Email Marketing: Reactivation campaign for performing arts center sees 738% ROI

SUMMARY: With a list of 550,000 names, 30% of which were duplicates, the Denver Center for the Performing Arts was struggling to be relevant to them all.

Learn how the center embraced data, got to know its subscribers and used that knowledge to launch a campaign that targeted 40,000 lapsed patrons and saw 738% ROI in email alone, and a 210% increase in clickthrough rates.

by Courtney Eckerle, Reporter

CHALLENGE

The second-largest performing arts center in the country, The Denver Center for the Performing Arts, serves over 750,000 patrons with Broadway hits, cabaret shows and locally produced plays.

The challenge is in appealing to all of those people within the subjective medium of art, according to Jennifer Nealson, Chief Marketing Officer, Denver Center for the Performing Arts.

"That's the challenge we had as an organization, was moving from being mass marketing to identifying who our customer is and how can we be more relevant to them," she said.

With her role consisting of "all of marketing, all of sales, all of customer experience, and all of the front of the house of all of our theaters," she has seen every angle of working within the arts since joining the organization a year ago.

"One of the important things about organizations like this is that they are artistically driven," she said, so what has been exciting to her as a marketer is that, "it's not just about revenue. It's about giving access and having the world understand what it is that arts can do."

However, being so artistically focused can be the reason that organizations "like ours aren't as … knowledgeable about their customer interests as perhaps they should be," Nealson explained.

The issue that can arise, she said, is that "like with so many [organizations], particularly non-profits that don't have a lot of resource, or sophistication with their marketing … are what I call 'spray and pray.'"

She explained that with a massive database, made even larger by many duplicate names that come with their transactional-based system, the process for sending DCPA emails became uniform and stagnant.

"When we have something to sell, we put together an email and just keep emailing those same people over and over and over," she said.

CAMPAIGN

The campaign really began for the DCPA, she said, when it set out to learn how to use customer data to understand, and then identify key groups.

The end goal of this being, "so that we could … create more value as a brand and as a product," she said.

Brand value had to be infused by a sense of being relevant to the consumer.

"It sounds so easy, too, like, 'Oh, we were mass marketing and now we're marketing with segments.' But really breaking that down … the first step was to start to really understand who our customer is."

For this campaign, the team collected data, cleaned their entire database of duplicates and reached out to lapsed subscribers with an offer enticing them back.

Nealson and her team set out to change their marketing strategy with data, and begin to understand their customer. Ultimately, to transform the way that the DCPA communicates with their email subscribers.

Step #1. Use data to understand your customer

"There are significant fundamentals that we are putting into place so that we can become more relevant to our customers and build more loyalty because of it," she said.

The step towards relevancy Nealson undertook in this campaign was cleaning the database of the duplicate names that had been plaguing them. The DCPA went from a 550,000-name database down to 330,000.

"We were very inefficient in our marketing, with almost a 30% duplicate rate. So, we cleaned our database and then appended it," she said.

The DCPA enlisted a service to "append" all of the remaining names and data, and enlisted them to do "mosaic" or lifestyle attributions to understand the lifestyle segments people belonged to.

"We scored the database with a very basic RFM model," Nealson said, explaining that RFM is recency, frequency and monetary.

"It was a pretty basic score, we were able to just take those three things based on people's buying behavior and score them," she said, adding each person in the database had an R score, F score and an M score, “so we would not just have a snapshot in time, but …[understanding] who are these people who have a high RFM score.”

This brought the organization to "a whole new realm," in her estimation, because "we've never really understood our customer before."

After using the RFM model to learn more about DCPA's customers, the objective was to understand the qualities that made someone more likely to purchase, not only once, but over time.

"In a business like this where there are so many one-time buyers," she said, what "we really want to boil down to [is] who are those customers who come and spend the most amount of money?"

Step #2. Identify a propensity to return

Nealson and her team went back to their 2007 list and analyzed millions of lines of data, focusing on clients that had not transacted with the center in two years.

