Why can’t they get something for that?” asks James L. Nederlander, president of the company. Nederlander, whose family founded and has run the Nederlander Producing Company for more than 100 years, touches on a central question for every business: How can we serve and reward our customers?

Serving customers, building a relationship with them, and achieving a competitive advantage while doing so requires strategic and tactical planning. Nederlander Producing Company is a third generation, family-owned company that owns and manages theaters as well as produces and promotes live shows across the United States and the United Kingdom. Nederlander presents diverse acts such as the Bolshoi Ballet, The Lion King, and Celine Dion. Strategic planning, which includes identifying Nederlander’s primary objectives and figuring out how to attain them, is vital to the company’s longevity. One of Nederlander’s main objectives is to draw more people toward the performing arts—and keep them there.

Recently, the executive team at Nederlander came up with a new way to do exactly that: Audience Rewards. “When I buy Corn Flakes or a stick of gum, I get points,” Nederlander observes. “So why can’t our customers get points for buying a theater ticket?” The program functions much like a frequent-flyer plan for theatergoers. Consumers sign up online for free, get a membership number, and start earning points toward rewards, such as free theater tickets, seat upgrades, Broadway merchandise, and even a photo shoot at one of the red-carpet events. The idea is to motivate people to attend the theater more often and try different experiences. It’s a tried-and-true tactic with several twists, implemented with digital marketing and the human resources to back it up.

You don’t have to see a show to rack up points. You can enter online contests such as “Predictions for Points,” in which you predict the 26 Tony Award winners. You automatically get five points for any prediction, but you could win up to 100,000 points if you get them all right. You can answer Audience Rewards trivia questions throughout the year for points as well. And you can score points through Audience Reward partner companies, such as Starwood Hotels, Delta Airlines, United Airlines, Amtrak, Best Buy, and Points.com. 

Josh Lesnick, president and CEO of Audience Rewards, notes that large corporations have been eager to become partners in Audience Rewards because “we really bring forward a lifestyle product.” For example, a couple who visits New York from Cincinnati may fly on Delta, stay at the Sheraton in Midtown, and buy tickets to see Wicked. Then there’s the fact that the average annual household income for the Audience Rewards target market hovers around $200,000—and companies such as Starwood and the major airlines want access to those consumers.

Audience Rewards doesn’t just benefit theater enthusiasts—it also helps the show go on. Recently, Nederlander ran an Audience Rewards program for the Broadway show Evita, in which marketers sent out 5 million emails over 10 days, offering discounts on advance-purchase tickets as well as other perks. The push generated $1 million in presales, allowing the theater producers to strategically reallocate some resources. On a broader scale, the program gives Nederlander and its partners a central platform across which to market different venues and performing arts genres and opens the door to audience development—which circles back to that initial objective of attracting more theatergoers and keeping them in their seats. 

As a first-mover strategy, Audience Rewards has already sealed the premier spot in the entertainment rewards arena. Nederlander has a century of connections to theater owners, producers, and presenters (not to mention its own string of theaters and productions) that would be tough for any competitor to break. “It would be hard for someone else to do an arts rewards program,” explains Lesnick, “because you have to have the backing of theater companies, and they already back ours.”  

Questions

1. How does the Audience Rewards program support Nederlander’s overall strategic plan?

2. It might seem as though Nederlander’s first-mover strategy has the entertainment rewards market locked up. But what strategies and tactics could a second-strategy mover use to gain access to theater customers?