Basic Marketing Principles For Artists - Part 2: Increasing the Frequency of Purchases

The first piece in this series focused on increasing the amount of fans and how this is a necessary step towards success. Part 2 of the basic three principles is increasing the frequency of purchases.

The cornerstone of this is simple: You can not only sell music.
In order to get the frequency of purchases up you must provide something that actually gets your fans to buy more frequently.

If you are only selling one album or one set of MP3s, it’s pretty near impossible to get this step accomplished because your core fans will only have one thing to buy (therefore making frequency non-existent).

Billboard recently reported that over 2,500 record stores have closed in the US since 2005. This points out to one very clear conclusion: People are buying fewer CDs (of course we already knew this) but think about it –

Are you only selling music?

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Basic Marketing Principles For Artists - Part 1: Increase Your Fanbase

As many of you know my company Cyber PR specializes in Internet Marketing, Social Media and PR. I am an avid Internet Marketing student and I gather the nuggets I learn from my studies of musicians.

I recently spent two intense days in Los Angeles, where I attended an Internet marketing retreat led by my mentor, Ali Brown. I belong to her mastermind group and participate in her yearlong program.

It was a whirlwind, and the core principles I learned were both basic and critically important.

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The New Music Gatekeepers: Fans & Workload

It’s the most common frustration I hear uttered by independent artists and promoters: The workload.

How can I find the time to do all this social networking and guerrilla marketing stuff?

I’ve got so much on my plate already, how am I supposed to add even more to my overflowing to-do list?

I hear you. I know. And ISN’T IT WONDERFUL?

Huh? What in Jehovah’s name is so wonderful about being overburdened by all that needs to be done to succeed with music?

I have a good answer. Let me explain …

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Fan-Funding & Donation Sites: 9 Ways to Raise Money for Your Next Music Project

Are you ready to record a new album, produce a video, or take on an ambitious new music project? But you don’t have the cash on hand to make it happen now?

Do what a growing number of smart artists have done in recent years: ask your fans to contribute!

The band Marillion reportedly raised $725,000 by pre-selling its Anoraknophobia double-CD album before it was ever recorded. Jill Sobule raised more than $80,000 from about 500 fans to record her California Years album, due out in 2009.

But even lesser known artists have had success with this fan-funded business model. Take a look at what these indie acts have done to involve their fans in music fundraising:

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Music Niches: Narrow Your Net to Get More Fans

I’ve said it before, and I’ll say it again. You can actually build a bigger fan base by appealing to fewer people. When you play it safe and try to be all things to all people … you end up being nothing to no one.

But if you specialize in a musical category that fills a need, you can stand out and create stronger bonds with fans.

Here’s one example …

SoundSleeping.com exists for one purpose only: It promotes and sells sounds for sleep and relaxation. According to the web site:

“The music and sounds on our MP3s have been carefully selected and mixed to produce beautifully calming soundscapes. There are no melodies to grow tired of, no changing styles, beats or rhythms — just consistently soothing sounds of nature with tranquil, slowly changing harmonies.”

On the site you can listen to a wide variety of samples and purchase MP3 downloads. Very cool concept.

The only problem with this site is it isn’t branded very well. It’s not clear who created it or who put together the music. Lesson: It’s a lot easier for fans to connect with a person than a “category of music.” Beyond that, it’s a very focused concept that definitely fills a need.

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From Exposure to Conversion "How to Create a Real Fan" - Part 2

Thanks for the comments I received on the Fan Funnel model we employ at ReverbNation.  I’m still looking for more feedback, so please speak up if you have any.

Now, to continue the train of thought begun in the first post…

The Fan Funnel, in any incarnation, is incomplete.  It is a ‘stock’ measurement in that it tells you how many fans you have in each section of the funnel at any given time.  But it fails to measure some important things like the trajectory the Artist has (rate at which fans are entering the Funnel or moving down the funnel), and how deeply engaged those fans are with the content, to name a few.  As a result of this deficiency, we developed a proprietary metric for every Artist that uses ReverbNation called a Band Equity(TM) Score.  Artists use this in conjunction with the Fan Funnel.

Band Equity(TM) takes into account four factors that add up to the current value of the Artists’ portfolio of fan relationships (normalized as a ‘score’), as well as the trajectory of that value:

(1)  Breadth
How many people does your content touch, overall?  How many listen or even view it in a given time period?  Having your content on many web pages, touching many people is a great way to understand the total conversion ‘potential’, and might be summed up as ‘awareness’.  All else equal, an Artist whose content touches more people has a higher potential  for converting fans and developing relationships than an Artist whose content touches fewer.

