From handling business “in the trenches” to studying the largest companies in the world in grad school, Jeremy Larochelle offers his unique insights into business, entertainment management, marketing, and more!
It is a misconception that a concert is all about the artist on stage. While they are a key component to the success of the venue, they are not as important as the customer. The customer is the person who buys the ticket… the food… the drinks… the merchandise…the VIP packages… and whom the sponsors want to get in front of. Without them, the venue wouldn’t exist and the artist would be out of a gig.
Fortunately, appeasing your customers can be rather simple. Give them a great concert experience and they will stay longer, spend more, and hopefully return to see you again. One of the ways to enhance their experience is to make it about them. You can do this a number of ways. Treat them right and with kindness at every step of the way. Surprise them with upgrades and constantly thank them for their business.
Another way both venues and entertainers can make the experience about the customer is by taking a picture.
During your next performance, announce to the crowd that you want to get a group picture with everyone. Then, grab a selfie with the crowd behind you. The goal is to get as many of your fans in the frame as possible. After that, announce that you will upload the shot to your Instagram feed and encourage them to check it out and tag their concert-going buddies and friends who missed the show.
This simple action will enact a number of psychological triggers on your audience. They will feel a sense of belonging, community, and pride. The posts will likely start social engagement with people who also attended the show, further solidifying their pack bond. All positive stimuli that will likely lead to positive actions such as return trips to your next performance. However, the psychological triggers don’t stop there.
When your fans share this image on their social feeds psychological triggers such as Fear of Missing Out (FOMO) kick in for their friends who didn’t attend the show. If anyone watched the FYRE Festival documentaries, this negative trigger contributed to the social-success of that epic festival failure. Those who missed out are given an unintended edited view of what the show was really like. They do not see the long lines to use the restroom. The parking fiasco. That $20 beer. Rather, they see pictures of their friends having a great time followed by likes and comments that reinforce those stimuli.
This strategy works for venue ownership as well. Encouraging fans to share their concert pictures by tagging your brand or through a unique hashtag so your marketing team can re-post offers a huge return with little spend. Not only do these pictures give your brand a positive stimuli response and induce FOMO behavior, but they also act like customer reviews providing a decision reinforcement vehicle for people looking to purchase a ticket to your next show.
If you run a concert venue, your fans are your biggest asset. Without them, nothing would be possible. Part of your core strategy should be to find economical ways to WOW them at every turn. While the concept of simply taking a picture seems like a no-brainer, many do not take advantage of this opportunity to connect. I hope this post provides social and psychological evidence as to why you should snap a selfie with the crowd.
The Balanced Scorecard is a strategic instrument that organizations use to analyze the core components of their operational efficiency and how they relate to the bottom line. Fundamentally, Scorecards tackle four elements of business operations.
Finance
Internal Processes
Customer
Learning and Growth
Inexperienced managers primarily focus on the finance aspect of the business. They look for ways to reduce the bottom line and increase profitability. More often than not, they do their financial analysis with blinders on in regards to the other Key Performance Indicators (KPI’s) of the business. A problem that will likely lead to short-term gains at the sacrifice of long-term success.
This long-term detriment arises because of the interrelated nature of various aspects of your business. For instance, you could push workers to produce more widgets and in the short-term, they will likely meet your demands. However, if your internal processes are not analyzed for operational constraints. You will reach a point where no matter how hard you push your team. They will not be able to produce another unit. The same can be said for learning and growth. If your employees are not being adequately trained in the latest widget making technology, your business will eventually hit a point at which your staff is unable to properly produce the widgets of tomorrow. Finally, if you ignore your customer complaints to focus on lowering costs. Eventually, you won’t have any customers to service.
The thing to keep in mind is that balance is vital to any long-term business success. The venue booking world is no different.
When you run a venue, your success depends on creating constant and increasing successful shows over time. This is how you cover operating expenses, maintain a competitive advantage, and (most importantly) pay-down long-term capital costs such as real estate and equipment. When these investments are paid off, exponential returns set in. This is why managers need to keep the present in check while also crafting a path to support continued long-term success.
One of the best ways to do this is to operate the venue from a balanced scorecard approach with KPI’s focused on the live entertainment ecosystem. Here are some examples to consider.
