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Sales is a numbers game. Make the numbers large enough and you can reliably start to predict your sales. Once you move away from dealing with individuals, in terms of mass communication, and make the numbers large enough to be statistically significant – the actual number will depend on what it is you are selling and is not exact, but lets say for the music business where you are selling CDs, downloads and merchandise upwards of a few hundred, and a 1,000 is very respectable.

So let’s say you have a mail list of 1,000. In the sales world, a funnel is a classic prediction methodology. Say you have a sales letter that generates a 10% response, so sending out a 1000 will generate 100 responses; calling those 100 respondents generates a 50% sales meeting success; sales meetings generate a 30% conversion. So, 1000 letters has resulted in 15 sales stepped through several known control points. Voila, you have a funnel.

Now, the business must do the sums. First of all is the cost of sending out 1000 letters plus making a 100 phone calls plus attending 50 sales meetings a viable financial proposition? If it covers all the costs and provides a profit then you have a business. You just keep cranking the handle and out pop sales. In theory yes, in practice no because no matter how reliably predictable your model the number of targets is limited.

So, when you exhaust the targets you start with a new product or maybe a service that augments the product you are selling. e.g. a repair service. This is good because you have customers who have bought your product before and they like it. Get it right and it gets even better as the previous response numbers are likely to be much better with a satisfied customer. Package it correctly and you have built a brand. That’s all very simplistic as there are lots of other factors to think about, but in principle that is how it works.

Now, that is classic sales, however, a fan who has signed up for your email list is not quite the same kettle of fish because they are buying into YOU. As an avid Steely Dan fan, I have a copy of “You’ve Gotta Talk It Like You Walk It (Or You’ll Lose Your Beat)”. It is rough and not Steely Dan-like at all. As a music lover I wouldn’t have bought it, but as a fan I had to have it to complete my collection.

By releasing new music regularly you have new products for fans to buy but it is a bit limited and one dimensional. However, this is where looking at classic sales models can still be very useful. Expanding the product line to meet their (not your) needs allows you to be creative. There is the standard ringtones, t-shirt/sweatshirt, you could offer to play a concert in their home for their family and friends.

So, the more you look at it, the more you realise that being in the music industry is no different to other businesses. There are standard techniques and methodologies that you can apply. Fan = customer, and the more you have, the smoother and more predictable your income stream becomes. And predictable revenue leads to a sustainable business.

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When I worked in IT Consultancy, networking played a big part in getting the business off the ground. I would look for events where I could meet with other business owners and pitch at them. I used to attend a lot of breakfast events, lunches and evening events. It was always hard work and I kissed a lot of frogs. And it didn’t end when you left the event, the moment I got back to the office I would write a brief email to each letting them know it was good to meet them. When you are selling a service, lead times can be long so it is a case of staying in touch until there is a need.

The nice thing about the music business is that networking doesn’t have to be at a dedicated event, and, in fact, when you start a conversation with the person sat next to you on the bus it is much more relaxed. It is a social conversation. IT is a need, music is a pleasure. You don’t have to sell, your passion will come through, and what will win them over is your personal connection. The tip I always gave to my salesman, for any and every meeting, was you have one mouth and two ears, use them in that proportion.

It may seem a slow way to build your email list but added to all your other activities such as social networking and gigs, it will soon build up. But you need a mind set where you work it all the time. Another approach is to get into other people’s email lists. Be careful here, you can’t just acquire other people’s lists and start emailing them as that is spamming. But maybe you can encourage other lists to promote you which is not spamming.

Why would somebody do that? Because they gain from it, too. One simple way is to identify a band whose music is similar to yours and suggest that they email their fans with your next gig and you will do the same for them. Alternatively you can think more laterally. For example, a lot of wedding parties want a band, so think about approaching some wedding planners.

