Could (and should) shows offer a guarantee? Case study results REVEALED.

Marketing 101 for 90% of the businesses in the world teaches entrepreneurs to offer guarantees for their products or services.

It’s a show of confidence in your product.  It reduces risk for the consumer.  And it should increase conversions.

I’ve brought up the concept of guarantees in the theater to many people in the biz and the resistance I hear is usually twofold . . .

1.  “We’re the theater, we’re not a mattress company.  Guarantees cheapen our product.”

I guess I understand this argument, but I think it’s outdated.  There was a time when we made people buy tickets to shows without giving them seat locations (!) because we treated consumers like they were lucky to be in our theaters in the first place.  We live in the age of the consumer.  They have more power and more choices than ever before.  We need to respect that and be more aggressive in our efforts to get them in our theaters.  Besides, guarantees are offered by car companies, hotels, and the finest dept. stores in the land . . . surely we’re in those camps.  But I hear you, naysayers, even though we are a form of art that people can’t see before buying it (imagine buying a painting for your living room sight unseen), we are still an art and I have a counter proposal (see below).

2.  “We could end up giving away thousands of dollars worth of tickets!”

Ok, if this is your concern, then you probably shouldn’t be producing the show in the first place . . . because you don’t believe in it.  And if people are demanding refunds left and right, then odds are you’re not going to be around much longer anyway.  One marketing guru’s test before initiating a guarantee is to ask yourself, “How many people complained about my product or service in the past X months?”  If the answer is low, odds are you’re pretty safe.

Could you end up giving back money?  Sure.  But without a doubt the strength of a guaranteed offer should sell you more tickets than you’ll give back.  The net will be positive.

These are all good theories, right?  But are they true in practice?

I decided to put them to the test . . . and I’m going to reveal the results to you now.

Last fall I sent out a paid email blast for Spring Awakening to about half a million people.  In that email I offered a no questions asked money back guarantee to anyone that purchased using that specific code.

How many refund requests did I get . . . from those half a million people?  3.  That’s right. 3.

Now, wait for it.

Two of them never followed through on their requests (they didn’t use the right code and had just “heard” there was a guarantee . . . and the more we dug into it, the more we realized they were just trying to hustle us out of our bucks . . . and they gave up).

The other ONE (out of a half a million) . . . he asked that we donate the money to charity (he liked our production and was glad he saw it but just enjoyed the original more).

So we ended up giving up less than 1/10 of a percent of our overall sales on the blast.

But wait, there’s more . . .

I also sent out an email about Daddy Long Legs with the same guarantee . . . number of refund requests received?  1.  One.  Uno singular sensation.

Want another case study?

I tried this five years ago too . . . on Altar Boyz to that same half a million sized list.  2 refund requests received.

There is no doubt in my mind that offering a guarantee on these three shows sold more tickets.

So, the takeaway?  As long as you are confident in the show that you’re presenting, a guarantee can only help.  And if you’re not confident, well, you should find another show.

Now, you’ll notice that all of these guarantees were offered in private, direct marketing initiatives . . . requiring people to use specific codes, timeframes, etc. in order to qualify for that guarantee.

There hasn’t been a show that has offered a fully advertised, blanket, right at the box office, 100% satisfaction guarantee . . . yet.

Should there be?  (And the bigger question is . . . would the theater owners allow it?)

Let me know your thoughts in the comments below.

 

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Comments
  • Iris says:

    It’s an interesting concept… but I’ve never given much thought to guarantees, I think mainly because I never trusted them to actually give me my money back, and as soon as everybody does it, it pretty much loses it’s marketing appeal.

  • Kit says:

    I work in the email marketing sector of our economy. I deal with this style of marketing everyday for at least 8 hours. You have left out some VERY important information…

    1) Only about 15-20% of all emails sent out ever even get opened. Occasionally the open rate will be higher, but overall, that’s about accurate.

    2) Click through rates, or customers who actually click on anything in an email, are normally in the 3-4% range.

    3) Clicks leading to buying, well… as you might suspect the numbers drop even further. However, these numbers are near impossible to gage across the entire email market, but usually numbers fall below 1%.

    Don’t get me wrong… it’s still great that you only got 3 refund requests and I’m sure your ROI (Return on Investment) was really great as well, but I don’t want anyone to get the wrong idea about how email marketing really works. Odds are that you got less than 5,000 sells from your campaign of 500,000 emails. Even so, email is still the most cost effective form of marketing if done right.

    The concept of a guarantee in theater makes perfect sense when handled in this manner. A general across the board guarantee at the box office would most certainly lead to scammers though.

  • Carvanpool says:

    A boon for scalpers. Stuck with unsold seats? How dissatifying! Refund please!

  • Shari Fox Laval says:

    I wish I could have gotten one for Hughie.

  • Rich Mc says:

    Were it available, I would have exercised this option for “Next To Normal” and might have also left the theater before performance end, but that’s just my parochial taste. (I was hoping against hope, it MUST get less depressing.) The larger picture suggests that more theater goers would avail themselves of this opportunity once it were made common place. After all, no one reads Theater/ticket fine print these days, do they? The result is that Shows, Producers & Investors would all take a bloodbath.

  • Tom Hartman says:

    The only way I would ask for my money back under such a guarantee is that if some technical issue ruined my experience of the show. Being stuck behind a pole or worse, not being able to hear the play. I’m still angry about seeing The History Boys on Broadway and leaving at intermission because it was not well-miked and the actors were mumbling. I felt it was the producer’s fault that they didn’t get the actors to articulate their lines for American ears. (The Brits do this with movies – if they think the movie is not going to play internationally, the actors are allowed their local accents and to speak much more naturally than if they’re doing a Harry Potter or James Bond film where they make sure everyone in the U.S. can hear what the British actors are saying.)

  • Kay says:

    Wanna know why attendance drops in winter ? PARKING !
    I waited 2 1/4 hours at an ikon garage for my car, in 16 degree weather with my grand daughter, along with 50 or so other out of towers, tourists, and theatre regulars….we had a lot of time to talk.
    As a regular theatre gower from CT, I’m ready to only go HD.
    So sad.
    Not isolated incident 3rd time…with ikon. AVOID !

  • I’d be curious to see what the stats are on the number of tickets purchased using that guarantee code.

  • Barbara Beckley says:

    Ken, I’ve been saving your blogs for when I got time to read them and just saw this one. I wish you’d written it a year ago! I have been trying for a long time to get others at my theatre on board to offer refunds, on the theory that we stand by our work or we don’t. And since we’re a mid-size, subscriber-driven seasonal theatre, it would be easy to track anyone who consistently asked for refunds, and let them know the second or third time they asked that this was the last time. But no one wanted to even give it a try, and the opposition was so heated I finally gave up. Now, with the decline in subscriptions and attendance generally, we have thrown in the towel on the old business model and gone to the model of a performing arts center, i.e. booked-in shows and rentals. It’s a heartbreaker, because we have always been about finding wonderful plays and musicals and getting them up on the stage under our imprimatur. If I’d stuck to my guns on offering refunds, who knows? A guarantee might’ve worked in attracting larger audiences and we might still be in business.

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