I know, I know – I have got a lot of nerve suggesting that you behave like the infamous retail store, which has contributed to the decline of the addled music industry. Hear me out though.
Walmart is known as the loss leader king. Basically they sell certain items at or below cost, so that they can drive traffic to their stores. They take a loss from selling those products, but know that people will usually buy other things in the store that are priced for profit. Regardless of how you feel about the Walmart brand, this idea is pretty clever. Many retail shops have adopted this practice and most of us are none the wiser. That is why I make the suggestion to you, Mr. or Miss Music Act X.
One of the biggest problems many artists have is understanding the nature of the product life cycle. If it were understood more, there would be more time put into the marketing of independent music projects before they get released. You know what I mean. Take a look at the image to the right. Us fancy marketing people know that your musical products are going to hit a maturity point and then decline. You should be just as mindful. Your product will hit a peak and take a dive. That can be 50 CDs sold at one show or it can be 200 downloads on your website. Eventually, everyone that really wants your product will have it and then you will be left to work on getting repeat business (ie, more music).
Now what does this have to do with Walmart?
Well, if you are a new music act, I want to suggest that you use your music initially as a loss leader to set yourself up for a much more valuable transaction – newly-formed relationships. Use your music to make connections with new customers. If you are not collecting contact information in exchange for your music, then you are getting very little out of the deal. The greatest asset an artist can have today is a solid set of connections that they can leverage monetarily.
In order to be highly successful at generating new contacts, be sure to give yourself time to promote your music in advance of release. There is far too much in the way of piracy and just general apathy from folks for you to risk your options on a small(er) set of folks. Some will download your music just to repost on their blog to build site traffic. They may have no real interest in your music. I know, heartless, right? That is why if you are out there giving your music away for free, at least set yourself up to get contact information. People are going to opt-out, so take the time to build buzz first to shoot for volume to counteract the slick.
Now if you really want to be like Walmart, you can sell your music for cheap or even free and offer the opportunity to purchase premium merchandise. Again, the only way this will work is if you take the time to build interest in the loss leader first. You want a lot of people coming through your doors, because even Walmart knows that there are smart people out there. Many of us love free and cheap. We will take your deal and leave. If you do not take advantage of us being in your presence, then that is a real loss to you.
Keep all this in mind when you are preparing to release your next project. Look for something to be a loss leader, if you do not have a healthy contact list. Then push the product as hard as you can because it will taper off and then it should be on to the next one! Also do not be afraid that people will take your music and run. Focus on those that really want to connect with you. You will get better at knowing how to identify those people, if you stick to learning at places like this. 😉
Questions? What do you think of this advice? What resources do you plan to use to set up your future loss leader system?