For the up and coming groups that are still trying to carve out market share, all of these changes are the best possible thing that could happen. The playing field is level. Since it’s becoming less certain what promotional tactics are most effective for cultivating an audience, the larger resources available to existing organizations isn’t such an overwhelming advantage. It’s a great time for new and small organizations to make a splash.

Each organization must analyze it strengths and its most valuable donors and sources of funds. They must work closely with them to find the way forward.

Contradicts the other:

They must be ready to cast aside the way they have always worked and find new ways.

Aren’t most organizations trying to survive this downturn already embracing their most reliable donors, and doubling down on playing it safe, to please those donors?

Is it any surprise that arts groups are reducing their advertising investments in the local papers? The movies are the only art form reviewed and considered in the local papers. (Consider the sizable investment in movie advertising.) What’s a chamber music series or a theater group do to get noticed? The newspaper is no longer a smart media investment in promoting the arts.

1. You write that “people want prices to fool us” (quoting from the NYT). Yes, JCP went to every day low pricing. This was the strategy followed by Macys after their merger of variously named chains into one national chain, even though the May Co., which they acquired, used coupons and sales to drive traffic to the stores. Macys lost a lot of business until they changed back. JCP should have been aware of this.

While the NYT says that people want prices to be lower to seem like we need a deal, I think the other lesson that all of the coverage seems to have missed is that people need “nudges” or excuses to go out and shop and buy–especially when we don’t really need something. (E.g., I want a nice Kitchen Aid mixer for baking, but I haven’t bought one yet. Every time I see the product featured in the Macy’s ads, I start thinking about getting one–although we need to finish the hutch for the dining room first, so we have some place to put it…)

So sales and coupons help push us to go out and buy or to remind us, when we need reminders. especially for discretionary items that we don’t really need. That’s a different element from what the NYT wrote.

I am not sure how that realization can be leveraged by arts organizations. Maybe as you point out, there needs to be more of a sales orientation by arts organizations, maybe it’s more about market segmentation.

The reality is that you have your core audience and your interested but needing to be reminded audience and then totally new audiences. Each needs a different strategy for pricing, marketing, and sales.

Certain audiences will buy anyway, and lowering your price through a sale just leaves money on the table.

Or you can change the price to make part of the ticket a donation, etc.

There are lots of opportunities to think differently here.

2. changing merchandise to be more hip. What JCP should have done is organize their store footprint into similar demographic clusters, and if there was demand for different kinds of merchandise (like European cut suits) in some of the stores, then they should have changed the selection. But they just introduced the new stuff everywhere. I think about the JCP store I saw in Bend, Oregon. I can’t imagine there was a lot of demand for such suits there.

The relevance of this to arts organizations has to do with the urban vs. suburban divide and presenting edgy vs. safe programming. Interestingly, the AFI Silver Docs documentary program–AFI moved from DC to Silver Spring Maryland, just outside of DC, a few years ago–this year they are shifting many of the venues to DC, whereas before all had been at the AFI Silver Theatre in Silver Spring.

I think that’s because in arts the equivalent of European style suits are harder to sell in the suburbs, and because urban people (at least in DC) forgot or come up with reasons to not travel out to the suburbs, unless the European style suits there are really really really special, enough to overcome their inertia not to buy or not to go far away in order to buy, when instead there are substitute products available locally.

(Note also that spreading venues is also a way to introduce audiences to different or “new to them” locations and organizations.

3. But the idea of shifting store organization and marketing and branding and specialization to “stores within a store” was a good one. Adding name-”r” brands like Martha Stewart makes sense to differentiate their offerings, and provide people with more reasons to shop at JCP.

The lesson here is trickier. It depends on the discipline, the range of available programming within that discipline in your community, whether or not you have the capacity within your organization to broaden your offerings etc. (this is discussed in the present blog entry in “Real Clear Arts” about the Denver Art Museum.

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In direct marketing when you test changes typically you change only one thing at a time. (There are other statistical techniques which allow you to test multiple changes simultaneously.) The reporting on the failures at JCP are an illustration of why this is–when multiple changes are made and multiple responses are occurring, it’s very possible to misinterpret the results.

I hadn’t been to a JC Penney’s store in a decade but during the last year, I’ve been twice. I wasn’t drawn by the pricing but rather by their likable new advertising and promotion materials that made their clothing seem attractive (and reasonably priced). Their CEO renovated the stores’ look and product line–and made sure I learned about it. He was doing something right.