Members of Audience Rewards can use points to purchase tickets to shows like First Date.
What drives a consumer to participate in a rewards program?
There are thousands of consumer-driven programs available to the average shopper, offering free stuff in exchange for the right to track the number of hotel nights or turkey sandwiches purchased. Consumers could literally receive rewards points for every purchase they make, so how do they decide which programs to sign up for, and which to ignore?
It’s a question that has been studied at length by the Broadway League and the three major theater owners in New York City — Jujamcyn, Nederlander and Shubert. Their findings have led to the crafting of Audience Rewards — the self-styled “Frequent Flyer Program of the Arts.”
“When we first conceived of Audience Rewards we didn’t fully understand the power of point collecting or point spending by consumers,” said Charles Flateman, VP of Marketing at The Shubert Organization. If the product is something fans have a high affinity for — like the arts and Broadway — they’re much more likely to actively track their points and participate in a rewards program. Often, that ability to clearly display and track participation is more useful than the prizes given out for rewards.
“The percentage of consumers who want to have lunch with a choreographer is a very small number compared to the number of consumers who want to earn 300 points for going to the theater,” said Flateman.
The Reward Points Economy
With the advent of frequent flier miles, a number of apps and tracking services have popped up, each designed to help consumers track their membership in rewards programs. There are rewards programs for retailers like Macy’s and Best Buy, for movie services like Netflix and for travel companies like Amtrak, Delta and Starwood hotels.
For marketers like Flateman, the explosive growth of rewards programs has made it more challenging for any single program to stick out. It’s also meant a huge new inventory of goods and services being offered for point redemption. The three theater owners on Broadway have their own high-end inventory to offer — theater tickets — but if they could combine with other programs so that points earned at the theater could be used for airline tickets or hotel nights, that would only make the program even stronger.
Two years after forming Audience Rewards in 2006, the coalition of theater owners inked its first affiliate deal with Amtrak and its Guest Rewards program. Not only could theatergoers earn points toward free Broadway tickets when they purchased train tickets, they could also earn points toward Broadway tickets every time they used their Amtrak World Mastercard to make a purchase.
In 2011, Audience Rewards officials extended their rewards program to Starwood Hotels & Resorts Worldwide — one of the largest rewards programs in the world with 17 hotels located within New York City and thousands more around the globe. The partnership with Starwood also meant that Audience Rewards members would have access to the SPG Moments program, where elite account holders can redeem points for red carpet movie premieres, meet-and-greets with world-famous musicians, championship sporting event tickets, golf clinics with pro players, and private dinners with world-renowned chefs.
By August 2011, the Audience Rewards program had signed up its one-millionth user — membership is now estimated at about 1.5 million, said Hal Goldberg, VP of Theatre Operations with Jujamcyn.
“All rewards are fully funded,” Goldberg said. “As theater owners, we understand the responsibility of being stewards of careful financial accounting.”
Each time a person makes a purchase, a small fee is charged to the retailer and set aside in an account for the consumer.
“The heart of the business is that shows voluntarily choose to participate and when they do, tickets that are sold have a small fee to help build the bank for the consumer,” Goldberg said. “When shows participate, on the back end we create a liability that the company will then hold for future redemptions.”
When fans want to use their points for Starwood Hotels or convert them to frequent flier miles for Delta, U.S. Airways or United, the balance of their account is transferred out to third party companies.
“And in turn, those same frequent flier points can also be used to buy theater tickets,” said Goldberg. “That’s something that has really grown in impact.”
The larger the purchase price, the more points assigned — Goldberg estimated that it would take about four orchestra ticket purchases to earn one free balcony ticket. Fans earn two points for every dollar spent on Audience Rewards. Fans can cash in all their points for a single purchase, or they “can toggle the amount of cash they want to pay with point redemption in order to buy a ticket for the theater. That’s very typical behavior of our casual consumer.”
Bonus points are also awarded to fans who purchase special offers from the Audience Rewards site — 500 bonus show points are currently being given out to anyone who purchases tickets to the Last Summer on Earth Concert featuring Barenaked Ladies, Ben Folds Five and Guster at the PNC Bank Arts Center in Holmdel, N.J. on July 20. As of press time, there were 17 shows in New York offering bonus points for ticket purchases while some shows, like Love’s Labour’s Lost and Spider-Man: Turn off the Dark were even throwing in front-of-line privileges and backstage tours.
“It’s a very effective way of relaying a marketing message while keeping the show’s involvement opaque,” said Flateman. Even shows that aren’t known for discounting will offer discounts on some of their lighter-selling shows. They’re able to fill houses without a blatant, in-your-face discount.”
Building an Advocate for the Fan
Building and maintaining Audience Rewards is not without its technical challenges. Shubert and Jujamcyn both use Telecharge — a ticketing system developed by Shubert — while Nederlander uses Ticketmaster. Creating an API that could pull transactional data from each system was one of the most challenging aspects of designing Audience Rewards, Flateman explained.
“Plugging into a legacy system is a hard thing to do, that’s why you rarely see coalition loyalty programs that actually function in the real world,” he said. Still, the desire to have a single system for all things Broadway has been at the core of the three theaters’ global marketing efforts.
It’s also a global touch point for feedback, explained Flateman, noting “we’re seeing more and more advocacy on behalf of Audience Rewards members,” with fans calling to give feedback on show quality, seat location and even theater temperature. Telecharge staff administers the program, where the overriding goal is to make the consumer happy.
“If someone cares enough to call up and say their seat was not good, we want to be able to satisfy the customer on the phone in 30 seconds and not make them go crazy waiting on hold,” Flateman said.
“What’s on the horizon will be more sophisticated and personalized ways of communicating with our consumers. The opportunities that come out of big data are very new — it has a scary ring to it, but it’s a real opportunity to service customers in new ways,” he added.
Goldberg also said his company is looking at “how people feel when making a transaction” through a CRM system that “connects with them on a personal level. We’re looking at how to speak to each person in their own voice. That’s hard when you’re serving 5,000 people a week, but the goal and mission is to make each individual feel like they’re the most important person in our theater on any given night.”
Interviewed for this story: Charles Flateman, (212) 944-3700; Hal Goldberg, (212) 840-8181