Measuring return on investment might be tricky, but the world of finance is leveraging arts sponsorships to reach the super-rich, writes Claire Adler
Financial institutions are increasingly viewing the arts as a pivotal tool for building business relationships. Whether it's a behind-the-scenes private exhibition tour with crossdressing artist and curator Grayson Perry at the British Museum, courtesy of AlixPartners, or watching a rehearsal of The Marriage of Figaro at the English National Opera and then chatting to director Fiona Shaw, banks, wealth managers and professional service organisations are determined to offer access to experiences money simply can't buy.
"While the market for new clients is more competitive and pressure to retain existing business is mounting, corporations are looking for more unusual experiences with which to engage high-net-worth individuals," says Nicole Newman, development director at the English National Opera. She has seen an upsurge in interest from organisations, including Morgan Stanley and Royal Bank of Scotland, who are entertaining one or two clients at a time, alluring them with invitations to a private tour of the opera set and the chance to meet principal singers and costume designers. "Art, especially opera, can be a very transformative experience and it allows companies to create a much more emotional connection with their clients," says Ms Newman.
Rupert Phelps, director of family office business development at BNY Mellon, agrees. Next month, BNY Mellon hosts an invitation-only contemporary art seminar. "Art events allow us to get to know our clients personally before talking business. We already have acceptances from highly desirable clients to our Frieze Art seminar. It just wouldn't be the same if we were to immediately - and only - talk about finance," says Mr Phelps.
He believes there are signs that financial institutions are reaching out more pro-actively than ever to high-net-worth individuals (HNWIs), and cites increased advertising in the luxury press and larger logos attached to arts sponsorships, as examples. Some companies are making more offbeat choices, acknowledging many clients are already art collectors and investors. RBC Wealth Management, the private banking arm of Royal Bank of Canada, is sponsoring an exhibition of 1920s Canadian artists at the Dulwich Picture Gallery."Research tells us that our target audiences are up to three times more likely to visit art galleries than others," says Mark Fell, RBC Wealth Management's head of strategy, brand and marketing.
Next month, business consultants AlixPartners make their arts-sponsorship debut with Grayson Perry's Tomb of the Unknown Craftsman exhibit at the British Museum. This is also a first for the British Museum in that it includes contemporary artworks by Perry and is the first time a living artist has been hired as a curator. "Some of our clients will fall in love with the exhibition, some may not, but it's unusual and will stay in their minds. We are always looking for innovative, unique and memorable ways to engage with our clients and build on exisiting relationships," says AlixPartners' managing director Pippa Wicks.
While some Western economies are teetering on the brink, the world's biggest financial institutions are being forced to decide how to reach out to a new crop of super-rich individuals. So it is perhaps no surprise that, against a backdrop of relatively robust economic growth in the Middle East, HSBC is now focusing on a global cultural sponsorship programme entitled Arabian Journeys, including a 2012 exhibit at the British Museum dedicated to Islam's pilgrimage to Mecca.
Some organisations might take a leaf out of successful sponsorship models employed by some of Bond Street's luxury brands. Cartier's brimming events calendar offers a glamorous social whirlwind for its clients, culminating in the annual Cartier Polo, which is attended by members of the British Royal Family and is one of the hottest tickets of the English summer season. Geneva jewellers and watchmakers Chopard's 14-year sponsorship of the Cannes Film Festival is a masterclass in celebrity endorsement executed with Swiss precision, while jewellers Boodles hold the annual Boodles Challenge at Stoke Park, a tennis tournament prior to Wimbledon, with sponsors including Patek Philippe and Jaguar.
Milton Pedraza, chief executive of the Luxury Institute in New York, warns against sponsorships without a built-in customer-referral programme. "HNWIs are used to attending fabulous events, so VIP access to cultural events are a great fit. But many wealth advisory firms don't seek referrals from existing customers. With today's scarce resources, this is a mistake," he says. "What if wealth managers aimed to secure three new referrals for every ten clients of three years or more?"
When probed about measuring return on investment, some financial organisations prefer to direct the discussion to talk of being responsible corporate players and thoughtleaders, the difficulty of putting a value on an emotional experience, and the priority being more about sharing experiences and building relationships with existing clients than initiating new client referrals. Deutsche Bank, custodians of one of the world's most important contemporary art collections, claim their qualitative research proves its commitment to arts and music leads to improved relationships. Barclays Wealth, sponsoring the Victoria & Albert Museum's Postmodernism exhibition opening this weekend, employs thorough metrics to measure short and long-term return on investment, such as the number of new-prospect introductions, lead generation and conversion, and customerloyalty.
"We regard a client-endorsed referral as the most rewarding and highest form of endorsement of what we do," says BNY Mellon's Rupert Phelps. For those considering sponsorship ventures, entering the unknown is a common fear. "Sponsorship is like a marriage. There is always an element of risk but, like lots of good marriages, it comes down to chemistry, commitment, and shared goals and values," according to a London specialist in public relations for art. "In the new economic climate, art institutions understand they need to offer new experiences while maintaining their integrity."
English National Opera's Nicole Newman maintains that for corporations who invest long-term, like HSBC and Ernst & Young, the value and return is high. "Edgy, challenging arts opportunities, sometimes with smaller arts organisations, often provide more extraordinary or unusual experiences and deliver better value for money. Arts sponsorship can be adventurous," she says.
To read the full report see: http://np.netpublicator.com/netpublication/n55415154
The Morning Email helps you start your workday with everything you need to know: breaking news, entertainment and a dash of fun. Learn more