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Theatre Business 101—
Where the Patron Is Priority One
New Theatre Restaurant creates a “guest-centric”
experience by minding the details, training its staff to exceed expectations
and giving first-rate delivery on a promise of an excellent entertainment
experience
Peter Senge, famed business strategist, calls on businesses
to become learning organizations which he defines as:
…organizations where people continually expand their capacity to create
the results they truly desire, where new and expansive patterns of thinking
are nurtured, where collective aspiration is set free, and where people are
continually learning to see the whole together.
American business struggles with this concept, but here in a Midwestern dinner
theatre this plays out day in and day out. New Theatre Restaurant is a special
place which not only creates a magical evening for its guests, but also spreads
it throughout the entire operation through its employees. A kind of theatre
business nirvana, New Theatre Restaurant is the real deal.
A Lesson in Theatre Business
“We realized that when our guests leave here at night, they really take
nothing with them,” explains Dennis Hennessy, co-owner and artistic director.
There is no product or tangible souvenir of the evening, so the most important
thing the New Theatre Restaurant offers is a unique entertainment experience.
“It’s really the three aspects of that experience: food, service,
and the production--with equal focus on all three,” states Hennessy.
This experiential triad has been researched and fine tuned over and over again.
The New Theatre Restaurant never rests on its laurels and embraces change,
ever so minor, to continuously make their patrons evening increasingly more
enjoyable.
A New Beginning
One does not simply wake up one morning and decide to build and run a profitable
multi-million dollar theatre and restaurant. Understanding and managing the
complexities of New Theatre Restaurant is a process based on over thirty years
of hands-on-experience coupled with exhaustive research.
Starting in the early 70s, Hennessy and Richard Carrothers, co-owner and president,
opened Tiffany’s Attic in Kansas City, Missouri. Within a few years,
they had built a second dinner theatre, the Waldo Astoria. If there is one
thing we can count on in life it is change and that is exactly what happened
to audiences in Kansas City during the 1980s and 90s. Dinner theatre audiences
were fleeing southwest to the suburbs and found the concept of dinner theatre
old and dated.
So the duo set out to better understand their market. In-depth marketing research
was initiated to identify their target audience. Would you believe married,
college educated, combined family income over $100,000, and average age under
40? This runs contrary to many theatres whose audiences are older and not
as upwardly mobile. Hennessy figures that they attract a younger audience
because they do productions that are entertaining and funny. No Greek tragedies
here. But we might also consider that statistics will show that a younger
audience proves to be more demanding of good service with choice flexibility.
This, along with a great product on the stage, are the key ingredients for
attracting this elusive demographic.
With an understanding of who and where their audience resided, the New Theatre
Restaurant was reborn from parents Tiffany’s Attic and Waldo Astoria
in Overland Park, Kansas. Why that name? “Our surveys had shown that
the perception of dinner theatre was worn down, tired,” offers Carrothers.
“With the name, New Theatre Restaurant, we were subliminally saying it’s
new and it’s different.”
Business 101—Taming the Three-Headed Monster
For most of us, we only have to worry about two heads—service and the
performance. Sometimes we focus too much on what’s on the stage leaving
our patrons to fend for themselves purchasing tickets, finding parking or
getting their special requests fulfilled. While building the New Theatre Restaurant
no detail was overlooked or thought insignificant. “When we made the
move, one of the strongest shifts was the emphasis on customer service where
we focus more on the guest experience,” remembers Joe Fox, Vice President
of Productions. “The whole operation, geography and architecture of the
building were all geared with the customer experience in mind.”
The Production—Physically, the theatre was designed so that each of the
sightlines from every seat was concave so that each guest had the ultimate
experience from where they were sitting. A temperature control and monitoring
system was installed to quickly to adjust the temperatures in every room or
zone to a comfortable 70 degrees. A state-of-the-art sound system was added
that had over 100 speakers to insure a crisp and clear production sound from
every seat in the house.
