Jean David’s Quel Cirque, Part 6 of 12: “Strategy”

We were quite open-minded toward our competition. There was no direct rivalry with traditional circuses. Our customers and products were very different from theirs; so we didn’t consider them rivals. Our real competition came essentially from cultural products like movies, festivals, theater, dance, and opera. Our clientele had a higher than average income, but they were also much coveted. So vigilance was the watchword if we wanted to attain the enormous sales objectives we set for each city.

Engaging in lengthy presale periods was one of the best ways to maximize commercial performance. Our growing fame allowed us to offer tickets to consumers from three to twelve months before a show hit a city. We let them know several months in advance that we’d be back with a brand new product. Consumers could plan their entertainment budget accordingly. We realized they had to make choices. Of course, this approach required rigorous planning and skillful coordination of our activities but it offered multiple advantages. It forced us to act promptly in negotiating and signing land lease contracts. In so doing we had a better choice of sites.

Because we were prepared well in advance, we had a chance to “shop around” and tie up our media partnership agreements well in advance. Since the media hadn’t yet committed their entire budgets and had to plan their activities effectively, our prompt approach was always welcome and, as a rule, their proposals were quite generous.

Thus, we were in a proactive position vis-à-vis our sponsors. I soon realized that our strategic planning activities had a remarkable impact on them. They considered us credible partners. Even more important, we were a real asset in their own planning of marketing activities.

Long presale periods did not result in additional advertising costs. On the contrary, we were able to maximize the reach of our advertising investments. We were also able to develop innovative promotional programs with our sponsors and our partners in the media. We could put in place all the ingredients we needed to create and build a real event. Word of mouth, the primary factor in our customers’ decision-making process, could circulate and operate freely. Because we were well prepared, time was on our side! I thought we had to take full advantage of the situation.

As a manager, I had to make daily decisions that directly impacted the Cirque, our brand image, and our audiences. One thing about our shows that I always bore in mind and that I tried to share with our collaborators was that our audiences are intelligent. To some people, this may have seemed obvious, but it was a defining characteristic of the Cirque du Soleil. The artistic team never forgot that our patrons were discriminating. It was a basic premise of the Cirque experience itself. I believed that we had to bear it in mind in everything we did, whether it was in our advertising campaigns, our communications, our promotions and our customer service policy.

In my initial contacts with sponsors, business partners and the media, I noticed that many of them were under the illusion that you couldn’t ask too much of the public. In their eyes, the public was dull, unsophisticated. You could put things over on them. I found this attitude surprising; I refused to accept it. I was certain it had no basis in fact. So we had to educate our new collaborators.

I insisted that our publicity be serious. There was no room for puffing the product. We also avoided giving too much or too little detail. Our public could figure things out for themselves. As well, ticket prices wouldn’t discourage our customers. But when we first approached American cities about an eventual tour, our sponsors and media partners suggested that we offer price reductions or put discount coupons in papers and magazines.

They were very surprised when we told them that our customers couldn’t care less about reductions. The most expensive tickets were always the first to sell out. Our customers wanted the best seats, period. Similarly, the announcement of our arrival created a remarkable interest, partially due to the hallmark quality of our product.

From 1990 on, we developed an almost permanent tour plan for North America for a two and eventually a three-year period. Our fans knew that the shows had a limited run so they’d have to wait at least two years before they could see us again. This helped build interest. Cirque was in a very different position than theater, classical music, and modern dance. No products in our market were really comparable to our shows. The fact that our product was so rare boosted presales. It also heightened media and consumer appreciation of the shows. Rarity, long an important brand characteristic, placed us in a privileged position in the minds of our audiences.

“Our show will be held over!” Among the marketing elements contributing to our success was the policy of putting tickets on sale in stages. If, for example, we planned on giving 60 performances over a seven-week period in a big top that seated 2500, we could expect to draw a total of 150,000 spectators. Until the late 1980s, it was our practice to put tickets on sale for our entire stay.

But we found out that most people bought tickets for shows in the last weeks of the run, leaving our first weeks half empty. The phenomenon generated overall occupancy rates that could vary between 70% and 80%, even if the final weeks were sold out. To remedy the situation, we sold tickets for an initial number of performances and then announced that the show would be held over. For example, if there were 60 performances in seven weeks, we would sell tickets for the first three weeks, that is for 20 shows. And, as soon as we had sold 70% of the tickets, we announced that there would be additional performances for one or two extra weeks, and so on until all the tickets for the entire seven weeks were on sale.

This approach gave us sold-out performances right from the start of an engagement, intensifying word-of-mouth activity and allowing us to achieve 95% occupancy. The approach seems quite normal today, but, at the time, applied systematically and meticulously from town to town, it was highly innovative and produced fantastic results.

Mark of Excellence

Until 1989, but for our first incursion into Ontario as “Sun Circus,” our shows were billed as Cirque du Soleil in every city we visited. Sometimes, we used the slogan We reinvent the circus or La magie continue (The magic continues). Everything went swimmingly until 1989, when we returned to Santa Monica Beach with a slightly modified version of the show we’d put on earlier in California. But Los Angeles Times Critics sounded a bit of a sour note. If you’ve seen them already there’s no point going to see them again, but if you haven’t, it’s worth checking them out, they advised. It was the first time we’d had comments like that. The show seemed a little déjà-vu, and we began to understand the risk we ran.

