Developing a CRM Strategy

Using a CRM strategy is probably one of the best solutions for the problem in the following case study. Your task in this activity is to develop a strategy to increase attendance for this organization’s main event.

Please note that there is an updated version of this activity now available, which also includes an interactive spreadsheet.

ACTIVITY/TASK

You’ve been called in as a consultant to help the organizers of a “religious music festival”. This festival is held each year over an October weekend in a small country town about 2-hour drive from a major city. The festival has been held for 7 years with moderate success. However, the organizers believe that it has far greater potential.

Recent Attendee Survey Results

Attended before?

Yes = 21%

No = 79%

Age Group

Under 15 = 12%

15-19 = 30%

20-24 = 38%

Over 24 = 20%

Awareness of event

52% family/friend

18% church

15% brochure

12% web site

3% other

Attend with a group?

Yes = 74%

No = 26%

Are you religious?

Yes = 59%

No = 41%

General Background Information

 Promotion Methods Used

• Web site
• Brochures sent to major church youth groups

Pricing

• Adult = $15 per day or $30 for 3 days
• Students = $10 per day or $20 for 3 days

Facilities

• Basic food/drink outlets
• No alcohol
• Some security/medical
• Portable toilets

Accommodation/Transport

• Caravans and camping within 15mins
• No transport

 

FINANCIAL OVERVIEW	Year 1	Year 2	Year 3	Year 4	Year 5	Year 6	Year 7
Attendance	700	1,200	1,900	2,500	2,800	3,000	3,200
Avg Entry Fee	25	25	25	25	25	25	25
Total Entry Fee	$   17,500	$   30,000	$   47,500	$   62,500	$   70,000	$   75,000	$   80,000
Food/Drink Sales	$   21,000	$   36,000	$   57,000	$   75,000	$   84,000	$   90,000	$   96,000
TOTAL INCOME	$   38,500	$   66,000	$ 104,500	$ 137,500	$ 154,000	$ 165,000	$ 176,000
Web Site	0	0	0	$     5,000	$     5,000	$     5,000	$     5,000
Brochures/Posters	$   20,000	$   20,000	$   20,000	$   20,000	$   20,000	$   20,000	$   20,000
Security/Facilities	$   10,000	$   10,000	$   10,000	$   10,000	$   20,000	$   20,000	$   30,000
Administration	$   15,000	$   15,000	$   15,000	$   15,000	$   15,000	$   15,000	$   15,000
Cost of Food/Drink	$   10,500	$   18,000	$   28,500	$   37,500	$   42,000	$   45,000	$   48,000
Equipment hire	$   30,000	$   30,000	$   30,000	$   30,000	$   30,000	$   30,000	$   30,000
TOTAL COSTS	$   85,500	$   93,000	$ 103,500	$ 117,500	$ 132,000	$ 135,000	$ 148,000
GROSS PROFIT	$  (47,000)	$  (27,000)	$     1,000	$   20,000	$   22,000	$   30,000	$   28,000

Environmental Analysis

Corporation

• It is important that the event maintains a religious message.
• Looking for the event to earn a profit of $100,000 plus in coming years.
• Limited/no funds to contribute now – needs to be self-supporting.

Competitors

• Other concert events are growing in popularity – likely to clash on some weekends.
• Non-music (e.g. sporting events) are competitors as well
• Increasing numbers of ‘no alcohol’ events for teenagers/young adults.

Customers

• Focus groups indicate that participants are generally satisfied.
• Travel is a concern – and need to organize their own group travel.
• Word-of-mouth recommendation appears to be the strongest reason to go.

Social

• More emphasis/acceptability of more diverse events
• More affluent teens and young adults.
• Decreasing church attendance levels.

Technology

• Virtually all teens and young adults have access to internet.
• Quality of music and sound is expected to be very high.

Economic

• Continued economic growth expected.
• Youth unemployment still expected to remain at high levels.

Political

• Big problems with public liability – will need $30,000 insurance policy next year.
• Likely to be increasing requirements on health (e.g. food), security and safety.

 

QUESTIONS

1. What is their financial/profit forecast without a strategy change?
2. Therefore, how much extra profit will a strategy change need to generate?
3. Outline a relationship-based marketing strategy to recover this profit shortfall.