It's complicated: risk and reward in a return to social experiences
I was eight months pregnant in November when I purchased tickets to see Ali Wong perform in New York City. The show was scheduled for March 31, by which point my baby would be almost 4 months old, I’d be back at work and I could have an actual drink while on a date with my husband! To say I was excited would have been an understatement. The show was going to be held at the Beacon Theater, a lavishly restored theater from the golden age of cinema that holds 2,894 people. Of course, that was all before.
The economic impact of the Coronavirus is far from over. While some states are easing up on restrictions and businesses are reopening, we’re certainly not going to be returning to life “before” anytime soon, if ever. And while salons and barbershops are seeing a massive uptick in activity, it’s likely going to be a while before our more elective pursuits see a return to pre-pandemic levels of consumer engagement. So what can you do if you’re an entertainment brand? (And by entertainment, I’ll group all activities that are optional and unrelated to work or personal care.)
As things re-open, we’re going to see consumer engagement outside of the home driven by three things:
Risk tolerance of the individual
Perceived risk of the activity
Potential reward of the activity
Each individual’s different personal experiences and considerations will determine where on the scale they fall. The closer to positive on the scale that one is, in all three categories, the more likely the activity will occur. Knowing that you cannot control for tolerance, it’s important to determine the perceived risk of your product and where you may fall in the risk vs reward trade off that your customers will make. This will allow you to take appropriate steps first to mitigate the risk and then to increase the reward. Now more than ever, consumers are looking for the companies they engage with to behave in a manner that keeps them safe.
In the case of Ali Wong, while seeing her perform would have been the highlight of my month, my perceived risk of sitting among 2,893 other people would have been far too high for my comfort level. As you can imagine, the show was cancelled and I didn’t need to make the decision to attend or not. Had they not acknowledged the risk of an indoor event in the height of Coronavirus, I would have been very wary of engaging with them in the future. For this show, this is how my scale looked:
The scale will be different for every person and for every experience. When the New York Times surveyed 511 epidemiologists to see when they were likely to start doing certain activities, 64% said that it would be a year or more before they attend a sporting event, concert or play. And a McKinsey survey of US consumers indicates that there could be a reduction in in-person activities for quite a while, possibly even until there is a vaccine. I’ve personally been enjoying PVOD movies more than ever before. Even if the main driver for PVOD release is revenue, brands should not overlook the positive brand association that those of us low on the risk tolerance spectrum will feel for being given new at home entertainment options. For some consumers, going to the movies is a public experience: the screen, the sound, the snacks. Those folks see a high value in going to the movie theater and will be back on day-one, tugging at their mask to toss in a handful of popcorn. Others may continue to prefer the PVOD option because they’re on the lower end of the spectrum, either from a risk or reward perspective. For me, going to the movies looks like this:
The more you do to understand how valuable your product is to your customer and what their risk tolerance is, the better prepared you will be. The first step, if you haven’t done so already is to engage your existing customers and ask them. Fire up your CRM machines with surveys that will help you gauge interest in potential scenarios. Even if response rates are low, you’ll have some feedback to get you started (try for a minimum of 30 responses for qualitative data). There is no one correct approach. As a brand, you need to use your product insights to understand the highest value (or values) you can offer your customer. Here are some actions to consider:
Use your customer segmentation to identify the more and less risk tolerant audiences
Analyze the potential perceived risks that your product poses to these consumer groups
Understand the value you generate for these groups
Following our initial framework, with these three pieces of information you can determine how to balance these considerations in your customer experience. If you can pivot your experience to be digital or televised, that could provide a consistent revenue stream throughout the pandemic since we can expect shutdowns to be reinstated from time to time as the virus ebbs and flows. Of course, not all brands can pivot to an in-home screen. Other options could be a move outdoors or the creation of a more intimate experience that limits the indoor risk. What’s important is to stay nimble, listen to your customers and try different things. You might find that what works one month needs to be adjusted the next, but having a variety of solutions will allow you to serve as many customers as possible. Your customers still want your product, they’re just not sure if they should or can have it the way it was before. And that’s fine. As long as you stay true to your brand identity, with a goal of fulfilling your customers’ passions and a promise to do it as safely as possible, your brand can build a path through the pandemic.
I personally will be first in line for Ali Wong’s next special, even if it’s streaming live from the Beacon Theater.