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Photo credit: http://bit.ly/17JbZsJ

Photo credit: http://bit.ly/17JbZsJ

Last Friday I was interviewed by Dr. Amy Vanderbilt @DrAmyVanderbilt from the Trend POV Show where we discussed the changing distribution in the music industry and what it means for businesses everywhere.  Here you go:

http://www.trendpov.com//sites/all/modules/swftools/shared/flash_media_player/player-viral.swf

Check out lots of great interviews on trends in business at Trend POV.

My friend George Howard recently wrote a great article for Berklee’s Music Business Journal.  In it he explains how music marketers can connect more closely with the fans that matter as they try and propel their band forward.  Here is an excerpt from the article and solid advice for any marketeer.  The complete text can be found here.

The Life Cycle Curve

In order to find your audience you must consider several details. The first is to accept the fact that you cannot market to the majority; you can’t afford it, and even if you could you would fail because of issues related to frequency of contact with these gatekeepers (i.e. radio/press).

Take the Mavens and Early Adopters and focus on these two groups. The Mavens, a term popularized by Malcolm Gladwell in his book The Tipping Point, applies to people who actively and aggressively seek out new things. They are the ones who are not only the most connected to the information channels, but are also most predisposed to discover new things, and new channels as well.

These mavens have a personality type that generates deep satisfaction from not only the seeking out and discovery of new material, but also the sharing of this material. The first class of people with whom they will share are so-called Early Adopters.

These Early Adopters are one standard deviation closer to the majority than the Mavens, and thus there are more of them. However, while they will adopt new things more quickly, they are not typically at ground zero of discovery. If the mavens are the bloggers, the Early Adopters are the readers of these blogs, and — to a degree — the re-bloggers. Again, these Early Adopters are a more populated class, and thus their influence is potentially greater than the Mavens.

There is crossover between the two groups. The area of focus is detailed below:

In every product category there are Mavens and Early Adopters. Whether you are dealing with music or any other product or service, you must find a way to bring your product to both groups.

Pyschographic Modeling

In an era of interconnectivity, demographics and geographics, while still important, are less important than the habits, trends, personality of a customer; i.e. their psychographic profile. Finding your audience requires you to understand profoundly the psychographic profile of your customers. What do they look like, where do they shop, what type of food do they like, etc.?

Determining these factors allows you to create a “model” customer. This is the person who, if you could get your music to her, would deeply embrace it. Also, given the fact that she is a Maven/Early Adopter, she will likely share what she has discovered with her network. Significantly, defining this Model Customer allows you to determine where this customer is likely to congregate, and thus where you must bring your music.

The Straddle: Offline and Online

We do not make profound connections with products, services or people online. Profound connections occur offline — in person. The genius of Facebook, and why it has eclipsed networks such as MySpace, is that it represents a Straddle of offline and online; we upload pictures and detailed stories of our offline activity so that our friends and family can be aware of these offline experiences. In this manner, you must understand that technology is simply an accelerator of your offline activity. By locating the Mavens/Early Adopters within your psychographic landscape, and taking your music to them — in person — you greatly increase the odds of these people developing an emotional attachment to your work.

Architecture of Participation

One of our most primal urges is to share information; this is why babies make the massive cognitive leap to learn language skills. Your job, once the initial offline experience has been established, is to create an architecture of participation; a method for frictionless sharing of information so that those Mavens/Early Adopters who have discovered you offline can begin to share their discovery with their network (i.e. online).

This requires a series of steps related to value exchange. Your first task is to establish four things:

1. Your own site
2. A Facebook Fan Page
3. A Twitter Account
4. An email newsletter

Your Site

On your site you must present a value proposition that begins with exchanging some type of content for an email address. Email is your currency; the more of it you have, the more likely you will be to convert what is essentially a non-scarce resource (i.e. your music) into something of tangible value. Do not be fooled into thinking you can get away using a third-party site as “your” site. While, undeniably, service providers such as Reverb Nation and Bandcamp provide value, you do not own these sites, and fundamentally your participation does more to increase the value of these sites than increase your own value. This is not to say you cannot extract value from these third-party sites; however, this requires using them like Facebook, Twitter, and others, to drive potential customers to your own proprietary site.

Facebook

Your FB fan page, similarly, must also represent a value proposition. The value here relates to engagement. FB allows for easy engagement via its makeup. Consider contests, polls, short videos, or other ploys that will keep your fans not only engaged with you on FB, but will encourage them to direct those in their network to your FB fan page. Of course, you must use FB to direct customers to the value proposition that exists only on your site: a content-for-email exchange, and other site-specific offerings (chats with the artist, etc.).

Twitter

Twitter should be used to establish your voice and to direct people to your site. The establishment of the voice comes as much from your affiliations — who you link to, who you follow — as it does from your actual tweets. As above, use it to engage and to direct traffic to your site. Employ time-sensitive offers and offers only available to those who follow you on Twitter. The goal is to inter-connect these tools, and to leverage them to enhance the offline experience. In all mediums you must encourage and facilitate sharing. Your site must have a FB “Like” button and a share on Twitter so that whenever you post content, your constituents can share with their network.

Email Newsletters

The single best tool for conversion of fan to customer is email. While email is an increasingly ineffective tool for communication it still yields a higher return with respect to sales than any other tool.

Therefore it is imperative that you use your email newsletter wisely.

