Just a little catch up first for anyone who is new here and still unclear about what makes the marketing strategy we focus on at MMM a bit different from what musicians typically do?
Music Marketing Manifesto is based on a strategy that is known in marketing circles as ?direct response marketing?. Instead of simply setting up a Reverb Nation page and an itunes account and waiting for hordes of fans to start magically pouring in and buying our albums (which doesn?t happen by the way), we go out and use proven selling strategies to drive traffic, capture leads, build an authentic relationship with our subscribers and then occasionally use ?sales triggers? to motivate our subscribers to get off the fence and become BUYERS. Once they have bought our music it becomes our goal (at least from a marketing perspective) to increase our customer value by selling additional items to our fans.
This is commonly referred to as an ?upsell? and it can take place in the form of..
1. An ?order option? that a customer sees before checking out.
2. An after purchase ?one time offer?.
3. An offer that a customer would be exposed to a little down the line in the form of a real time promotion or a ?limited time offer?.
Now just to address what is sure to be a common question? This is easy to set up if you are taking orders on your own site. You simply redirect customers to an offer page after they complete their purchase. You can do this with Paypal or just about any other shopping cart solution.
It?s trickier to do with sites like CD Baby and BandCamp but not at all impossible. To do this with third party sites like those, you simply need to remind people to pass on their email address during the order (the process is a tad different with each platform) and then you can manually import that person into your customer list where you could then send them the upsell offer, whenever appropriate.
For sites like Amazon and itunes you would need to offer a free bonus incentive to anyone who emails in their receipt or order ID.
Typically (but not necessarily), the idea behind the upsell is to offer your paying customers a deal that is better than what the general public can get and to do so while their wallets are out and they are in a ?buying mood?.
There is a psychological process at play here?
A person goes through a natural process of resistance before making a purchase. The sheer fact that they have ordered says that they have had had the internal debate as to whether or not your product was worth the money, and they have decided that it was.
So for example, lets say that you have just convinced a customer that your 10-song album was worth $10. Then, just after completing the process you offer them a box set of 50 songs for a mere $20 more. In order for that customer to reject the offer (assuming they can physically afford it), they need to make an internal argument that works against the logic that they just applied to the initial purchase.
Saying no to the upsell is like admitting to one?s self that the initial purchase was a bad idea to begin with. It?s hard for a person to come to such a conclusion. For good reason. The reality is that a properly structured upsell usually IS a great value for the consumer.
And that?s the idea. It?s a win for your fans, and a win for you. They get a bargain that is not available to the general public and you increase your bottom line by making a sale that you would have not likely made otherwise.
Now? Why is this so important?
Incorporating an upsell into your sales funnel is important simply because you can increase your customer value dramatically. In other words, you get more money for the same amount of work. Maximizing customer value is a major focus in most industries and it needs to be for independent musicians as well.
Why? Because music has a notoriously LOW price point. With only $10 or less in profit on each album sold it becomes very difficult to see a positive ROI from advertising. Just about every successful business in the world is based on advertising. Without it, we do not have the ability to expand.
Without advertising an independent artist is forced to either tour for the rest of their lives or to work each and every day at driving traffic manually (which gets old fast).
Because whether you want to realize it or not, the name of the game is TRAFFIC. Simply setting up an itunes account and spamming everyone on Twitter who has mentioned a band you sound like in one of their tweets, is not going to get you where you want to be.
And while paid advertising is not the first place I?d start (manually driving traffic online is), it is absolutely part of the end game for any independent artist who is hoping they can avoid touring for the next 30 years in order to make even a so-so living.
Here Are A Few Numbers To Consider?
Typically a subscriber can cost anywhere from .50 cents ? $2 to acquire. Sometimes more, sometimes less.
If you have a well-oiled autoresponder series in place (pre-written email campaign), you should be able to convert subscribers into customers between 1 ? 10% of the time. 4 ? 5% being around average.
If you spend $1 to acquire a subscriber, and you convert subscribers into customers at 5%? That means that you will spend $200 to generate 200 subscribers which will convert into $100 in revenue (assuming you profit $10 on each album).
Here?s a breakdown of that math:
$1 X 200 = 200 subscribers.
200 subs / 5% = 10 sales
10 sales X $10 = $100
Money spent: $200
Revenue: $100
Income: Negative $100.
Yikes! That?s not gonna work.
HOWEVER, if you offer a $40 upsell and 30% of your customers take you up on that (30% is often sited as an industry average), you will then see $220 for your $200
Here?s the new math:
$1 X 200 = 200 subscribers.
200 subs / 5% = 10 sales
10 sales X $10 = $100
30% Upsell rate = 3 sales for $120
Money spent: $200
Revenue: $220
Income: $20
Now we?re getting somewhere.
And the profit potential doesn?t stop there. When your focus is on generating, communicating with, and selling to, your list, then you have the ability to profit over and over again. You will be consistently upping your customer value and increasing your ability to afford new advertising channels.
Add live shows, or better yet, house concerts to the mix and you?ll see a serious spike in customer value as you bring in those big ticket conversions.
This is when the infamous ?1000 true fans? model actually works.
Just to address the inevitable?
At Music Marketing Manifesto we discuss music marketing strategy. And we make no apologies for doing it, nor do we couch it with a bunch of feel good crap that doesn?t serve anyone.
But in doing so it sometimes depersonalizes a process that is ultimately about passion, heart, and soul. We did not learn to play our instruments and spend years dedicated to the craft of music so that we could one day have a strong ?conversion rate?. We play music to touch the hearts and minds of our fans and even grow and heal as individuals.
We are NOT trying to manipulate people against their will. Rather, our goal is to understand how consumers think and present ourselves in a way that is conducive to getting the response we want.
I hope it goes without saying that if you are benefiting more than your fans are from the transaction, then something is off and you need to make a few changes to your business model.
And now with the touchy feely stuff out of the way?
So what if I don?t have anything else to sell?
One of the most common reactions I get to the ?upsell? concept is that often musicians feel that they don?t have anything more to offer their fans, aside from some way-to-expensive t-shirt that, let?s face it, no one really wants anyway unless they are a die-hard fan. And most customers, especially the new ones, are not die-hards.
Not to fear, there are a ton of ways you can monetize your list that take very little effort and/or money to create.
In a few days, I will follow up with part two in this series and offer a number of different ways that you can make infinitely MORE MONEY for each album sold.
Stay tuned for part two?
And while you guys wait, I?d love to hear your experience. I know many of you at least offer product options and upgrades. What percentages of your customers order more than just the album?
Have any creative upsell ideas that you guys would like to share?
Leave a comment below and let me know. I?d love to hear your thoughts on this.
Source: http://www.musicmarketingmanifesto.com/how-to-make-more-money-for-each-album-sold/
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