kellogg Graduate School of Management, and Joanne Scheff, an adjunct associate professor of arts management at Kellogg. The authors spent nearly four years on the project, and their research and advice provide insight into what’s gone wrong within the arts industry along with a multitude of ideas about how to strengthen organizations to withstand future shocks.

Kotler first considered doing the book in the late 1980s, but he put aside the idea for several years before returning to it in 1992 and joining forces with Scheff. Scheff did most of the arts industry research, and Kotler provided the applicable marketing strategies. Some arts executives will no doubt find the book a disturbing, if not downright unpleasant, read. The first chapter paints a grim picture of what has happened to the arts in America over the past three or four decades. Between the mid-1960s and mid-1980s, say Kotler and Scheff, we witnessed an unparalleled “proliferation in the number of performing arts organizations,” fueled in large measure by a seemingly endless supply of money from individuals, foundations, corporations, and government.

But in the late 1980s this largesse began to evaporate, and, as Kotler and Scheff point out, arts organizations are now grappling with spiraling expenses, huge deficits, shrinking income, and stagnant customer growth. The authors didn’t have to look hard to find compelling data. The U.S. orchestra industry’s annual aggregate deficit, for example, ballooned from a mere $2.8 million in 1971 to $23.2 million in 1991. It’s projected to top $60 million by the year 2000. (The Chicago Symphony Orchestra is one of the few that isn’t running a deficit.) Across the country, report Kotler and Scheff, nearly half of the nation’s 400 regional theater companies are also operating in the red, and many dance companies are radically cutting their operating budgets just to stay afloat.

These difficulties have been exacerbated by a significant shift in American lifestyles. Two-income households are now the norm. Leisure time declined 37 percent between 1973 and 1987, from 26.2 hours a week to 16.6 hours. Consumers also have a variety of less expensive leisure options, most notably the VCR. Add to this bleak picture the sharp drop-off in arts education and the severity of the crisis becomes crystal clear.

Kotler and Scheff are by no means complete pessimists, though they believe little will change until arts organizations understand what it takes to operate a business successfully in a crisis. Above all, they argue, arts groups must adopt customer-centered marketing strategies. “Art does not exist in a vacuum. The essence of art is in its communication with the audience member. Therefore, arts organizations must shift their focus to that communication. They must shift from a pure product focus to one that balances the artistic decision-making process with audience needs and preferences.”

Both Kotler and Scheff are irked by the elitist image that continues to cling to the arts in America and by the poor job arts organizations are doing to dispel that image. “No one enjoys being made to feel stupid,” says Scheff. A producing organization faces a no-win situation when its audiences are confronted with art that’s difficult to comprehend and little effort has been made to help them understand or connect with the art. Standing Room Only quotes writer Marya Mannes on the subject: “The artist of today says to the public: ‘If you don’t understand this you are are dumb.’ I maintain that you are not. If you have to go the whole way to meet the artist, it’s his fault.” The essence of successful arts marketing, explain Kotler and Scheff, is helping the artist and audience to at least meet each other halfway.

Other marketing-related factors will also help determine which arts organizations survive. It’s imperative that the customer’s experience be as pleasurable as possible. That includes everything from offering customers a variety of ticket-buying and exchange possibilities to making certain every contact the customer has with the organization is courteous and helpful.

Those at small and midsize arts groups having a hard time making ends meet may read Standing Room Only and conclude that they have neither the funds nor the human resources to implement the book’s strategies. But Kotler and Scheff say that successful arts marketing doesn’t always require large staffs or expensive consultants. Scheff says she was particularly impressed by a theater company that went to an auto repair shop and asked the owner to check which stations were preset on car radios. The theater then used that data to help decide where to make its advertising buys. In the end, say Kotler and Scheff, arts organizations must be prepared to reevaluate the way they do everything if they want to survive. “Arts organizations must continually change to retain their effectiveness. They must change their internal structures, their ways of doing business, sometimes even their missions. Above all, they must listen to their constituents.”

Art accompanying story in printed newspaper (not available in this archive): Joanne Scheff and Pilip Kotler photo by Nathan Mandell.