It seemed like our return to the stage would never get here. Now that a vaccine is available, arts groups across the country are having internal discussions about resuming in-person performances in the 2021-22 Season. Also, there has been a lot of innovation over the past year and audiences have embraced new ways to engage with your art.
I’ve spoken with dozens of arts managers over the past few weeks about their ideas and concerns for resuming in-person performances in the fall. Common questions I hear are:
How quickly will our audience return? How can we retain flexibility if the audience doesn’t return as quickly as we planned?
Should we keep or grow digital offerings once we’re back in our venue? Are there other business practices we would like to change when we reopen?
How are we going to manage cash flow with patrons using pre-paid credit to purchase their tickets? How can we afford to build up the staff needed to generate revenue before that revenue comes in the door?
These are complicated questions with variables unique to every organization. Even so, here are some thoughts to get your own conversations started.
The need for flexibility
If your organization wasn’t already qualified to run a crisis management business before the pandemic, you probably are now. Arts managers have spent the last eleven months trying to plan in a volatile, unprecedented environment. Scenario planning has become an essential job skill. While no one can predict the future, flexibility is the salve to soothe uncertainty.
So how can you give your organization the flexibility to adapt? The most common approach is to identify in advance where you could reduce expenses if revenue fails to meet budget. This may be a process you were already doing pre-pandemic. It usually focuses on what some consider “non-essential” spending like marketing, fundraising, and education programs. (Full disclosure: I am not one of those people!)
What I’m about to propose may be controversial, but I challenge you to dig deeper. Don’t automatically consider the schedule or repertoire inviolable. Think about large variable expenses driven by delivery of services. That could be programming, production costs, or community programs. Map out adjustments you can make without reducing service to your patrons.
That may sound impossible because of locked-in obligations. It’s easy to fall into the “but what about” trap. Don’t limit yourself before exploring your options. Be up front with your subscribers that programming and schedules may shift around as public health guidelines advise. Talk to artist managers about flexibility in scheduling guest artists. Make your own artists aware of the situation and communicate how you will support them throughout the season.
Some plans will be flexible while others will not. Having a list of options in advance can greatly reduce your anxiety. Articulate the outcome of your likely “worst case scenario.” Removing the unknown keeps our imaginations in check and clears our mind. The bottom line is to identify and negotiate now where flexibility exists so you can sleep better later.
Don’t waste this opportunity to implement change
It’s cliché but true – “When life hands you lemons, make lemonade!” The global pandemic is (hopefully) a once-in-a-career opportunity to reset some practices and expectations that have plagued your organization for years. Do you return to printing a 64-page program book or is this the right time to move to a digital version? Do you return to mailing tickets (single tickets and subscriptions) or do you charge a fee for mailing with a free print-at-home option? Do you offer your pre-show lectures an hour before the performance in the lobby or move them online in the week of the performance?
“Because that’s the way we’ve always done it” is rarely an acceptable justification for doing something a certain way. “Let’s shake things up just for fun” is an equally poor approach. You probably shouldn't change everything you can. Some ways of doing things may already be the best approach. However, that should not stop you from asking questions!
Change takes planning, communication, and even some data. Sometimes, managers run ahead with change because it’s the right thing to do but without making sure those around them are ready. Implementing change requires much more preparation beyond the change itself. Four strategies for implementing successful change are:
Engage your board (or at least your Board Chair) in the discussion of a potential change. If you can’t convince anyone else to support the change, you may find yourself hung out to dry down the road.
Few people love change. Even fewer people love unexpected change. Introducing and setting expectations well in advance of the change is essential to successful implementation. This could be your “rip the Band-Aid off” opportunity if you have a thoughtful communications plan.
Be prepared to hear from patrons who disagree with the change. Have a system in place to track and respond to any complaints that are expressed. Try to avoid falling into the trap of “tons of people said” or “we’ve gotten a lot of calls.” Be specific. More times than not, pushback is much smaller than perception.
Sometimes change doesn’t work the way you expect. It happens! Set an amount of time (weeks or months) to live with the change before deciding to implement it long term. This gives lukewarm supporters comfort that no permanent decisions are being made from the start. The trial period gives patrons some time to adjust to the change. It assures upset patrons that the change is not a done deal (yet). It also sets a date for the organization to evaluate if the change is having the desired outcome.
With some planning and a group of advocates at your back, change is possible!
Managing cash
Discussing cash flow is when I hear the greatest anxiety in the voices of arts managers. Most (but not all) arts organizations rely on next year’s subscription revenue to have sufficient cash to operate through the rest of the current season. Every arts manager knows this is not ideal. However, it’s a practice that works well enough … if it’s not interrupted. The pandemic certainly qualifies as an interruption.
There is a perfect storm coming that could lead some groups into the Bermuda Triangle of cash flow. Subscription sales will soon begin for the 2021-22 Season. Significant amounts of deferred revenue are currently sitting on the balance sheet of many arts organizations. Staff resources were cut months ago to manage expenses and now create a gap in the organization's ability to implement plans. Less cash will come in the door as patrons use their credit.
While there have been significant efforts to convert deferred revenue to donations, most groups still have a significant amount remaining on their balance sheet. It’s not a stretch to deduce that patrons inclined to donate their credit have already done so. Everyone else is holding that amount for future ticket sales.
That’s where things can get dicey. No matter how strong subscription sales are for next season, there will be less cash coming in the door. If patrons are saving their remaining credit for future ticket sales, then find a way for them to do so before 2021-22 tickets go on sale. Before you panic, this may be easier than it first appears.
Working with Nave Strategies, Delaware Theatre Company has developed a low-cost, high-impact program to get patrons to use deferred income in the current fiscal year. We have named this the “2020-21 Season – Take 2!” The abbreviated season will consist of eight outdoor shows featuring one or two actors per show. Admission is not sold by seat but by boxes that accommodate 2 or 4 people. Box boundaries will be marked on the parking lot to maintain social distance. Patrons will even bring their own chairs and refreshments.
One email was sent to a small group of patrons on February 10. As of February 15, nearly 10% of DTC’s deferred income has been redeemed for this series. A larger direct mail campaign will begin at the end of February. Stay tuned for updates in the coming weeks!
Not only will these performances meet a demand for safe, in-person performances, it provides an opportunity to reduce DTC’s deferred income exposure in the current fiscal year. Subscription renewals for the 2021-22 Season will begin in early summer (when patrons are attending shows) providing a fresh influx of cash before the start of the next season.
If you desire a partner in addressing these questions and more, email me at jlnave@navestrategies.com. I would welcome the opportunity to listen and share my thoughts with you.