Music Business Blog by Jason Feinberg

So let’s talk advertising.

Many of you are in bands or run labels and are at a point where you want to start spending some money to promote your releases. This is a great place to be in, but there are few things you need to consider first.

Advertising supplements your other promotion activities; it does not replace them. As in, you won’t see too many results by simply spending a ton of cash to advertise. Instead, you need to start by ensuring you have a solid promotion base – usually made up of publicity, radio, Internet, and touring. Then, once you have some interest and some existing awareness, advertising can really ratchet that coverage up and produce exponential results.

So how do you know when you are ready to advertise? There’s no formula, but here are a few helpful questions:

Have you done as much as possible for free? As in, Myspace, viral video, street teams, etc?

Have you had positive reaction to your current efforts? As in, more CD sales, more show attendance, positive reviews, etc?

Do you know the characteristics of your target audience? Do you even know who your target audience is? If not, it will be next to impossible to maximize the placement and message of your ads.

If you answered yes to the above questions, you will probably see results from advertising (if done correctly). We’ll talk about that next time.

From ZDNet

Nielsen SoundScan has reported a dramatic growth in the sales of digital music downloads for 2006. Through the first 49 weeks of 2006, sales of individually downloaded digital tracks are up more than 67% over the same period in 2005, accounting for more than 525 mln digital downloads; already 173 mln more than 2005’s annual total. Historically digital downloads have dramatically increased year-over-year. In 2005, digital track sales reached 353 mln; 150% higher than total track sales for all of 2004. In 2004, digital download track sales broke the 100 mln mark with more than 140 mln digital tracks sold. In 2006 to date, 54 tracks have sold more than 500,000 units as opposed to only 22 tracks in all of 2005. None reached that sales mark in 2004. Digitally downloaded albums have increased more than 100% with 29.7 mln YTD in 2006 versus 14.5 mln in the same time period in 2005. In 2006 to date, 11 albums have sold more than 100,000 units digitally comparing to only 3 for the entire year in 2005 and none in 2004.

Here’s a thought – so many retail products (and often services) offer a money back guarantee. Very few artists have ever tried this with music. Here’s an interesting article that talks about the pros and cons of guarantees.

Should You Offer a Guarantee?
by Alexandria K. Brown, “The E-Zine Queen”

Many new business owners ask me, “Should I offer a guarantee? I know it will help sales, but the risk really scares me.” I offer guarantees on everything I sell, but that doesn’t mean you should too. Here are some factors to consider and some ideas to get you started.

The Pros:

A guarantee puts your prospect at ease, giving her no reason NOT to buy or NOT to work with you. After all, if you don’t stand behind your product or service 100%, what are you doing in business?

This is especially true if you’re selling products via the Internet. People at your website don’t have the chance to meet you in person and see that you’re legitimate, so it’s your job to give them complete confidence in buying from you.

The Cons:

With some service-based businesses such as consulting, it may be hard to guarantee your work or your results. (Especially if your clients’ cooperation is required to ensure their success.)

Also, a few turkeys may capitalize on your generosity. For example, my “Boost Business With Your Own E-zine” system was originally an e-book when I launched it a few years ago. It would not be unusual to see a person purchase it, download it, and request a refund 2 minutes later. Obviously they hadn’t even read it yet and they just wanted to get the information without paying for it.

But in my experience with Internet info-products, the amount of sales you GAIN from offering a guarantee dramatically outweighs the risk.

Types of Guarantees You Can Offer

“Money Back” or “Satisfaction”: You promise to refund your customer in full if the product does not work or if she’s not happy with your product.

“Price-Protection”: This can mean either locking in a price forever, such as with services or memberships that are billed on a recurring basis, or guaranteeing that you have the lowest price anywhere for that particular service or product.

“On-time”: If your clients are always concerned about getting your service or product on time, this is a good one for you.

And these are just a few ideas!

Should You Make it Easy, or Hard?

Some business owners make their customers jump through hoops to get their money back. While I understand not wanting to make it TOO easy to get an instant refund, there are risks. If you make it really hard, your customers may just skip dealing with you and go direct to their credit card company.

I had to do this last year with a company whose seminar I signed up for. After registering for their event, I was scheduled to speak that same week across the country, so there was no way I could attend. My assistant called their office multiple times, but we kept getting the runaround. Finally, after three weeks, I just called my credit card company. They took care of the matter promptly once we filled out a simple form.

This process is called a “chargeback”, which can reflect negatively on the vendor’s merchant account standing as well as result in penalty fees for the vendor. So obviously, as a vendor, you want to avoid chargebacks by making the refund process easy for your customers.

Should There Be a Time Limit?

Setting a time limit is up to you. Common ones are 30 days, 60 days, 90 days, a year, or a lifetime. Some studies show the longer the guarantee, the less returns you’ll get. Why? Customers are more likely to mark their calendar regarding a shorter guarantee. With a longer guarantee, they don’t feel pressured, so many of them forget about it.

How Should You Word It?

There are many ways to word guarantees, so to get started, I’d look at the standards in your industry. For information products, many people are modeling the guarantee I have on my “Boost Business With Your Own E-zine” system” sales page.

Feel free to do the same or modify it to your liking. I won’t mind at all!

© 2004-2007 Alexandria K. Brown

Online entrepreneur Alexandria K. Brown, “The E-zine Queen,” publishes the award-winning ‘Straight Shooter Marketing’ weekly ezine with 21,000+ subscribers. If you’re ready to jump-start your marketing, make more money, and have more fun in your small business, get your FREE tips now at www.EzineQueen.com

For those readers that are in a band, manage a band, have a label, or really have ANY company or service where you want more business than you have right now, you need to be utilizing publicity.

Plain and simple, publicity is editorial coverage – placement in magazines, on the web, on television – that you don’t pay for. It is essentially the opposite of advertising, which is guaranteed paid placement. Instead, when seeking publicity, you are trying to convince editors (music directors, programmers, etc) that what you have will be of interest to their audience. The decision to give coverage is solely up to them, hence it is seen as more truthful and honest than a simple ad.

Publicity is fairly simple – find appropriate outlets, determine the best person to pitch, and then inform them of your CD (dog walking service, new drug). It is also smart to specify the exact type of coverage you want. It is important to remember two things – the outlet must be relevant, and your pitch must be newsworthy.

Examples of newsworthy topics include a new CD, an upcoming tour, a lineup change, launching a new label, and the outside activities of your artists.

More to come…