(2) Influence
How frequently do those people seek out a second instance of the content (like play a second song or video or view the blog after they play a song)?  What is the ‘open rate’ on your emails to fans (what is the probability they will actually open and read it instead of just deleting it when it comes in)?  How long do they play a song or video before they turn it off and do something else?  All else equal, an Artist that garners more engagement per interaction has stronger and deeper relationships with their fans.

(3) Recency
When was the last time you engaged your fans?  All else equal, an Artist that had their fans engaged yesterday has more Band Equity(TM) than an Artist that last engaged them six months ago.  Recency causes your Band Equity (TM) to deteriorate over time if the # of fan interactions and level of engagement drop off.   Think of this as the main ‘trajectory’ element.

(4) Access
Of your total ‘FANS’ and ‘LISTENERS’, how many of them can you contact without the assistance of a social network?  If the only way you have to communicate with your ‘FANS’ is via a MySpace Bulletin, then you do not have the Band Equity(TM) that another Artist, all things equal, has if they can send a custom email or other custom message promoting their show or new release (full disclosure:  ReverbNation provides a free email service for Artists, Labels, Managers, and Venues).  This element cannot be underestimated by Artists.  Social networks are a great place to RENT fan relationships, but the most savvy and successful Artists find ways to OWN their fan relationships, so they can access them when they want, and how they need.

From these four elements we construct a Band Equity(TM) Score for each Artist (and we also build our Charts from those scores, because we believe that it measures the right things).  It is updated once per day.  The goal is to raise their awareness of these important factors in their success, and to give them visibility into which promotional/marketing efforts deliver the desired result - stronger, deeper, and more fan relationships.

 
Let’s face it, record labels, talent buyers, gig promoters, and brands (people who pay the Artist) do not believe in MySpace friend counts anymore.  The numbers can be easily spoofed and a few bad apples have spoiled it for everyone else.  Artists, likewise, should not measure themselves by a metric like this alone, as the correlation between MySpace friend totals and commercial success is dubious, at best.  That is not to say that establishing friend relationships at MySpace is not a valuable endeavor (it can definitely add to awareness, and MySpace is probably still the best place to go to harvest fan relationships).  But, as a single metric for understanding the ‘financial potential’ of your band (notice I did not say the ‘artistic value’), it falls short.  We provide tools for the Artists to actually incorporate the activity happening at MySpace, Facebook,  blogs, homepages, etc, into the Band Equity (TM) Score, so they can have a global view of their success.  Its a big music world out there on the web, and Artists need a way to consolidate and understand how those fan relationships are changing across the board.



 

From Exposure to Conversion - 'How to Create a Real Fan' - Part One

Steve Lawson recently posted an entry on understanding and measuring the path that fans take from simply listening to a song, all the way to ‘conversion’ into a fan.
 
That got me thinking about the Fan Funnel metaphor we use at ReverbNation.  I am looking for feedback from Music Think Tank readers on the steps below and the process we use to enable artists to essentially operate a “Fan Funnel”.  Our goal is to provide a framework for understanding the process, and to provide tools for the Artists to experiment with marketing and promotion efforts so they can see what ‘works’ for them.  Here is a crash course in what the FAN FUNNEL  is:

 
Step 1 - Exposure
People must be exposed to the content.  Once exposed, there is some probability that they will either move down the funnel, or pass the exposure along to friends who may move down the funnel. People who check out the content are called ‘LISTENERS’.  Certainly the quality of the content matters here.  Good songs and good videos will have a higher probability of moving folks down the funnel, but for ALL artists, increasing the number of exposures will have a positive impact on their raw conversion numbers.  As a result, we began to provide tools for increasing exposure for the artist (widgets that make it easy to post the music and let fans spread it, street team functions so that the Artist can encourage existing loyal fans to spread it for them, applications for social networks, etc).
 
Step 2 - Starting A Relationship With The Fan
Once a person is exposed to the content, it is imperative that the Artist offer up some way for them to identify themselves to the Artist as a ‘FAN’ of the music.  This could be going straight to a ‘conversion’ by letting them join the street team or providing them with a purchase option, but most often it simply manifests with a person joining the mailing list or just identifying themselves as a ‘FAN’ of the Artist.  We ensure that potential ‘FANS’ can do this with every exposure tool we offer.  Its critical that Artists OWN this ‘FAN’ relationship for themselves, and not RENT them from the various social networks on which the relationship was created – more on the importance of this later.
 
