Second installment in a series beginning here.

Incentivized Resellers

Nine years ago the city of Los Angeles hosted a huge international trade show organized by the US Travel Association for several thousand international tour operators and their North American suppliers. The cultural tourism fad was big back then and somebody had encouraged the arts institutions along Downtown’s Grand Avenue corridor to co-host an enormous promotional party for the visiting delegates.

I remember standing with a senior leader from the Music Center the night of the party on the steps of the Dorothy Chandler Pavilion watching the crowds pour in and out of the newly built Disney Hall. At one point my friend said to me, “I’m told we’ll see a huge bump in sales after this.” I said, “You know they’re all wholesalers.” She said, “What?” I said, “They’re wholesalers. They buy destination products at pre-contracted wholesale rates to resell at a markup to their traveling customers. There’s not a box office in this city that can sell wholesale tickets let alone manage B-to-B contract accounts.”

She didn’t know. And neither, apparently, did her peers. There would be no bump in sales because the participating arts organizations were structurally incapable of serving the buyers they thought they were courting. In the arts, we can’t sell seats at a price below what’s printed on the ticket, and we offer no service mechanisms for high volume business buyers.

This was an unusually grand and embarrassing example of the arts’ failure to connect with incentivized resellers, but it happens all the time. For a more pedestrian example, consider the hotel concierge.

At some point in most arts marketing brainstorming sessions somebody says, “Hey, why don’t we reach out to the concierges so they can recommend us to hotel guests.” It’s a lovely idea until you realize that hotel concierges aren’t always the selfless service providers we imagine them to be. Many concierges earn rewards for the services they offer in the form of incentives paid by the restaurants and attractions they recommend. That concierge isn’t just being nice when she offers to personally place your reservation at the local steakhouse. She wants to make certain the steakhouse knows and has a record of the fact that she called because she makes money on the back end.

So. Will a concierge recommend your ticketed attraction? Maybe. But if you’re competing with another attraction that offers cash incentives, probably not. And even if she is motivated to recommend you, the likelihood is that she’ll book tickets through her contact at the local ticket broker, who gives her far better service than a nonprofit arts organization ever would, and rewards her handsomely for all the business she sends his way. If you’re expecting that concierge to call your box office or, god forbid, Ticketmaster, and then get nothing in return, it just isn’t going to happen.

Large theme parks understand the world of incentivized resellers and use them to great advantage. If you have a theme park or large commercial attraction in your community, invite the senior sales executive out to lunch some day and ask him to describe how he works with incentivized resellers (don’t ask him to share his contacts). If he’s willing, he might describe international tour wholesalers, domestic package travel companies and receptive tour companies that get net rates; networks of hospitality and corporate concierges who earn commissions; employee perks companies and affinity group organizers that work on contract rates or commissions; event and meeting planners who get per-person cash incentives; a range of ticket brokers and resellers who work on commissions or net rates; and various welcome centers, ticket & admission bundlers and selling partners throughout the the community.

Then ask him to describe his ticketing system. The more robust systems enable authorized external resellers to log onto the attraction’s ticketing system through their own accounts on their own computers and sell directly out of live or allocated inventory at a pre-negotiated rate – allowing for them to sell to their constituents and know that their incentives are accruing in their account according to whatever relationships have been set up in advance. With ticketing systems like this, concierges can book seats, print vouchers for their guests, and know that their cash rewards are being meticulously tracked.

In the arts, of course, we don’t do any of this. It’s not in our culture. We see an amount printed on the ticket and believe it’s our money. All of it. Even if the ticket is sitting unsold in the box office drawer. And we manage our box offices like mini fortresses with miserly treasurers, bulletproof glass and annoying intercoms (easier to buy a $5,000 computer from a CSR in the middle of an Apple Store). It’s no surprise that we don’t open our systems to outside sales networks or let people who are willing to do our sales work for us earn a cut of the take.

But at some point we may want to ask if our traditional operating culture is more important than earning revenue. Given the most recent NEA report on declining arts audiences, we might want to rethink some of these counterproductive systems and start developing infrastructures that will allow us to maximize some of our most promising untapped markets.