Traditional circuses face the same kind of challenges. Year after year, they return to the same cities with the same acts, the same tigers: the same old same old. It’s the kind of situation that we absolutely wanted to avoid. Our show was particularly valued for its rarity. Clearly, we had to provide our loyal fans with new adequately promoted fare.

At the time a completely new show was in the works for our 1990-1991 North American tour. We were reinventing ourselves! Upon reflection, we concluded that we had to give our show a distinct name and identity. We needed to identify the distinctive characteristics of each new creation, baptize it like a newborn baby, and give it a personality that the public could easily recognize. So, the name Cirque du Soleil would appear under the new trademark, giving it the stamp of quality.

Thus Nouvelle Experience/Cirque du Soleil was born in 1990. It was both the show’s title and a promise we were making in our advertising: “Cirque du Soleil is offering you a new experience.” But we had to be prudent about this experiment. That’s why proposed titles like Big Bang and Gaia were turned down. From then on, every new production would be given a title once and for all. That’s how a powerful company tradition was established: giving each show a name establishing its identity. So Fascination, Mystère, Saltimbanco, Alegria, Quidam, O, La Nouba, Dralion, and others saw the light of day.

Obviously, this decision made life much easier for everyone. When I say everyone, I’m thinking of the artistic team in particular. Their orders couldn’t be simpler: give us a new show, PLEASE. It also facilitated the marketing team’s task: we were offering a new product, with new artists, music, decors, costumes and acts… The media couldn’t wait to get a glimpse of it. Finally, the titles made for stimulating conversation: I saw Kà and Mystère; I wanted to see Saltimbanco; I loved Alegria and Love; I was looking for tickets for O… What more could we ask!

The practice of personalizing shows ran into difficulty right from the very start. It was the fall of 1991, in the old fire station, the company’s Montreal headquarters at the time. There was a very important meeting with representatives of Fuji television Network, the biggest private TV network in Japan. None other than head honcho Dan Yoshida led the Fuji delegation. He had come to negotiate with us about Cirque’s first Japan tour. I attended the meeting with Guy Laliberté, who chaired the negotiations and Roger Parent, our delegate producer. Negotiations were all but rapped up. But there remained one little detail: Yoshida had a personal request.

He wanted us to call the show Fascination. He liked the name. Fine. No problem, we thought. But he had another request he considered even more important: he didn’t want the name Cirque du Soleil to appear under the show’s title Fascination. It would only complicate things for the Japanese public, he argued. They couldn’t understand or pronounce French words. This was the first time we were negotiating with the Japanese, and the stakes were high. It was a $40 million operation, the biggest tour in the history of the land of the rising sun.

Like a true CEO, Guy Laliberté was eager to clinch the deal; he immediately accepted Dan Yoshida’s proposition. I literally jumped out of my seat. The idea didn’t square with our brand positioning. While Roger steered Guy away from the discussion so I could intervene, I told Mr. Yoshida that we couldn’t accept his request because it violated the basic principles of our marketing plan. “Cirque du Soleil” was a stamp of quality, a mark of excellence. Like Chanel or Louis Vuitton, it was a trademark. And with his know-how and support, we intended to develop the brand and make it increasingly popular with the Japanese public.

After a few vigorous exchanges long remembered by my Japanese counterparts, Yoshida came round to my point of view, which I took as a “sign of trust.” It was a narrow escape. Eventually, the Cirque du Soleil trademark was just as solidly established in Japan as it was in the United States, Canada, and elsewhere in the world.

Gearing Up

One morning early in the 1990s, I addressed the bimonthly executive meeting of Cirque du Soleil. The company was engaged in an intense period of activity: for us it was business as usual. I had asked to make an important announcement to the entire management team. I really set it up — I was enjoying myself — “My friends I have big news,” I said, “Starting tomorrow, Cirque du Soleil ticketing services will function 24 hours a day, 7 days a week, 365 days a year!” To say the least, I hadn’t anticipated the committee’s reaction. There were shouts of: “Sheer nonsense! It just can’t be done. What are you talking about?” At least the meetings were never dull.

My colleagues were incredulous. I feared there would be a serious learning curve. Management was absolutely convinced that what I told them was impossible. They didn’t believe we could change the way we did things, especially in as sensitive an area as ticket sales. So I pointed out that we had engaged in rigorously coordinated planning with our ticketing centre and our tour development director to set up a presale system in North America that eliminated delays from town to town and year to year.

Everyone was curious to learn more, so I continued. I told them we were even going to put tickets on sale for coming productions that were getting under way in Montreal though we weren’t sure what the content would be. The public was convinced of the quality of the product we were offering them. What they really wanted was to have good seats. We had already confirmed the scheduling for the new shows with the artistic team. There remained to finalize an agreement in principle with Montreal’s Old Port, which had already assured us of their collaboration; that was enough for us to proceed with ticket sales.

We were merely offering tickets for the new show. We would give details about the production at the appropriate time and place. From then on, there would always be tickets on sale for a Cirque du Soleil show. Always. Our tickets would be available 365 days a year. Then I said something that really made their eyes light up: “These presale changes will increase our liquidity!”

My announcement that morning marked an important stage in our company’s revenue growth and capital management. From that day on, there was no going back. We were innovative; we had to continue to be and go even further.