The Toronto Symphony Orchestra* faced two alarming trends:
- Customer retention had dropped from 80 percent to 69 percent in the previous four years, significantly underperforming peer cultural institutions.
- Revenue trends were disheartening. In the previous three years, subscription revenues had remained flat while costs rose 10%. Other revenues were projected to decline by 10 percent, and government funding (over 25 percent of revenue) was expected to decrease in coming years.
Bain was asked to devise a turnaround strategy that would:
- Increase the size and profitability of the subscriber base
- Determine the economic value of strategic alternatives
Bain used a three-pronged analytical approach to develop an initial fact base.
Based on key findings, Bain recommended targeting controllable factors to boost retention and revenues.
Bain recommended five initiatives to support the key findings. The Toronto Symphony Orchestra implemented several of these initiatives, resulting in a significant increase in customer retention.
* We take our clients' confidentiality seriously. While we've changed their names, the results are real.