As for what was on the stage, New Theatre Restaurant never stops asking their
customer what they liked and didn’t like. How would they like a certain
celebrity performer playing that part? Which play would you like to see next
season?
Visiting performers in a production at New Theatre Restaurant get their very
own actor concierge, or company manager, who helps them secure everything
they need during their stay.
Celebrity actors are provided housing in a beautiful home furnished with antiques,
adorned leathers and two luxury cars at their disposal. These and many other
pampering amenities keep star talent coming back year after year.
The Food—New Theatre Restaurant uses only fresh ingredients to makes
sure the bottomless buffet-style feast is as memorable as the show. “I
wanted to go with a menu from scratch where everything is created from raw
products,” explains Mark Rohman, Vice President of Culinary Services
and Operations. “We keep our costs down on food so we can pay more for
our kitchen staff, because I want a stable team,” By taking that approach
New Theatre Restaurant has a lot better food and a happier, more efficient
kitchen.
Their mission is to never run out of food, which some would say can’t
be a cost-effective proposition. They don’t want anyone feeling like
they didn’t get their money’s worth because they were too late to
the buffet. And this helps as a safety precaution to hinder the stampede caused
by the fear of running out of shrimp!
The Service—This doesn’t just apply to the external customer or
audience, but New Theatre Restaurant looks at its employees as internal customers
too. Comprised of managers, staff and actors, Hennessy has built a foundation
of performance excellence by nurturing and training his team.
Hennessy learned early in his career as he struggled with the business side
of theatre. A graduate of the Arts Administration Program at Harvard Business
School, Hennessy concludes, “All I had was a degree in theatre and if
you’re going to make it in the theatre business, you need to know operations,
how to market, how to handle the books, how to budget, and management skills
to make it work.”
“Dennis’s management style is truth at all cost. You know he is
always going to tell you exactly what he thinks, without blame or judgment,
and you go away knowing how to work on that,” reveals Carrothers.
This philosophy permeates throughout New Theatre Restaurant to allow people
to try new things, make suggestions or even explain what isn’t working
to management. With no retribution or fear of losing one’s job, employee
opinion is valued and sought after.
Hennessy adds, “We never want anyone to feel threatened, scared, or intimidated
because it is so counter-productive to what you are trying to accomplish.
If you believe in that staff member, it’s important for you to encourage
them and make them better than who they are at that time.”
To help with staff retention, New Theatre Restaurant has a hiring process
that identifies those applicants with the right traits. Several interviews
are conducted with a variety of team members to make sure that the best candidate
is hired. Carrothers points out that it is very costly to find a replacement,
so treating staff members as though they have an equal voice with management
and recruiting the right person adds greatly to staff retention.
And Let’s Not Forget the Marketing
New Theatre Restaurant has an intimate understanding of their patrons based
on quantitative and qualitative data. The New Theatre Restaurant believes
the greatest way to insure customer satisfaction is to galvanize a connection
into the thoughts of your external customers. There is consistent dialogue
asking for opinions on a variety of topics including food preferences, plays
selection or interest in potential celebrity performers.
Perhaps the most impressive examples of this interaction come from the comment
cards collected from a random sampling of the audience in the first weeks
of a new production. They have developed and basically live by this customer
comment card. Setting their standards at 4.5 or better on a 5 point scale,
the marketing team does all it can to secure this benchmark score. Based on
a scoring system covering six areas of customer service, a cumulative average
score equates to an excellent customer experience. This system is so definitive
that a score of 4.5 or higher signals the marketing department to immediately
discontinue paid advertising because the remaining shows are certain sell
outs, saving money.
Trailing only the Kansas City Chief’s in their area in season ticket
sales, New Theatre Restaurant sells over 24,000 season tickets, representing
55% of their annual ticket sales. The remainder of their sales comes from
single ticket purchases (25%) while group sales make up the remaining 20%.