Finance – This is the primary focus of most venue leadership. Understanding the total cost of the act, production, and support staff versus your returns on ticketing and ancillary income such as food and beverage, merchandising, and sponsorships are important. In addition to the operational fees associated with the event, you need to understand your ticket scaling and market demand (price point) for your shows as well as the elasticity of demand in relation to tickets sales versus ancillary income sales. E.g. if you drop ticket prices by “x” amount you raise drink sales by “y.”
Far too often, management simply looks at the cost of the band versus ticket sales not realizing their venue could likely support a grander marquee name and see better returns thanks to the power of price elasticity. In addition, short-sighted managers may work to cut corners in regards to act hospitality to better their ROI, which brings me to my next KPI.
Act Relations – Price elasticity and ancillary income are directly correlated to the quality of the act you bring in. If the band rocks, your customers want to drink more. Their fans want to buy merchandise and with consistent quality acts. You will attract sponsors with deeper pockets.
So, what happens if you treat acts like… well… crap? Security treats them like thieves. The Box Office fights with them over comps. Marketing drops the ball on their upcoming performance. You put them up at one-star hotels or leadership doesn’t even bother to come to their shows and say hi and thank you!
Over the short-term, there will be little impact. However, over the long-term. Things will change. Word will spread in the touring community about your lack of hospitality and soon your options for higher-quality acts that can sell more tickets and (more importantly) more ancillary items will dwindle as well.
Venue Character – Your venue should have both an identity and functionality for all involved. A proper stage with modern sound and lighting will appeal to better entertainers and draw experienced production professionals. These elements alone will feed off of each other and elevate your programming. But don’t stop there. Make your venue into the place that acts, managers, bartenders, servers, chefs, box office peeps, and support staff are proud of. For instance, it is reported The House of Blues welds a box of Delta Mississippi mud under each of their stages to give their clubs that “special” blues-spirit. What a cool story to tell your family during Thanksgiving when they ask about your new job.
When you create that type of character, your employees will be proud of what they do and it will show in their work. More important, they will talk about that cool environment to acquaintances and through the power of word-and-mouth, you will create an organic pull marketing campaign for both customers and employees that will stand the test of time.
Fans – Venues survive thanks to the fans. They buy the tickets, the drinks, the food, the merch, and are whom the sponsors want to get in front of. The customer experience is paramount to a venue’s success and no Balanced Scorecard would be complete without a “customer” element.
One of the benefits of the venue customer is the power of “group think” in the live event environment. I have discussed this phenomenon numerous times. To recap, typically in a group environment individual decisions morph into the collective mindset of the pack. E.g. if a venue is hopping. More people want to join in. If four people around you purchase a beer – suddenly you will want a beer.
This benefit can also be a detriment. Piss off too many of a group’s fans through overzealous security procedures, exorbitant ticket prices, dirty bathrooms, poor parking – the list goes on. And quickly things can turn for the worst. In a world of Yelp and Google reviews, you must actively listen to your fans and work to rectify problems that are proving commonplace. I would suggest that you work to “wow” the fan experience. As this would create a pull marketing strategy with the band. E.g the fans could force them to play your club. This can give you negotiating power and possibly get them in the door at a better rate than your competitors are offering.
In conclusion. I am a generation X’er, so I grew up when the organizational mindset was still rooted in the industrial concept of using employees like cogs and disposing of them at will. Luckily, this has changed and thanks to the Internet and social media customers and employees have a very powerful collective voice. It has become so powerful that nearly all major organizations have some sort of Corporate Social Responsibility (CSR) division, leader, or manager.
Unfortunately, I still see concert venues rooted in the old-school concept of using-up entertainers and spitting them out. They remain focused on short-term profits at the cost of long-term opportunities. I am not saying that you need to go into the red for every show. Nor, am I saying that you need to overspend on production or talent fees. What I am saying is that you need to recognize the ecosystem of your operations and how establishing balance among these unique KPI’s could lead to lower costs and better profitability for years to come.
While on, what I call a drumming sabbatical, in 2005. I traveled four to five hours by bus every month from Berlin, NH to Boston, MA to study with legendary drummer Kenwood Dennard.
The hour-long events turned out to be MUCH more than just lessons on how to become a better drummer. Kenwood is a highly spiritual individual who views drumming, and the world around him, in a very metaphysical way. After each lesson, I would ride home for four hours in a state of intellectual brain drain.
After reviewing my homework from our first interaction during our second lesson, he explained his grading system something like this.