1. They must be short; highlight one and only one action. The total length should be less than 500 words.
2. They should be frequent; once a week on a regularly-scheduled basis.
3. They should have a call to action; tell the recipient what you want them to do: come to the site to get something, come to a show, etc.
4. They should be forwardable; ask your recipients to forward the email to someone they think will enjoy it.
5. They should have sharing functions embedded; allow people to Tweet, add to a FB status.
6. Make it easy for people to unsubscribe.

Don’t worry about overwhelming people with email blasts. If people are unsubscribing, they’re likely non-value adding “fans” any way. Instead, focus on presenting real, timely, share-able value to your current fans so that they have a tool to help you gain new ones.

Converting your Audience to Customers

It is an immutable law of business and nature that somewhere close to 80% of your activity (engagement, profit, etc.) will come from 20% of your constituents. This is referred to as the Pareto Principle or the 80/20 rule. This means that if you have 10,000 people on your email list something close to 2,000 of them will generate 80% of your total sales. The other 8,000 will be largely non-value adding.

The problem of course is that you won’t know which of the 10,000 are the true fans. Thus, you must continuously work to increase your overall amount of constituents. Rather than having 2,000 of 10,000 contributing, strive to have 20,000 of 100,000.  In order to sift through the layers of participation to find the most valuable customers, you must create a filter. Think in terms of a funnel. At the widest point of the funnel is the easiest level of engagement: a free song for an email address.

Summary: The Value of Psychographics

The key is to determine what you deeply care about; what your purpose is, what your values are. From there you can begin — via a psychographic analysis — to find fans that share these same values. At that point, your goal is to bring your music to them, and create the architecture for more participation. Straddle between an offline and an online engagement strategy, but use both.

Once you’ve aggregated these Mavens and Early adopters, you must begin converting them into both customers and evangelists. This is done by honoring the 80/20 rule and working to extract maximum value out of your loyal 20%. Always work to increase the overall pool of your fans.

By George Howard

George Howard was President of Rykodisc, is an original founder of Tunecore and  Assistant Professor and Executive in Residence in the College of Business Administration at Loyola University.

Patronage of the arts is a time honored practice that is still alive and well in the music business.  Many examples of fan financing from Ellis Paul, to Jill Sobule and many others have been reported and detailed recently in this blog and others.  Now a group of musicians from California have put together a very interesting program to raise money for commissioning projects that I hope catches on.  We need more thinking like this in the music industry today.  Effective and creative methods of connecting music fans to artists, writers, composers and producers will help propel the next generation of music making.

Symphony of a Million

“Symphony of a Million” is a 6-month campaign, a commissioning project that brings together composers, performers, and the general public.

The goal is to sell 1 million notes. Purchased notes will be used in not just one single million note work, but rather many new works. Composers will work with performers and compose pieces of varying lengths. The first work to be written will be a 1000 note work for solo marimba composed by Music Academy Online founder, Dave Schwartz, and written for percussionist Nobue Matsuoka. The second work will be a 4000 note composition for saxophone and harp and it will be composed by Anthony Lanman who will be working with saxophonist Dr. Noah Getz and harpist Jacqueline Pollauf who perform together as the duo Pictures on Silence.

* Buy a note for $1

* Each note becomes part of a piece of music composed by award winning composers. Throughout the process we will be commissioning composers to write new works of varying lengths using the notes that you purchase.

* A special “Symphony of a Million” concert, sponsored by Music Academy Online and featuring world-class ensembles, will premier all of the works created using the notes you buy. The concert will be held May 18, 2011, the 100th anniversary of the death of Gustav Mahler, the man who composed the “Symphony of a Thousand.”

* Buy as many notes as you wish. Dedicate the notes to someone special. Help to shape entire sections of new music with the notes you select! Your name (and theirs) will forever be part of the final scores.

* Encourage your friends and family to buy notes.

Find out more here.

Here’s an email from Trent Reznor of Nine Inch Nails to his fans. Here is a band that is inventing their own future and building their fan base directly. Take note, this is how it is done… Awesome. (Thanks to Mike King for this one).

Subject: Nine Inch Nails survey

Message from Trent:

Hello everyone. I’d like to thank everyone for a very successful year so far in the world of Nine Inch Nails. I’m enjoying my couple of weeks off between legs of our Lights In The Sky tour and got to thinking… “wouldn’t it be fun to send out a survey to everyone that’s shown interest in NIN?” Well, that’s not exactly how it went, but regardless – here it is. As we’ve moved from the familiar world of record labels and BS into the unknown world of doing everything yourself, we’ve realized it would benefit us and our ability to interact with you if we knew more about what you want, what you like, what you look like naked, etc. I know it’s a pain in the ass but we’d truly appreciate it if you’d take a minute and help us out. As an incentive, everyone who completes the survey will be able to download a video of live performance from this most recent tour (and I know what’s going through your little minds right now: “I’ll just grab this off a torrent site and not have to fill out the survey!!!” and guess what? You will be able to do just that and BEAT THE SYSTEM!!!! NIN=pwn3d!!!) BUT What if we were to select some of those that DO complete the survey and provide them with something really cool? I’m not saying we’ll ever get around to it, but if we did maybe something like signed stuff, flying someone to a show somewhere in the world, a magic amulet that makes you invisible, a date with Jeordie White (condoms supplied of course), you know – something cool. See, you’d miss that opportunity AND be a cheater. Do the right thing – help us out. You’ll feel better.

Thank you and I’ve had too much caffeine this morning, Trent

You wanna take the survey? Click here
.