Carrothers points out the importance of group sales even though they could
sell out the entire season by subscription. “You need to cultivate a
new audience, otherwise they get older and older, and you end up playing to
a market that will die off, or move on.” Ideally with groups, New Theatre
Restaurant focuses on bringing younger newbies who would never think of going
to the theatre. Once they see a show the odds are they will come back and
bring family and friends.
This balancing act also helps keep the organization in a proactive position
when trying to remedy the audience loss after an incident like 911. “The
minute sales started to diminish post 911, we said okay we’re going to
put more season tickets up for sale, and they sold immediately,” recalls
Carrothers. “If one area of revenue starts to weaken, you have another
one you can bring in, sort of a military way of running it.”
Following its namesake, New Theatre Restaurant also tries new and innovative
ways to build awareness and make ticketing purchase even easier for its patrons.
Rob McGraw, vice president of marketing and sales, crafted an idea to increase
gift certificate sales during the holidays. “I went to Dennis and Richard
to suggest we build a booth at the busiest mall in the area to sell gift certificates
to shows. It was immediately successful, we paid off the initial investment
within the first 30 days,” says McGraw.
Although the owners hadn’t exactly been sold on the idea, they decided
to respect and support Rob’s vision and contracted their own scene shop
to build a portable sales booth for the marketing department. McGraw’s
idea morphed into a whopping $1 million dollar bonanza in gift certificate
sales just in the months of November and December. And while it was never
their intention, many gift certificates are never redeemed making this a very
profitable endeavor.
Boiling it Down to Taking Care of the People Who Care
for Your Patrons
Customer satisfaction is a direct derivative of how you treat your staff and
that couldn’t be more true at the New Theatre Restaurant which is why
they offer employees a salary and benefit packages that include a 401K, dental
and health insurance.
“We believe it’s the staff who really runs the place, and it’s
them that interacts with guest after guest,” states Carrothers. This
interaction is what creates the repeat customer who brings back friends and
family to share this entertainment experience.
While the theatre holds a 10% profit margin on ten million a year in revenue,
the employees receive a portion of that profit. In 2005, 60 of them shared
$450,000 with the rest going to capital improvements. “I would dare say
that we’re probably the only performing arts organization in the United
States that takes most of its profits and gives it to their staff,” comments
Carrothers.
And that’s why you need to stand in line to get a job at the New Theatre
Restaurant. Retention from the kitchen is extraordinary, partly because they
have a four day work week of 10 hour shifts. “Some people can get six
days in a row off, depending upon the timing of the productions and their
four day work week,” explains Carrothers.
“In most restaurants, the chef, the sous-chef, or the people on site
don’t get home to their families, until the doors close after 10:00 pm.
Our dining service is over at 7:40 pm, so our staff is home with their families
by 8:00 pm or 8:30 pm,” says Rohman. They also budget overtime to cover
for people’s vacations and sick time. Not only do they never run short
on their crew, which may diminish the guest’s experience, but they also
compensate the staff when they have to go above what is expected.
Karma
There are so many times New Theatre Restaurant’s desire to improve customer
service has resulted in a positive outcome for all involved. This is the case
of the bottomless buffet and over-preparation of food. Rather than scrap what
is extra, New Theatre Restaurant boxes and freezes any leftovers and donates
them to homeless shelters, making them the fifth largest provider of food
to the down-and-out in Kansas City.
And while some may point out the tax benefits, New Theatre Restaurant provides
a wonderful humanitarian service welcomed by the community it continues to
serve in so many ways.
With the success of their for-profit theatre, they support local not-for-profit
theatres both financially and with their counsel. They contribute money to
continually promote the Arts in Kansas City, but also personally support theatres
by sitting on their boards and becoming involved in civic organizations.
In the world of entertainment, there are many who talk the talk but this is
an example of an organization that walks the walk.
Continue the conversation online in the forums at www.dramabiz.com/forum.