If you prepare accordingly and nail the parts, I will give you a 90. If you prepare accordingly but present the material in a new unique way, say use your feet instead of your hands. I will give you a 95. The only way you will get 100% is if President Bush calls me up and says. “Jeremy’s drumming was so good that I am pulling the troops out of Iraq and declaring world peace.”
At the surface, Kenwood’s grading system seems comical, but I assure you it is not. Rather, it is an important life lesson – you ALWAYS have room for improvement and you should be striving to better yourself every day.
I have carried that lesson with me across oceans and careers. I pushed myself as a drummer bettering my technique, knowledge of music, and reading ability even writing my own book in the process. And while I no longer drum professionally, I still hit the kit six to seven days a week working on these skills.
As for my career as an entertainment and venue manager, I continue to study. I read books on everything from leadership to sociology, marketing, management, and finance every day. I watch YouTube videos on stage design, rigging, sound, and lighting among other subjects. I use LinkedIn’s premium service to study new skills in areas such as Machine Learning, Tableau, and Executive Leadership. I even spend ten to thirty minutes a day learning Spanish.
It was reported that when one of the greatest leaders of our time, President Theodore Roosevelt passed away. They found a book under his pillow. A man who is the only president to receive both the Nobel Peace Prize and the Medal of Honor was still learning up until his last breath. While I would NEVER compare myself to Teddy, I encourage those reading this to not dismiss the power of being a lifelong learner. You may not change the course of history as he did. However, you WILL change the course of your life.
Stakeholder management is vital to a business’ success. Not to be confused with the financial “shareholders,” stakeholders represent all the persons with a “stake” in your company. This can be anyone from customers to employees, suppliers, and shareholders to the local community and even the planet.
Stakeholder management reminds us that the organization doesn’t exist on a deserted island. Rather, it is part of an ecosystem that constantly must be reviewed for signs of in-balance. Listening to stakeholders helps the savvy manager maintain harmony in this ecosystem.
Entertainment venues are no different. Say, a theater isn’t listening to traffic and sound complaints from the neighborhood in which they operate. Community members have been voicing their opinions across social media. However, social-listening and reporting is not part of the job description for the marketing department’s social media specialist and the issue goes unnoticed. Soon, the complaints gather steam and reach city hall. Afraid of not being re-elected, city officials initiate a temporary noise ordinance and amp up ticketing around the venue. Almost immediately the business begins to suffer and the organization is forced to go on the defensive. This costs valuable financial resources, jeopardizes important relationships, and can even tarnish the brand name.
This example may seem simple, but it is not uncommon. Even more bothersome is the fact that it can be rectified rather easily and with minimal cost. They could assign one of their marketing employees (even an intern) to troll the web for bad reviews on sites such as Yelp, Facebook, Google Search Results, TripAdvisor, Manta, etc. If staffing is an issue, anyone can set-up alerts for the business name on Google. Then, when someone posts said name on the web. .. you’ll get notified about 75% of the time.
Surveys are a great tool to get specific feedback from your customers, suppliers, and employees. Survey Monkey makes that real easy.
Finally, get out and talk to your customers, employees, and community. This may be the greatest stakeholder management tool at your disposal.
The key is to realize that your business exists “because of” the ecosystem in which you operate. That system consists of you, your customers, employees, government officials, competitors, suppliers, the community, and planet. Actively listening to their concerns fosters better cooperation between all involved and initiates greater success.
Formal Theories of Mass Behavior teaches us that when faced with a decision, the consumer will pull from external stimuli to test their initial hypothesis of what they anticipate the outcome to be. For instance, if you think a glass will break when you drop it. You can let it fall to the ground and see what happens. Then, classify this information for future situations regarding the fragile nature of glass products.
The problem arises when the consumer cannot test their initial hypothesis directly and efficiently. In a very timely example, it is cost and time prohibitive for the average voter to determine if candidate “A” will do well for them when in office. To truly gauge the outcome, the voter would need to dive deep into the candidate’s past behavior and history addressing various political issues through historical analysis, observing the party in action, and/or speaking with them directly. All items that require a great deal of decision investment to accomplish.
To counteract this problem, the consumer takes part in a social engagement where they ask someone – preferably someone they deem has knowledge of whom will be the best candidate and then they weigh those opinions against their initial hypothesis. If these judgments fall into alignment, the consumer’s decision is re-affirmed and they move forward with their initial opinion. This information is then retained in their decision-psyche to be pulled from in similar future situations. Just like our glass-breaking test.