Propensity to return was judged by a few factors:

Transaction history

Seasonality

Ticket price classes

Gender

Marital status

Home ownership

The most prominent trend that emerged was within the demographic of people who had lived in their house for a year or less. They were more price sensitive, and less likely to have purchased in the last two years. They would be marked to receive the reactivation offer from DCPA.

Nealson and her team were able to produce 40,000 names from 366,000 total on the list as the "best" lapsed patrons to target with a "Welcome Back" reactivation campaign.

Step #3. Create collateral for the campaign

After identifying the 40,000 lapsed patrons, Nealson and her staff put together a three-piece "welcome back to the center" email campaign, along with a direct mail send.

The elements they wanted to bring into the emails were:

Exclusivity: spoke in a relevant tone

Offered value: a discount at one of the highest price points of the season

Time sensitive: Put an end date to the offer

"We did those three things in accordance with an integrated plan, which was one direct mail and a series of three emails," she said, and it was implemented for their holiday season, running from October 11 through December 1, 2012.

Nealson added it was especially important to grab readers' attention at the time, because one the of presidential debates was taking place at The University of Denver.

"Denver was very involved in the election, right at the high point … so it was hard to get through," she said.

So, Nealson and her team decided on a product that would grab attention and would be generally well-received by the recipients — holiday shows.

"It was a production that had some value in the holiday season. I think we put our best foot forward with our product offering, which I think was key," she added.

First email

First email subject line: "We miss you! Come back & save 50%"

It opened with "We haven't seen you in a while and we miss you! Please join us with an exclusive limited time 50% discount for you to attend a couple of our upcoming shows!"

It then offered a simple call-to-action to purchase, with a graphic for each of the two shows followed by a "Buy Tickets" button. Clicking this button lead the subscriber to a landing page to purchase tickets.

Second and third emails

The second and third emails were essentially the same, urging subscribers, "Don't forget!" that they can purchase tickets at a 50% discount to two holiday shows. But the window is closing, and the "offer expires on December 1."

Second email subject line: "Your exclusive 50% discount is expiring"

Third email subject line: "EXPIRES TOMORROW — Your exclusive 50% discount"

"It's not necessarily hard to sell tickets at the holiday season, but we're coming across the line to win their business back," Nealson said.

Secondly, she added, they gave an offer that "helped them re-engage with the brand, and the tone told them that we had noticed that we hadn’t seen them in a while, and we’d missed them.”

With the learning that these patrons were lapsed, Nealson said it was important to keep a tone that felt as though "you're speaking to them, so they feel it is relevant."

One direct mail piece was sent out first with an initial offer email. It was then followed up with the second email a week later to re-emphasize the offer, and then the final email 24 hours before the deadline was a “take us up on it today because it is going to expire,” she said.

RESULTS

"We are just at the beginning," Nealson said, of their efforts of changing towards relevancy.

Based off of what they have learned, she added, "we have literally implemented that whole philosophy."

They are currently building their whole database around it, and have hired a data analyst to help in the transition.

"We are very, very dedicated to looking at data as the core information source to guide us in the way in which we market," she said, adding the campaign served as proof for "the need for us to be relevant."

What she wanted for the campaign was to prove that by using propensity models and data-driven segmentation "we actually would see an increase in ROI and revenue and reach." The results they were able to achieve showed that proof, with:

An email-only ROI of 738%

An overall campaign ROI of 506%

"Welcome Back" emails:

A 38% open rate increase

A 210% clickthrough rate increase

Decrease in opt-outs of 95%

A 90% decrease in spam complaints

"We're still in the first stage of really learning and identifying how we are going to use this approach to dramatically improve sales and reach, but we've already learned so much," she said.

Relevance is a way for marketers to gain subscribers that are "very loyal," Nealson said, at a time when opting out is becoming easier, and more frequent of an issue.

"That idea of relevance, it isn't just a buzzword — it's a minimum requirement if you want people to communicate with you," she concluded.