by Lisa Mackay
Working through a career in marketing and sales at various performing arts organizations, I became increasingly proficient at data analysis by necessity. It helped that I am a massive nerd and spreadsheets float my boat, so I eagerly sought out training, tools, and talent to go deeper into the data I had to work with. However, I am aware that not many arts managers, especially outside of marketing and sales, share my enthusiasm for data, and that most arts organizations make do with basic sales reports and annual budgets. Even in many of the larger organizations where I worked, decisions were often based on gut feelings or the bottom line.
Well, it is time for us to all embrace the magic of data analytics and data-driven decision making! There has never been a better or more urgent time for the arts to invest in data collection and analytics. In the precarious situation in which much of the sector finds itself, a lack of data will only exacerbate problems such as smaller audiences and unreliable funding. Without using standardized institutional data strategically, the arts sector is forced to rely on a short-term reactive approach to revenue and growth.
Run It Like A Business
In the for-profit world, the strategic use of data analysis is an urgent priority. According to Forbes in July of 2023, “data-driven companies are 23 times more likely to top their competitors in customer acquisition, about 19 times more likely to stay profitable, and nearly seven times more likely to retain customers.” It is no wonder, says the article, that “more than 90% of companies say they're prioritizing data initiatives in 2023.”
The arts sector must similarly prioritize the use of data and data analytics in the next few years. While our business models are not the same as those in the for-profit world, our lack of acumen in this area risks becoming a true liability, as we are left behind and unable to find our place in a data-driven world. As patrons become more familiar with the power of AI through digital banking, virtual assistants, and smart e-commerce, they will be expecting similar experiences from arts organizations.
Strategic Data
The advantages of adopting a data-centric approach are as strong as the disadvantages of not developing these skills. According to the same Forbes article, “moving organizational culture from gut feel, opinion-based decisions to evidence-based actionable insights is transformational,” and as David Maggs suggested in our last newsletter, our current situation is ripe for transformation. In a report published in February 2024, the Wallace Foundation declared that “unexamined and unfounded assumptions often hindered organizations’ ability to connect with audiences they hoped to reach. Data helped organizations uncover these assumptions.”
The use of data can help in many areas of arts management beyond the sales and marketing departments. There is an incredible amount of information in our ticketing and CRM systems that can guide decision-making and segmentation. But the true transformational use of data, as argued by a McKinsey & Company report from May of 2023, is in the areas of strategic priorities and growth.
In 2022 and 2023, McKinsey & Company worked with seven large arts institutions in the US to create standardized data analysis and determine its effectiveness. They concluded that “there are opportunities for art institutions to become lighthouses for impact and business analyses grounded in rigorous data and analytics practices and peer collaboration. Building data and analytics capabilities to capture these opportunities will strengthen the resilience of art organizations and improve lives and livelihoods in the long term.”
According to McKinsey, arts organizations need to start with their strategic priorities and determine what data points will help them measure success. A good data strategy must answer the questions ‘what is it we want to achieve?’ and ‘what does success look like?’
Gaining Insight
Often the answers can be found in metrics that look not just at results, but at trajectory. Finding the ratio of attendance to donors, for example and tracking that over several years can provide insight upon which programs can be developed and results measured.
Comparing the number of donors against the average donation amount can also provide a visible trend – whether it is helpful or not depends on the strategic priorities: do you want to be moving donors up in donation levels or attracting a larger number of donors at a lower average price? And are the results showing movement in the right direction?
As well, tracking the compound annual growth rate of an organization over several years can help smooth out data points and anomalies created by unique events or circumstances and point out the organization’s overall trajectory. This assists in discovering broader market trends or enables long-term thinking and planning.
Be Bold!
The challenges in implementing digital and analytics transformations in arts organizations are plentiful. Resources, time, data collection systems, and attaining talent are all significant hurdles in become a data-driven company. So too is a resistance to adopting “for-profit” technologies and systems and seeing business thinking as antithetical to art. However, technology surrounds us and there is nothing to be gained by continuing to run arts organizations without the tools at our disposal, and everything to lose.
As Matthias Rodder, the CEO of the Karajan Institute, has said “There is nothing to be fearful about – we have to be open and we have to go places that are unusual for us to unlock the value of technology. If we don’t do that, we will just be circling ourselves, and then we become completely irrelevant for the world out there.” His advice: “My approach would be to be open and curious and playful and build together.”
The Rozsa Foundation supports data-driven audience segmentation and analysis as part of our Audience Development funding program and supports attaining systems that better position organizations to develop and harness their data through our Arts Management Systems funding program.
Please get in touch with Funding Manager Ayla Stephen to find out more.
The Rozsa Foundation would like to better understand the current use of data, analysis, and technology in the Alberta arts sector. Please complete this brief survey (10 questions) to tell us how and when you are using data analysis in your organization. Thank you in advance!
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