However, if the external stimuli disagree with the consumer’s initial hypothesis. They will likely seek out additional opinions to “break the tie.” This back and forth can follow multiple cycles until the consumer makes a final judgement to abandon their initial decision or stick to their guns.
So, what in the heck does this have to do with live entertainment? In a previous post, I discussed a phenomenon I call the “adoption point.” This is when the crowd grows to a comfortable size, which reaffirms the prospect’s decision to “join the pack.” It is rooted in our primal instincts, which happen to form the foundation analyzed by McPhee’s Formal Theories text. A time when the young wolf analyzes what he thinks will happen to him if he goes it alone versus joining the rest of his howling buddies. The larger the pack… the more he feels secure in their collective decision to stick together.
This is something I see on a regular basis in the concert world. One of our venues is an open design where onlookers can stand outside the perimeter of the space and watch the band interact with the crowd. Constant observations have demonstrated to me that when the onlooker hears the entertainment and stops to investigate. They are less likely to enter the space if they do not see a crowd dancing or otherwise enjoying the music. In addition, monitoring this situation has revealed a direct correlation between the time it takes the prospect to enter the room and the number of persons on the dance floor. If it is zero, the onlooker is extremely unlikely to enter. In a venue with a capacity of 250, if there are 125 plus on the floor. The prospect will very likely enter the space with their waiting time reduced per every ten or so persons in the venue. It is this author’s hypothesis that this correlation can be defined by McPhee’s analysis. The prospect arrives at the entrance to the venue with an idea of how they will likely feel about their night out. They weigh these thoughts against the enjoyment they see – more specifically how the other patrons appear to be reacting to the environment. The prospect’s decision to join the group is compounded with each body (one unit of positive stimuli) they see.
Of course, there are numerous variables at play in these situations. Style of music, time of night, day of week, look of the crowd, other choices available to the prospect, etc. However, in my opinion, McPhee’s analysis could provide additional evidence as to why dance floors seem to go from “famine to feast” in the blink of an eye. That being the consumer watching from afar is weighing their internal opinions about the quality of music and if they will enjoy it against the reaffirming stimuli of the group. Since it is easy for them to categorize the size of the crowd against the perceived quality of the act, this decision will become shorter and shorter as the dance floor reaches capacity.
Venue managers can use this behavior to both increase the turnout as well as ancillary income such as drink sales. Here are a few ideas.
Getting and keeping bodies on the floor:
When the band goes on break, do not turn down the music and dim the stage lights. Keep it up and keep it lively. If the budget permits, hire a DJ to spin during the band breaks. And if you only hire DJs, there should never be a break.
Reverse host psychology. Most venues I see typically only hire bottle girls… why do we not use bottle guys as well? Males will appeal to your prime female demographic, which will draw your male demographic at a compounded rate.
Hire appealing and personable non-serving hosts with the sole purpose of driving the dance floor. Theories of Mass Behavior show us the business science of having a larger group equates to profitability growing at a compound rate. Really weigh the costs of paying a host against the forecasted returns of a room at regular capacity.
You have to do it consistently. You want to condition the group of reaffirms (the people your prospects will look to) to come back on a regular basis. You do this by not making them guess. Give them the same quality entertainment every night. Don’t switch genres or styles once you start to see a following.
Once you have a crowd:
If you already have a strong crowd or operate a ticketed event that is at capacity such as an amphitheater. You can use social stimuli reinforcement to get people to purchase more drinks, food, and schwag. As anyone of legal drinking age who has been to a concert knows, when the guy next to you sits down with a beer. You suddenly want a beer. The more people sitting down with alcohol in your vicinity, the greater your thirst becomes.
Statistics are your friend. Collecting data has never been easier. If you sell food and beer, you should be recording those sales. Make sure sales can be categorized by time stamp as well. Now, make sure you are collecting door data through ticket sales or head counts. Those numbers should be time stamped as well. Look for patterns, seek out the lulls, and initiate “blitz” promos where you reduce costs for an hour or so. This will get beers in people’s hands and as more patrons enter after the promotion dies. They will see a positive stimulus and be more prone to buying beers to “join the pack.”
The goal here is to start using a new Key Performance Indicator (KPI) in your business analysis. Since I am from rock n’ roll, I like to call this measure The Bodies on the Floor KPI (in an ode to Drowning Pool). If you analyze this social reinforcement statistic against your other indicators, you will likely find some secret data that could equate to better profitability for your brand.
