Direct Response = The Future Of The Music Business

Greg teaching the New Music Economy Class

Topspin just released some killer data and slide decks from Shamal’s presentation at MIDEM. The decks are really impressive in that they give the numbers behind the theory that “direct response marketing” works in the music business.

I’ve talked about the relationship between Internet Marketing and the Music Business before and these slides further get into how this works in the industry. From a top level standpoint, here is TopSpin’s artist plan:

1. State your hypotheses or goals
2. Craft your offers to meet those goals
3. Collect data
4. Measure your performance
5. Optimize your campaign
6. Repeat successes, iterate improvements, and constantly experiment

With every artist we work with, inside of Label 2.0 and our new project (The New Music Economy – coming next Monday!) we take a similar path to what these kids at TopSpin have been working on. Here is the gist of our marketing plans for indie artists:

• What do you want to accomplish, what are your goals?
• Create products that can help you meet these goals (if you want to make 6 figures and you only have a free EP, we need to work on products first)
• Build out websites, content, landing pages, etc
• Create content with the sole purpose of getting fans to signup to your squeeze page, give them music and get them into your sales cycle
• Do it again, and again
• Review analytics and see where your conversions are coming from, which products sell higher and where you are winning over the most fans.
• Apply 80/20 principle and look for more outlets

Honestly its a pretty simple concept. In the New Music Economy (sales hype – coming next week!) we unveil the 3 step marketing plan that any musician, any business or any brand can use to dramatically increase their customer count, fans or clients (HINT – it involves proactively acquiring new fans).

Some of the things that will hopefully resonate from the TopSpin data is that you need to start building relationships with your fans and then offer them products that match their wants and play off their emotions. When that happens, this happens (from TopSpin data)

• 50% of transactions are less than $10, yet account for only 18% of revenue
• 57% of revenue comes from items that are $25+

In the New Music Economy we share ways to find these fans and increase your transaction size. Imagine taking in a fan at the free level, getting their email address in exchange for some free songs or a mixtape or something. The next day you follow up with an email asking them about the songs and asking them to engage with them on Twitter, Facebook or their blog. From there you can further engage, and start sending in offers. If you segment your fans correctly you can send specific offers just to high paying fans and separate offers to free or low paying fans.

Why I Keep Yelling At Musicians To Get Their Email Lists In Check!

30%!

30 friggin percent of revenues from TopSpin artists comes from an email. That stat drives me nuts and makes me really happy when I see bands utilizing email as the most important channel between the artist and the fan.

Look at Myspace, Twitter and Facebook. They have a combined 8%! And how much time do you spend there?

What email allows you to do is directly market to fans that have asked you to send them stuff about your band. This includes

• offers
• new music
• cool blog posts
• affiliate products
• unreleased products
• discounted or discontinued products
• or whatever else you can whip up into Aweber and click send

This is the power of Direct Response. The New Music Economy teaches you all of this and how to put it together. The artists that are using it are killing it, getting 25-50 emails a day on their list.

SEO

Shamal also went into SEO stating that it’s the nubmer 2-3 driver of traffic to an artist’s site. Is your web presence optimized? This means when someone Google’s your artist name, what does Google show?

• Is there outdated info?
• Sites that you no longer use?
• Are the videos that pull up not the most recent?
• Is Google showing tracks from your band due to their new deals with iLike and Lala?
• Does your actual wibesite rank higher or lower than your Myspace, Twitter, Facebook, etc?
• Are there more than one band / artists competing for the same name or similar name?
• Is there a brand or product competing with you?

To learn more about SEO, check out our free guide on SEO for musicians.

There is a ton of data in this deck and you need to look at it now. If the concepts interest you, we have something coming for that on Monday. I think you are going to like it. I don’t want to beat you in the head with that so I’ll just embed the TopSpin slides below.

What do you think about this data? What do you think about direct response marketing in the music industry? How can you do this for your band / music? Let’s talk in the comments below.

-Greg Rollett