The latest edition in the #ArtsManaged video series explores marketing in the arts, and the useful framework of “search,” “experience,” and “credence” goods. Understanding the nature of the opportunity you offer your potential audience, and how they might evaluate and decide upon that opportunity, is a core bit of business to attracting and retaining a crowd.
- Search Goods include commodities such as rice, flour, or gasoline, where the buyer has a clear perception of what they want and a high degree of certainty it will be useful in a predictable way. Here, consumers can search for and compare multiple options, often deciding based on price or convenience or terms of sale.
- Experience Goods have qualities that aren’t known until they are experienced – quality, benefit, value, utility (think wine or hotels or restaurants). This leads to high uncertainty before purchase and therefore a more costly discovery process. After the experience, the participant can readily evaluate their satisfaction or the utility/quality of the experience. Which is why word of mouth, audience testimonials, and other forms of social evidence are powerful resources for marketing.
- Credence Goods have unknown qualities prior to the experience, but also after. Because the outcomes are difficult to observe directly – think here about auto repair, medical services, multivitamins – evaluation is costly before and after the experience. Here, consumers may look to expert opinion, evidence-based inquiry, or even symbolic elements like price (if it’s more expensive, it must be better).
Arts experiences can live in any of the three categories – and even a single arts experience can occupy different categories for different potential audiences. The trick is knowing how to “manage evidence” to help potential audience members reduce their uncertainty about your arts experience, or about you.
Sources and Resources:
- Nelson, Phillip. “Information and Consumer Behavior.” The Journal of Political Economy 78, no. 2 (1970): 311–29. https://doi.org/10.1086/259630.
- Darby, Michael R., and Edi Karni. “Free Competition and the Optimal Amount of Fraud.” The Journal of Law & Economics 16, no. 1 (1973): 67–88. https://doi.org/10.1086/466756.
- Ekelund, Robert B., Franklin G. Mixon, and Rand W. Ressler. “Advertising and Information: An Empirical Study of Search, Experience and Credence Goods.” Journal of Economic Studies 22, no. 2 (1995): 33. https://doi.org/10.1108/01443589510086970.
- Wieneke, Dave. “Customer Strategy Foundation: Search, Experience and Credence (SEC) Analysis Determines How Customers Buy.” Rutgers Business School-Newark and New Brunswick, January 29, 2019. https://www.business.rutgers.edu/business-insights/customer-strategy-foundation-search-experience-and-credence-sec-analysis.
Marketing the arts is largely about getting people to know about, care about, and actually participate in an arts experience. And, if you’re good at it, getting them to come back again and again.
I’m Andrew Taylor. I’m on the faculty of Arts Management at American University in Washington, DC.
And this is ArtsManaged, a series of resources about Arts Management – what it is, how it works, how you can get better at it.
In this video, we’re exploring the world of arts marketing, which is one of the “Ten Functions of Arts Management” discussed in a different video. And while it can take decades of inquiry, experience, and experimentation to truly master arts marketing, we’re going to focus today on a particularly useful piece of the puzzle.
In short, we’re going to talk about three categories of goods and services; the different challenges these categories present to the person making a decision; and therefore the different strategies you require as an arts marketer to engage those challenges.
To cut to the chase: Those three categories are search goods, experience goods, and credence goods.
Before we dive into definitions, take a minute to think for yourself about how you look for and then decide upon things you’re going to buy or things you’re going to do. Sometimes you know exactly what you want. And you’re highly confident that you can determine the quality or utility of that good or service before you buy it. Sometimes it’s more difficult to determine quality or utility, because there’s a variety of options, and each might connect with your own needs in a different way. And finally, there are goods and services that are difficult to determine in advance their quality or utility to what you want, and even after you experience it, you’re not entirely sure whether or not it was good or useful.
That in a nutshell is the difference between search goods, experience goods, and credence goods. And arts experiences can show up in all three of those categories. So let’s talk about them one at a time.
Search goods have a low cost to the consumer of determining quality or utility before you buy them. Think here about commodities like rice or flour or gasoline for your car. You know exactly what you want. And you have a high level of certainty that whichever you pick will be useful to you in a predictable way.
But then there are goods and services where it’s more difficult to determine the quality or utility of the options available to you. It takes more effort for you to figure that out. And therefore there’s a higher cost of determining quality and utility among your many options. These are what are called experience goods, because you can’t actually know their utility or quality until you experience them – until you’ve tried them for yourself. Think here about hotel rooms or wine or restaurants that you haven’t yet visited. Even if you’ve heard good things about them, you can’t actually know whether they’re going to be useful or beautiful to you until you’ve tried them yourself.
