Today cultural institutions are facing important dilemmas in many aspects of their management. Over the past decades, a new figure has emerged that of the art manager. Imagine you went to work every day to connect artists with audiences, vision with reality, and money with a mission. That is what managers in the arts do, they play an essential role in transforming the minds, lives, and communities through creative expression. This course has been conceptualized to address the need of skills and techniques to help professionals and managers in running art and cultural institutions. Learning Objectives There are three objectives to this course. First, we will approach the biggest issue cultural institutions face, the coexistence of managers and curators and giving evidence as to when, how, and why they can get along. Second, we will focus on some contemporary facets on what is means to manage a cultural institution and what cultural managers should expect and be able to face. And lastly, we will provide models and tools to design and implement appropriate courses of action to satisfy customers (visitors and audiences) and build an advantage over the competition. Course Structure The course is divided into six sections. Five sections are dedicated to specific aspects and themes of managing cultural institutions, while the sixth section is dedicated to individual interviews of prominent cultural institution managers on specific topics. The involvement of professionals and managers gives an incredible value to the learning experience of this course. Each module is paired with a quiz and discussion forums to reflect on the variety of the heritage management, its complexity, and the power of the network that we will build together during the course. Successful completion of the quizzes is required for a course certificate as explained in the Grading Policy page. If you love art and want to make an impact in this unique and fantastic sector, this course will support you in understanding the peculiarities of this sector and how to leverage on its tools to make a bigger impact. Look forward to meeting you online! Acknowledgements: Vatican Museums: www.museivaticani.va Cenacolo Vinciano: www.beniculturali.it/mibac/export/MiBAC/sito-MiBAC/Contenuti/MibacUnif/Eventi/visualizza_asset.html_1283837989.html (ITA) FAI (Fondo Ambiente Italiano): eng.fondoambiente.it MUVE (Fondazione Musei Civici Venezia): www.visitmuve.it The National Trust: www.nationaltrust.org.uk The Archeological Site of Paestum: www.museopaestum.beniculturali.it whc.unesco.org/en/list/842 Museo dell'Opera del Duomo (Florence): www.museumflorence.com Museo del Violino: www.museodelviolino.org _________________________________ Disclaimer - Since some of the videos are conducted with those whose native language is not English, we have decided to sometimes preserve their more emphatic speech to keep a tighter match between the audio and subtitles.
5.3 #CRM: Expanding Heritage Audience through Visitors' Research
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From the course by Università Bocconi
Arts and Heritage Management
268 ratings
From the lesson
THE NUMBERS HERITAGE NEEDS TO GROW
Art institutions must implement a sustainable plan. In order to do such, they need to leverage on data, numbers, and information. What are the most important aspects to focus on in order to run a sustainable and competitive art institution?
Meet the Instructors
Andrea RuraleDirector
Master in Arts Management and Administration (MAMA)
The second part of this section of the course, dedicated to the numbers
heritage management needs to know in order to grow,
is dedicated to customer relationship management.
Customer relationship management is an integrated system of strategies and
also operational processes that are supported by a proper and
suitable software in order to do what?
In order to increase the loyalty, and of course the profitability of the firm.
This is something that typically happens and
is implemented in traditional profit companies.
And what we think is very important is to
also have a CRM approach in managing heritage,
in managing the performing arts, and in managing cultural institutions.
Why is this important?
It is important because long relationships are the most profitable.
Getting to know and finding new customers is very expensive,
while if we already have a set of customers that has a relationship with us as a company,
it is cheaper to develop and increase their relationship rather
than starting research for new customers from scratch.
Then, we know from what we learned in this course,
that loyal customers tend to buy more,
because they already trust our firm, they already trust our organization, so
they are happy to buy more.
Then there is another element, loyal customers are less expensive to serve.
I mean, that getting to know and
relating with them is a cheaper than serving
new customers that enter into a relationship with the organization for the first time.
Then we have another important element
connected with customer relationship management which is retention.
It is the capability of an organization to retain,
to maintain a relationship for a long period;
not only after the first purchase, but later on in the second, third, and
further purchases and the relationship developed with the customer.
After having understood what customer relationship management is,
we can say that it mainly consists of three moments:
The first one is the analytic CRM, getting to the information,
getting to know the data;
strategic customer relations management, so defining what the best
activities are to implement in order to look for profitability and loyalty;
and then, of course, the measurement of the results,
ao analytic, strategic, and measurement.
The first part that is very important above all in a context of
heritage management is having, clear in mind, what the most important
metrics are that are useful for a cultural organization, for a museum, for
a theater to research and have in order to make analysis and strategy.
