Here John O'Connor explores the parallels between a startup and a band in its infancy, explaining why many of the same principles which govern a successful startup and allow it successfully get off the ground can be applied with equal success to a band.
Guest post by John O'Connor of DIY Musician
Amazon. Google. CCR. Nirvana. Besides their overwhelming individual successes and influence, they all have something else in common: every single one of them started in a garage. Just like coders in a startup focus strictly on their core product, bands in their infancy tend to devote almost all of their time on music, and why wouldn’t they? Nobody wants to listen to bad music!
But you know what else they all have in common? They got their start in a garage but didn’t stay there. They became multibillion dollar industry leaders and sold out arenas. If you want to make a career in the music industry, you’ll have to tackle business issues with no less energy and creativity than you bring to the music.
He’s not a businessman; he’s a business, man.
Let’s face it, the business side of music isn’t always sexy; we’d all rather spend time with our favorite instrument than calculating the ROI of tours, profitability of different merch lines, and everything else. However, if you’re not paying attention, the expenses associated with your growth tactics can quickly strip away any revenues.
The solution to this is to treat your band just like that scrappy startup whose clearest measure of success is user acquisition cost, or how much you need to spend to win over each new customer.
Bands, of course, call these customers “fans” and the goal is to get as many of them at the lowest possible cost. To get out of garage mode, you’ll need to be curious yet stay laser focused: every penny your band spends — from music videos to new songs, guitar strings to gas — should contribute in some way to your goal of adding new fans.
Every band has different user acquisition tactics, but most will use some blend of these:
- Releasing new music is absolutely necessary but the costs of studio time, generating album artwork, time spent writing, release fees, and advertising can really add up. Fortunately companies like CD Baby can help you through the whole process of releasing and selling your music.
- Releasing visual content like music videos, vlogs, and livestreams helps build your brand and gives you a mass platform for engaging with all of your fans, but you’ll need to invest a lot of time and money in planning, filming, editing, and advertising it.
- Playing live shows helps you connect more intimately with fans and grow your presence regionally, and ticket sales and merch are responsible for huge chunks of most bands’ income. However, a good tour requires lots of time to plan and significant financial investment for food, lodging, booking, promos, fuel, and auto maintenance or rental.
Calculating costs for fan acquisition
A startup would sum up their marketing expenses and divide them by the number of new customers they added to calculate their user acquisition cost.
Your band’s expenses are pretty straightforward to calculate: save receipts and invoices and be diligent to log them somewhere. The hardest part of the equation is counting your new fans, but you’ll first need to set goals and define what a new fan even is. To pull it off, you’ll need visibility into several different channels including social media likes and followers, digital stream count, album sales, live show attendance, and email list subscribers.
The good news is that it’s easy to track the effects when you release new music and video content online. Most social, streaming, and distribution platforms offer audience analytics tools to you for little or no charge; use them! For a more comprehensive view of how your business is advancing, you should also consider trying out a free tool like Next Big Sound.
The number of new fans gained from live shows can be trickier to pin down, but one great tactic is to encourage new fans to drop by the merch table and sign up for your mailing list. Offer an item like a sticker or a free song download to drive more of them to convert from passive listeners to active fans. You’ll be able to reap the obvious benefit of having a way to contact new fans for plugging your new single or tour, and — every bit as importantly — you’ll also have a concrete list of new users. At the end of the tour, divide the total cost of the tour by the count of new email addresses in your dataset.
There will be some trial and error to the inexact science of expanding your fan base, but you should always be in the cycle of trying something new, measuring its success, and learning from it.
If you’re ready to decrease your user acquisition costs, here are some practical, tried-and-true growth hacks you can try in order to stretch your band’s dollars the furthest:
Find another band or artist to collaborate with on a new song, then co-write and release it together. If you split the recording and advertising costs, the savings can really add up. More importantly, when both bands push the song to their fans, you’ll trade access to your fans for access to theirs, which increases the potential of your return.
Attention spans are low and content is king. Sharing content regularly is a great way to engage with your fans. You probably can’t release a new song every week or hit areas on tour more than once or twice a year, but you can post good content frequently, and it doesn’t have to cost a ton of money. Having professional music videos is great, but creating lots of low-budget video content can be even more effective.
Try releasing a “behind the music” for each track on your new album to give fans the inside scoop of the song and recording process. Livestream your acoustic sets. Post videos from the road. The more content you have, the more the audience will feel connected to you and the more willing they’ll be to dish out for your new record or show up when you visit their town. These users tend to have a higher lifetime value for your band and are also the most likely to share your content with their friends, helping you organically increase your following.
Playing live shows
When you’re traveling to new markets to reach new fans, make sure you’re actually playing for a crowd and not empty rooms. If you don’t yet have a significant number of fans in that new market, it’s critical to connect with bands who do. It doesn’t cost a thing to have them open a show in front of your fans in exchange for you playing in front of theirs.
Bands have been swapping shows like this as long as tours have been played, and for good reason: it’s by far the most cost-effective way to grow your live music fan base. Once you’ve played a market a few times and earned some fans of your own, you’ll be able to leverage that asset to get better offers from area venues and promoters.
Arranging a good show swap can be really time consuming, so consider trading shows inside of a big, international network like Flock (flocklive.com) in order to ensure you’re playing in front of people and not just chairs, even in those markets you haven’t played before.
So what are you waiting for? Start hacking your band’s growth now and graduate from the garage!