And then there’s a third category of goods and services, where it’s difficult to know in advance the quality and utility, and even after you experience it it’s difficult to know whether they were good or useful. Think here about things like multivitamins, or trips to your auto mechanic, or trips to your doctor – where because of the nature of the service or the good, you can’t really know without additional effort whether or not what you were given was good or useful.
These are called credence goods because they require additional credence or additional information to really determine whether they were good or useful to what you had in mind. You need an additional expert, for example, or additional information or evidence to prove the point that this was the best choice to make.
Think again about multivitamins, how would you know without extensive additional research whether one form of multivitamin was better than another in your own experience.
So those are three categories of goods and services: There’s search, which has a low cost for the consumer to determine quality and utility; there’s experience, which is a higher cost for the consumer to determine quality and utility but after they experience it they know pretty well whether it was good or useful; and then there’s credence goods, which have a high cost to determine quality and utility in advance and a high cost after the experience even to determine quality and utility.
An arts marketing maven friend of mine, Neill Archer Roan, taught me a while ago that arts marketing was really about managing evidence. And you can see in the case of these three categories of goods, you need different kinds of evidence and different levels of engagement to help a consumer or audience member think about and choose you.
Pretty much all arts experiences could be considered at least experience goods. That is, you can’t know for sure whether something is useful or beautiful or quality until you experience it yourself. And therefore you have to make a complex and difficult choice in advance of the purchase.
So how does arts marketing come into play with an experience good? Well, for one, you need lots of evidence that the experience is worth it: That it is good, it is useful, it is beneficial to those who participate in it. And you do this through evidence of other people’s experiences. So, quotes and testimonials, those videos of people after a show being all excited and thrilled about what they just saw, critical reviews in the newspaper or online. These are all forms of evidence that you might manage as an arts marketer to help people understand that committing to your work is worth the risk.
Obviously this can be difficult in many cases, when you’re presenting producing a work for the very first time. How are you or anybody to have evidence about whether or not it’s a good experience for the people who might come?
This is here again why we might favor having stars in the lead, or other indicators that this is a quality performance or production or work. We might reference the past work of the artists and how well it was received. We might need to use evidence that isn’t about the current event or experience, but about the components that went into it, or the pedigree of those who assembled it.
And of course, digital technology and social media have provided a thousand new ways for people to share their experience and their evaluation of utility or beauty or quality, so that others can learn from and make choices about what they’re going to do next. Here you can see social media posts being really important, or online rating systems like Google or Hotels.com or Yelp. Any platform that gathers or aggregates or ranks and rates other people’s experience becomes really important to this work.
But let’s also consider the arts as a possible credence good. And I’m sure you can all think of a time when you attended an arts event or had an arts experience and you weren’t even sure after the fact whether it was good or useful or quality or beautiful. It was either entirely new to you, or you had no basis to compare it. Or you had no way after the fact of knowing whether this was the best choice of your many options for how to spend your money, attention, and time.
Here again, in the search process, any consumer would benefit from other people’s experiences, whether professional critics or people like them, or word of mouth from friends and family.
But even after the fact you have opportunity to inform and influence the way they consider the experience. You can change their mind, or push them toward the positive or negative, in how you talk about and share back what their experience was with them.
Here’s why particularly smart arts marketers don’t stop doing their work once the ticket is purchased or the event is attended. Even after that fact, you have an opportunity to inform and animate and elaborate someone’s experience. And they’re still deciding whether or not it was worth it for them.
So as you plan and produce your marketing activities for a particular event or even for a whole season of events, it’s really worth thinking about whether what you’re providing is a search good, an experience good, or a credence good. And whether that might be different among many different kinds of attendees that you hope to attract to the work.
Some participants might consider what you do a search good because they have high confidence and high certainty that the artist or the work or the effort is something they know and they’ve seen before. And they’re pretty sure it’s gonna give them what they’re looking for. Others might need a little bit more information in advance to understand whether and why this particular choice among all the other possible choices is really the one they should choose. And then still others, even after they’ve experienced it, will need more evidence or reinforcement or encouragement or connection to understand and decide for themselves whether what they experienced was really worth their time.
And across all of these categories of possible goods and services, whether search or experience or credence, it’s also important to consider what kinds of outcomes or values people are looking for in the work itself, and what a wide variety of outcomes they might be seeking.