If you decide to go down the route of getting others to sell your services, like a wedding planning service, make sure you make it as easy as possible for them. Look for ways that you can add value to their service. If you have a gig coming up, invite them along so they have first hand experience of your music. Offer them a slice of the action, say 10% of the fee for any bookings they get. But remember, it is not only the music they are interested in because if you let them down, they are letting down their customer. Make sure you are dressed presentably, offer references if possible, and find ways to show them you are reliable. And then be reliable so recommending you is a no brainer.

It has been a busy time. The rest of the industry may be winding down for the holiday break but with a new video to launch in January, there is a lot of thinking to be done to create a strategy to promote it. Announcing it to the email list seems the ideal way to launch it, I wish it was bigger.

Since starting to work with Aaron, we have been looking at ways of taking a disparate fan base spread over a number of different social/music networking sites and bringing them together in one place. It is more difficult than it looks, akin to herding cats. In the end we settled on measuring our success by numbers on the email list and fans on Facebook.

We took this two-pronged approach because it is easier to drive traffic from one social network site to another than straight to the email list. As the newsletter becomes a more regular feature, we will look to providing incentives for Facebook fans to move to the email list. A track give-away to join the email list seems a good way forward.

So, it’s official, size really does matter. Straight sales is a numbers game. The bigger the numbers, the more controlled the outcome. Let me elaborate: a known response rate of 30% to a particular communication means send it to 10,000 targets and approx 3,000 will respond, however, send it to a list of 100 and 30 may respond but it could be 0 or it could be all 100. It is not statistically significant.

While you may think that a fan email list is not the same as a sales email listing, it is as the numbers grow. Response is just a statistical function of the communication. Gosh, doesn’t that sound cold-hearted and business like. Don’t confuse business reality with emotional attachment to your fans. Being hard-nosed doesn’t mean that you don’t care about your fans.

We’ve been having an interesting discussion. Aaron has asked some simple, but very pertinent, questions about newsletters. While I have felt completely comfortable over the years with the idea and concept, his questions have made me think very hard about them in the context of the music industry.

In sales, when somebody engages with you as opposed to you trying to engage them, it means that they have a need. If you sell widgets, then it is quite easy to build a regular newsletter around your latest prices with a promotion. It is simple and basic but it meets the needs of the business and your customers.

This is wonderful. You have potential customers who sign up to your newsletter which is like them walking into your store. The danger with this scenario is that you are leading your potential customers to buy on price only, which means they will probably be signing up to all your competitors’ newsletters too.

Hmmm, this may be great for the buyer, but it can be the death knell for the business. So, the trick is to offer something your competitor doesn’t and differentiate yourself in the marketplace. Build in quality and good service and you will create a loyalty in your customers so price becomes less of an issue.

That’s all very good but how does that translate to the music industry. You’re not selling widgets, and better than that you have an exclusive product that only you can provide. However, in today’s internet world where most fans hook up via social networking and news is readily available without any commitment why would someone sign up to your newsletter?

I ask this question all the time and it seems to me that there is a motivation that is not obvious/understood fully and that always worries me. So, instead I focus on strategies to give the fan reasons to sign up to a newsletter and then look forward to receiving it. It seems to me the next best thing:

  • make it regular. Plan a schedule and keep to it. Once a month is a good balance. Don’t be tempted to hold up the newsletter for a new release that is in production, or a piece of news you are expecting.
  • give something that is unique to the newsletter and not found elsewhere. For example a chance to listen to an unreleased track, a new video or a personal photo of you climbing Mount Everest.
  • it is not just an opportunity to make demands on your fans. There is nothing wrong with a call to action – to vote for you in a music competition, nominate you, or take a look at your latest video and leave a comment. But one call to action per newsletter is where to draw the line balanced with 3-4 items where the flow is in the other direction.
  • as the list grows, run a survey to understand the demographics of your audience. It is important to know your audience when writing your newsletter because your content should resonate with the reader. For example, mentioning the latest computer game you have been playing to an audience of 35-55 year olds is going to miss the mark in general.The purpose is to remind folk who you are, that you are still making music and to let them know what is in the pipeline. Research shows that people will share an email with friends if they consider it interesting or amusing. Having your newsletter forwarded (referred) is a great way of growing your fan base.