We can measure, first of all, the strength of the relationship.
How the relation is strong between visitor and the museum,
between the audience and the theater, between the subscriber and
the organization that leaves with the subscription of its member.
Second, we have the length of the relationship that needs to be measured.
How long the relation is likely to last.
And third, the profit that this relation can generate.
Let us start with the first one.
So analyzing how to check and measure the strength of the relationship.
In order to measure the strength of the relationship, there is an indicator, quite
used in the traditional profit goals, which is the customer retention rate.
The customer retention rate measures the capability of the organization or
the company to retain, to be bound with the customer year after year.
It's easy to calculate.
Let's make an example, a theater that has a set of subscribers every single year.
At the end of a year ,so 2015, we need to measure
how many subscribers we have at the end of this year.
And deduce from this number, the number of the subscriber that were
established and the number of the people that subscribed during the very year,
so the new subscriber of the year 2015, and divide this result for
the number of the subscribers that we have at the end of the previous year.
So we have an indicator which is the customer retention rate.
Members at the end of the year minus the new member collected during the year,
divided for the member of last year.
This is the customer retention rate.
It measures the capability of the company, the organization,
the theater in this case, to retain and to maintain the relation.
Connecting with the customer retention rate, then we have another rate that is
easy to calculate is one minus the customer retention rate.
And we have the churn rate, so what is the churn rate?
That is something that Is more common and more known.
It's the percentage of the rate of the customer,
the visitors, the subscriber that abandoned their relations.
So people that came Into contact with our organization and
then after that, they left the organization.
The second aspect that we need to measure is the length of the relation.
The length of the relation is the customer life expectancy, and
this measure using one divided by the churn rate.
The last metric for
an institution is important to consider is the customer lifetime value.
So, we know the retention rate, we know the churn rate,
we know the customer life expectancy, now we need to know for
the remaining life of our customer, for the future life of our customer
relating with our company, how this relation can create a profit for us.
So the customer lifetime value is nothing else but the present value that
is attributed to a customer for the future cash flow that he generates.
And in order to calculate it, we need to consider the cash flow
that the customer generates this year and the following year.
Of course, divided for one plus the discount rate.
This information regarding the customer lifetime value
allow us to consider another element that is important for
creating and maintaining and develop the relation with other customer.
And this is very, very important also in the heritage management.
We have a lot of new visitors in a Museum.
We have many people that participated, too in the performing art in the theater.
But the company, the organization needs to be able to retain, maintain, and exploit
the relation that is generated in the moment of interaction with the costumer.
So, we consider now the growth opportunity, the opportunity to grow.
In order to understand, how can we developed and we can grow the opportunity
that are generated through the relation with the customer?
We can consider two approaches, or better than the two approach,
we can consider two perspectives.
The perspective of the customer base.
So if you want to exploit our customer or try to find out new customers and
the same time the so called business portfolio.
So our product portfolio, our service portfolio and in the case of museums and
theater, the experience portfolio that we have present and future.
So something that we are already producing, already showing or
something that we create for the future.
If we consider these two perspectives, the customer base and the business portfolio,
we can decided to penetrate our market if we use
the customer base, so our customer, our visitor, and
the product that we already present to them.
So the present business portfolio.
In this case, we usually talk about the upgrading,
the upselling, the penetration of the market.
On the other side, if we have the price and business portfolio, so
the actual production in the way of our organization, then this needs to be
sold and presented to new customer, we talk about market development.
The third aspect is for the future business portfolio.
I mean we want to create a new product for the visitors in the museum.
We want to create a new season, a new proclamation, a new program for a theater.
We can sell this offer to the present customer.
So it's called a product development.
But also we can sell this to the future customer and
in this case there is a combination of actors playing the role and
we talk about diversification.
Well, we arrive at the end of this part dedicated to the metrics,
measuring the strength of the relation, the length of the relation, and
the profit generated by the relation.
There is an important aspect that I am very positive in underlining
which is the necessity of getting information, of getting data.
Customer relation management can exist if we have a collection
of data that we gather in the relation with the visitors.
So it's important that the ticket offices taking information from the people that
is buying the ticket of a museum, is buying the ticket for a performance.
Collecting this data allows the company, the organization,
to have a database that needs to be studied.
And so data collection, data mining, so enter in research in the data,
allowing therefore to profile the visitor, profile audience,
profile the customer, so profiling.
And then it is important to conclude, to stock those data warehousing in order to
make a comparison between the data collect in this year with the one collected in
the next years and understanding if there was an increase,
decrease, better performance of the organization in the future.
So data collection is at the basis of a proper and
profitable customer relation management.
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