For example, people might be coming for the artwork itself. Or they might care about the people who are making the work or supporting the work as it is created. Or they might be looking for a social experience, something they can share with people they care about and talk about afterwards. Any of these may be the reason they’re attending the event, and therefore any of these may be the ways they measure success or quality or utility or benefit.
Marketing expert Theodore Levitt once said, “People don’t want to buy a quarter-inch drill. They want a quarter-inch hole.“ So it’s worth thinking as an arts marketer: What is the outcome that people have in mind when they attend or consider or search for or evaluate your arts experience?
Of course, there are a million reasons people might come or not come to experience your work. But I hope this framework gives you a way to usefully sort those million possibilities into three categories of consideration: search, experience, and credence.
William Osborne says
It’s most likely irrelevant, but the little city of Pforzheim, Germany (pop. 120,000) has a full time, year-round opera house that seats 500 people—one of 83 full time operas owned and operated by the government in a country with a land area the size of Montana. The small orchestra and chorus are full time employees and the opera singers usually have temporary contracts. They have an excellent online ticketing system. Pforzheim is about 45 minutes from Stuttgart which has one of the world’s best opera houses, but every little city in Germany seems to want its own opera house and company.
Tour bus companies in Germany offer a variety of day trips, things like going to a nearby spa, or to the Black Forest or mountains. They often cater to rural people, often the wives of farmers, foresters, construction workers, or whatever who really need to get out of the house for day. They usually don’t have a lot of money. Sometimes the tour bus companies offer trips to the opera in Pforzheim. One can get great seats for $25, or more modest ones for $10. (The music often isn’t so great and often features Mozart or operettas.) The rural people are often very simple folk, and can’t rationalize spending money just on a trip, so the bus companies often offer something practical to go along with it like a set of scissors, a knife sharpener, a small set of screw drivers, etc. I’ve even seen them offer a carton of eggs. So, one can go to the opera and have an ethereal experience, but have the consolation that you also got a dozen eggs. (Well, in Europe they actually sell them in cartons of ten.)
Anyway, I thought of this when I saw your commentary speaking of art as goods. I guess Americans do the same thing, in a way. They get rich people to hand over large sums so they can get their name on a balcony, a wing, or a coffee bar, or something. I’ll need to study this more closely to see how the arts become goods. Of course, approaching the arts as goods also helps us situate it in the marketplace instead of the European approach which defines them as a publicly funded common good. The approach of goods vs. the common good, defines the huge gap between the USA and Europe about the relationships of the arts to society.
William Osborne says
Yes, I understand, I think. If artists want people to come experience what they do, they have to ask themselves the simple and all-important question, “What’s in it for them?” At any rate, a carton of eggs doesn’t hurt.
Andrew Taylor says
Thanks William. Loved learning about how Pforzheim, Germany, provisions cultural experience for themselves and their visitors! I don’t intend to use the term “goods” to suggest crass or commercial offerings. Rather, “goods” is an economic term for anything that can provide value. And, further, in this video, whenever I say “goods” I really mean the more inclusive “goods and services.”
Trevor O’Donnell says
Great post, Andrew, and excellent advice for marketers of commercial goods and services.
I’m not sure it’s right for the arts, however.
In the arts, we promote our products to avid, pre-motivated consumers. This puts us squarely in the search goods category.
We do try to entice less motivated consumers with experience goods marketing, but we do it by crowing about the experience we think they should want, not about the experience they’re looking for.
And we don’t do credence goods marketing because we’re not concerned with “the outcomes or values people are looking for in the work itself, and what a wide variety of outcomes they might be seeking.”
If you express these three categories on a continuum, you’ll discover that the farther you move from the search end toward the credence end, the more you need to understand and respond to the desires and expectations of under-motivated audiences, and this is something the arts were never designed to do.
To use your drill analogy, the arts don’t care what sort of hole you need to drill. We’re here to sell you a drill that makes what we believe is a better hole, whether it’s the one you need or not.
Andrew Taylor says
Thanks for this, Trevor. Although I think we’ll have to agree to disagree.
While the arts, writ large, may primarily market to and engage a population that already wants (or can be convinced to want) what they offer, the story for any particular arts enterprise is a different story.
Why would I attend one theater event over another? Why would I choose to attend a gallery or museum in person, rather than browsing online?
I need to assess the experience I might have, and I often need to commit my time and money to a decision well before I actually get to experience it.
So, I think in some cases, arts can be marketed as search goods. But I think the vast majority of audience decisions are more aligned with experience or credence goods, and therefore need to be marketed as such.
And if we don’t care about the expectations or desired outcomes of our community, then we will eventually (perhaps) not be relevant to them in sufficient quantities to survive.