It’s not just that they understand that smart marketing is about relationships more than quick one-time sales.
And it’s not just that they know it’s not just any relationship they want, but loyal, raving fans.
It’s that they know it’s about having a direct relationship with your fans.
Radiohead Blows Off Record Companies in Favor of Fans
So you’ve likely heard plenty about Radiohead’s decision to allow fans to download its new album for a donation the fan thinks is fair. And you’ve heard even more about Nine Inch Nails and Oasis planning to deal directly with fans as well, following the lead set by Prince long ago.
Some people want to believe this is about turning music free, but it’s not about free. It’s about smart business. It’s not about anti-marketing… it’s brilliant marketing.
The not-very-well-kept secret about the music business is that recording artists don’t make a lot of money selling music when labels are involved. The corporate accountants do a great job of ensuring that.
But that’s okay, since bands make money on the backend (as is so common is more business models than you might think). Concerts and merchandise make bands wealthy, and the music is actually an attraction strategy.
If the average donation for the new Radiohead album works out to more than 30% of a regular-priced CD attached to a label, the band likely makes more profit than they would have otherwise. The fact that Radiohead will allow a label to distribute a CD in 2008 doesn’t detract from the importance of this move, since the band took the low-hanging fruit known as die-hard Radiohead fans away from the intermediaries.
And this is not just about big artists. The undiscovered have to sell records out of the trunk or use the Internet to make people clap their hands and say yeah before a label will even notice. How long till they figure out the label is expendable?
The most important thing anyone can take away from the revolution in music distribution is summed up well by Trent Reznor in his announcement that Nine Inch Nails was free from the tyranny of the record contract.
It gives me great pleasure to be able to finally have a direct relationship with the audience as I see fit and appropriate.
Think about that the next time you find yourself writing for Google.
Tim Ferriss and Fan-Fueled Lifestyle Redesign
I recently had the pleasure of chatting with Tim Ferriss, New York Times Bestselling author of The 4-Hour Work Week and an all around fascinating guy. I shared some strategies for his blog, and he indulged me in some of his plans for the future.
While many feel the gist of Tim’s book is about outsourcing as much of your business and life as possible, I see it a bit differently. The book is about freedom, and the fact that money is not really what we want.
We want the benefits of money.
Tim teaches people that time is not money, it’s more important than money. And although he took the traditional publishing route, it’s clear from the book that Tim understood upfront the importance of having a direct relationship with his audience that had nothing to do with his publisher.
When I read Tim’s book, I saw several obvious opportunities for him to profit on the backend, thanks to the fact that he made an effort to engage readers directly with his website at every turn. When I asked him about it, he confided that several direct marketing “gurus” had chastised him for dropping the ball and not properly “monetizing” his new audience.
I told him not to worry about it, but Tim was way ahead of me.
He then told me a story about how he needed to be in another part of the world on short notice recently. One of the people he recently met thanks to his book let him use a private jet to get there, at no charge. He enjoyed the benefits of money, thanks to his relationship with a fan.
The gist of what I took away from my conversation with Tim is that he’s not about to do anything in the name of short-term profit that damages his long-term relationship with his fans. Smart guy, since he’ll end up with more money (and more of the benefits of money) going that route.
The Little Known Blessing of Attracting Fans Directly
In my opinion, the best thing about being an online entrepreneur is the direct relationship we have with readers and prospects by default. It used to sound so cool to hear about someone landing a recording contract or a book deal, but when you realize the struggle many of those people face just to have a direct line to their own fans and maintain creative control, it doesn’t sound all that great.
It’s no secret at this point that I believe the best way for online publishers to create fans is to teach. For whatever reason, I naturally gravitated to an educational approach to selling and to paid content right from the start, and I’ve never looked back.
Whatever your approach, keep this in mind: modern marketing is less about market share, and more about share of customer. It’s much easier to keep an existing customer than it is to attract a new one, so do everything you can to retain the relationships you’ve got. Even though the allure of the Internet leads us to believe we can conceivably reach every possible person who might be interested in what we offer, you’ll make more money by focusing on attracting the right people and keeping them as happy as possible.