Step 3 - Converting FANS Into STREET TEAMERS
Once you OWN the relationship with the ‘FAN’, you have a ‘pipeline’ of folks that you can talk to, on your own terms, and in any way you wish.  This is critical to success by our observations, as this allows the Artist the most flexibility in the messaging they convey to their ‘FANS’.  The next logical step, beyond asking them to buy a product (ticket, song, t-shirt), is to ask them if they want to exchange loyalty or behavior for something of value to them (something you can give away that actually deepens the relationship with them, like a backstage pass).  This is the act of building a ‘STREET TEAM’.  Artists that have ‘STREET TEAMS’, all else equal, find much more success than those that do not.  In addition, these Artists have the ability to execute marketing and promotional programs for less money than those that do not possess a ‘STREET TEAM’, as they work for non-monetary items like being put on a guest list, etc.
 
Step 4 - Getting Fans To Promote You
Now that you have some ‘STREET TEAMERS’, the next step is to give them tasks to do that promote your music or add more ‘FANS’.  This can take many forms, but usually involves prompting them with the right tools and clear instructions on where to post your content on the web in order to help you (something you need to OWN the relationships to do properly).  Many Artists have an untapped base of extremely loyal fans who have never been engaged to actively help them grow their popularity.  This is a wasted marketing asset.  The most successful Artists that we have observed tap into their fans at least once per month to help them spread content, recruit new fans, or promote a specific product (we provide tools to help them do this).  You are probably thinking that this can only help established Artists, but we have seen the power of this tool for even the newest Artists, and it is POWERFUL.  Remember, Artists with smaller followings often have a familiar relationship with their fans (read: friends and family) where established Artists only have an affinity relationship.  It is often the case that these close relationships can be the seed crystal that these Artists need to grow from obscurity to local recognition in their area.
 
That is the ‘FAN FUNNEL’ in a nutshell, and it is the framework with which we encourage Artists to view their business.  We provide ‘FAN FUNNEL’ stats directly to every Artist that uses our site in hopes that they will use it as the framework for understanding how to approach the challenges they face at growing their popularity.  It is based on the empirical evidence we have around the things that make a ‘successful’ Artist.  Soon we will be able to incorporate the actual sales data that come back from digital retailers like iTunes, closing the loop on how the activities of the ‘FAN FUNNEL’ impact real business objectives like selling music.
 
But the ‘FAN FUNNEL’, even as it grows in scope, is deficient in some respects.  It does not take into account the relative value of your content above other Artists (comparing you to standards in your genre), nor does it factor in a few other things of critical importance to understanding how you are doing, overall, at growing your fan base in both breadth and depth (especially depth).  For this, we developed an overall metric of the Artists’ ability to develop and nurture fan relationships called ‘BAND EQUITY’.  I will post a follow-up entry on how we look at this concept, but I’d love your feedback on the FAN FUNNEL in the meantime.

1,000 True Fans - Another Perspective

If you have not read Kevin Kelly’s Technium today - artist Robert Rich has a very interesting perspective on 1,000 True Fans.  Here’s a quote:

I don’t want to be a tadpole in a shrinking puddle. When the audience is so small, one consequence of specialization is extinction. I’ll try to explain.

Evolutionary biology shows us one metaphor for this trap of stylistic boundaries, in terms of species diversity and inbreeding (ref. E.O. Wilson). When a species sub-population becomes isolated, its traits start to diverge from the larger group to eventually form a new species. Yet under these conditions of isolation, genetic diversity can decrease and the new environmentally specialized species becomes more easily threatened by environmental changes. The larger the population, the less risk it faces of inbreeding. If that population stays connected to the main group of its species, it has the least chance of over-specialization and the most chance for survival in multiple environments.

This metaphor becomes relevant to Artists and True Fans because our culture can get obsessed with ideas of style and demographic. When an artist relies on such intense personal commitment from such a small population, it’s like an animal that relies solely upon the fruit of one tree to survive. This is a recipe for extinction. Distinctions between demographics resemble mountain ranges set up to divide one population from another. I prefer a world where no barriers exist between audiences as they define themselves and the art they love. I want a world of mutts and cross-polinators.  I would feel more comfortable if I thought I had a broader base of people interested in my work, not just preaching to the choir. 

Ask the readers: What's important?

One of my main ideas behind setting up Music Think Tank - apart from simply to provide a community blog for some of my favourite writers and thinkers in the area of online music business - was to create a space where these people could come together and discuss - perhaps even attempt to solve - some of the biggest issues in digital and online music composition, production, promotion, distribution and consumption.

We’d like to have a go at some of the little ones along the way too. 

In order for us to do that, we need to know what the burning questions are in your mind. We’re building something in the back laboratory right now that will allow you to post your specific questions, so that we can put our minds to work and see if we can generate solutions that you can take and apply to your individual, specific circumstances.

But for now, we’re interested in hearing what your biggest concerns are. This is the big picture stuff. Is it copyright? Is it audio fidelity? Is it information overload? Getting a break?

Hit the comments, and let us know: what are The Issues That Matter?

Give us the things to think about, and we in the Think Tank will put our Thinking Caps on.