This is the final segment of a 3 part series that was inspired by a mastermind program I am participating in with Ali Brown who is my mentor in the world of online marketing.
Here’s the recap:
There are three ways to increase your income:
1. Increase your number of clients (fans).
2. Increase the frequency of purchase, how often your fans buy from you. (and you’d better have more than just music to sell).
3. Increase the amount of money that you charge.
Increasing the amount of money you charge poses a problem if all you have to sell is music because music is now widely available for free, and people have proven that they are not willing to pay a premium for music.
However, fans will pay plenty of money for experiences, like a great concert or a chance to be a contribution to an artist, a special memento, or wonderful merchandise that really resonates with your fans.
I found two artists that exemplified this strategy – Jeff Krantz who created a BIG payday in one fell swoop and Phil Putnam who has been slowly increasing his bottom line over time.
Jeff Krantz & The $10,000 Song – http://jeffkrantzmusic.com
Just last night I was hanging out with past Cyber PR client who had a fabulous tale to tell. Jeff launched his singer-songwriter career in Second Life where he has managed to build a wonderful fan base.
Through networking online, he met a man who fell in love with his songwriting and became a fan. This man called up my artist and told him that he was having a big anniversary coming up and he wanted a special song written just for his wife. He asked if he would be up for writing and recording a custom song for her.
Realizing that this was a huge opportunity told his fan that he would present him with some options he began to THINK BIG. So he created 3 packages that this man could choose from with three separate prices (depending on how much he wanted to spend / how involved it would be silver, gold and platinum)
Here’s what Jeff wrote about how it worked:
As part of the Gold package that the client chose, I agreed to write 3 different songs (first verse and chorus) for the client to chose from. Once the client selected the song, Ispent 1 week writing 2 full lyrical options for the client to chose from. Once they had decided on the song, Jeff went into his studio and recorded the song, bringing in musicians to fill out the arrangement. He then sent it to a top studio to be mixed and mastered and 2 weeks later he sent the client the finished song (with the masters). “It took about 60 hours in total but it was so much fun and I made almost 10 grand for the effort!”
The point is because he leveraged just ONE relationship with just one fan he managed to make over $10,000 on ONE song.
Had he not been working on increasing his fanbase by networking online, he never would have had this opportunity present itself to him.
Phil Putnam – How To Slowly Increase Your Value – http://www.philputnam.com
(full disclosure Phil is a Cyber PR client) wrote back with what he did to increase his prices and overall bottom line.
Yes, I have taken a few steps to increase the amounts I can pull in.
1) The lion’s share of my new price leverage has come from having a very successful music video on MTV/LOGO. When you get wide exposure like that, people will pay more to hear/see you.
2) Make longer albums: my latest record “Casualties” has 16 tracks on it, price point at $11.99 on iTunes rather than $9.99, and it sells better than any of my other records.
3) Raise my concert ticket price/door charge $2-3. Ex: from $10 to $12 advance/$15 at door. I’ve seen an increase in my concert attendance since raising the price, and I also book higher quality venues.
In general, I find that being able to raise your price point is a result of two things:
1) Adjusting the perceived value of your work among your listeners. We set the pace for how people perceive us. If we say our show is worth $12 instead of $10, people will pay $12. And then it becomes our job to give them a better show.
2) Working harder to make better music, give better shows, and build better contacts. It’s simple business: you want better pay, do better work. Raising price point isn’t a marketing trick. You have to earn it.
What I like about what Phil did is he increased his momentum at the same time he increased his prices. I’m quite sure that the $2 – $3 he increased his prices by add up to be significant gains over the course of a year or two. Thanks Phil!
But again back to basic principle #1 which Phil leverages excellently: The amount of fans you have, the true fans who are connected and engaged will be the ones who can lead you to bigger opportunities down the line.
Those fans are the ones who will want to engage with you in an authentic way, and purchase whatever it is you are offering even if it costs a few dollars more or give you more than you ever expected because you provide deep value really says something.
I would love to hear how you have managed to add value and get more profit.