FREE -- good for selling things, bad for paying your bills.
When I advise singers, I stress that they should never again sing for free. And they don't have to in order to make a living from their talent.
To folks of other skills and business the same advise applies. Don't give away your services. Ever.
Now, let me contradict that or at least set up the paradox.
In every business transaction one person has value that is traded to the other person for their value. When both parties get the value they want, a deal is made.
If a singer is asked to sing at a concert and the deal is, "we'll be staging the event and have many expenses so we can't afford to pay you so we hope you'll donate your performance," don't let the conversation end there.
Most singers figure if they don't accept the free job the organizer will just get someone else so they cower and accept.
Your position of advantage is lost but doesn't need to be.
Instead, when someone asks you to do something for free, listen and understand what they're asking and understand what their assets are. Then consider:
1. They asked you so that is a great compliment. They wanted you. Work that.
2. Their event has great value because people are trading their value to come to the event. They value the event and sacrifice their free time to come and in many cases are paying for their tickets.
3. Now is your greatest time of leverage and you must use it.
First, say, "I'd love to help you out and pleased you think so much of my talent that you would ask me above so many other singers." You are establishing your value.
Next, say, "Normally the market rate is at least $2,000 for such a performance but I understand your financial difficulties and would be happy to help you." You establish the value, again, for you, and set a dollar roof that they now must think about. You've also let them know that by asking for free they are saying they are not competent in their financial dealings. Be gentle, but make the reality point just a bit.
Now, come in for the opportunity and say, "Your audience must be some special people." Let them tout their abilities to attract people. Let them brag on what good people they know. Establish the value of the audience and you further increase your value for you are being asked to stand before them.
Then say, "I'd like to thank them personally for coming." Then proposed one or two of the following:
1. In all literature that goes out before or after the event a gracious note be included from you thanking people for coming and endorsing the event or cause or whatever. Your name and picture need to be reinforced in the consumer's mind.
2. Ask for the email addresses (that's the cheapest, but, mailing labels can be acceptable or something like unto them) of everyone that has been invited so you can send them a personal note after the event. They have a list of people that they've invited. You're asking that by you sharing, they'll share. Most organization will cooperate. Some will give you the list. Others will agree to print what you need at their expense and include it in their mailings. However it turns out, begin by asking for the entire list. You may get it.
3. Tell the organizer you'd like to offer all of their audience members a special price on your product (your book, your CD or DVD, your whatever), and offer that for each sale made you'll donate to the cause or give to the company. Give them a self interest in your advantage. They'll be far more likely to give if they're going to get.
4. Something else that you need.
At the very least make sure you get all of whatever you work out put into an email that you send to the organizer that states what the arrangement are going to be. Make it a Letter of Understanding and ask them to "if my understanding is consistent with yours please reply to this email that you agree."
Be sure to include in the letter a request that the organizers, on their letterhead will give you a stirring endorsement and positive evaluation of your abilities and contribution.
And yes, you will likely need to write that letter of recommendation. You send it as a sample. Some will use that to help them get around to writing their own, but in many, many cases they'll take the words you write and use them for their letter.
I recently had our sales agents and engineers meet with some of the world's largest corporations who are considering buying our transmission when the development finishes. In the end I had the agents ask each corporation to give us a Letter of Intent to do business. We wrote the letter and the agents gave it to them as a "sample of what we'd like." Sure enough, some used the letter almost word for word and others used it to see that what we were asking wasn't unreasonable and recrafted the letter in their own words. Either way we got great letters from huge companies positively commenting on our product and stating their desire to attain the product. That had a wonderful affect on our investors, our staff and future customers who are competitors of the people we met with.
What about those who brush you aside and won't give you anything? There are a very small number of people like that. To them I say, "Let me get this straight. You want me to give up my time and talent as a value to you but you're not willing to help me out in any significant way in return?" Most of the hard noses will reconsider. For those who don't, these are the words you must absolutely say..."No thank you." Walk away and don't look back. Literally. These kinds of people aren't worth dealing with. It will be a bad experience for you.
In the end, you must not sing or work for free. You must always receive significant value. It doesn't have to be money. In the examples above while money was not exchanged, you did get a list of names and rifle-shot exposure that would have cost you far more than the fee would have been.
If you've followed the other advise I've given in my books, you'll parlay those names into far more income because you now have a great many new people/customers to add to your house list so at your next concert or event or product launch you'll have people to invite who know you, have sales from your product, and have quotes or endorsements to add to your website and other promotional materials.
All because you refuse to do things for free.
Saturday, July 10, 2010
Wednesday, July 7, 2010
Risk Reversal for Immediate and Long Term Sales
I haven't posted for a bit because I've been editing the 2nd Edition of Marketing Singers. I keep thinking I need to rewrite this book and make it a more general book for all small businesses and entrepreneurs. So little is out there to help them with their unique circumstances. But... I wrestled with the issue and decided I had to help singer first. I've added a great many more tips in the 2nd Edition. It should be to the press in August. If you want one of the first copies, email me at book@marketingartists.com
One chapter is just on 11 marketing principles in short. Here's #11.
11. Use Risk Reversal for Immediate and Long Term Sales
Risk-reversal should be a common sense and widely known marketing concept but, as I already quoted Mark Twain as saying, "Common sense is none too common."
Risk-reversal is simply taking on the risk yourself and taking it away from your customer. RR comes in many forms including: guarantees, free samples, "try one", delayed payments... and the list goes on as far as your imagination works.
This principles works in every business setting, including the arts.
Let's be a bit specific and look at guarantees. Some business people create conditional guarantees. Buy this and if it doesn't work, provided you did your part, we'll give you your money back. Many place time restrictions, performance on the customer's part, times of operations and other conditions. They do so in the belief that the customers will take advantage of them. They'll use the product, get the benefit and then try to get their money back.
The risk, therefore, remains with the customer.
None of this is right or wrong. It's simply an opportunity for you. It's part of my Zig-Zag Theory or Paradigm that are discuss later. If others offer conditions, offer none. If they have time restrictions, make yours unlimited time. If they say "you must perform" then you say "you don't even have to perform."
That gets people's attention and they will be more likely to try your products.
Of course if your product is junk, you might have a problem. I say "might" because I once worked (for a short time) with a company that produced extreme vanity products. Their diet products included ephedrine and other dangerous substances. The FDA had not banned them yet, but the owners knew of the negative effects. They also knew that nearly every product they had either didn't work or only worked temporarily. They preyed upon people's gullibility and weaknesses. This was most evident in their guarantees. Wisely, they had ZERO conditions for getting your money back except returning the product. Such a guarantees allowed a skeptical customer to try the product without fear of being ripped off – which, ironically they were with these products that cost $2 to make and sold for $135.
Now, I'm sounding contradictory. A rip-off company that let customers rip them off if they wanted. Let's just call it honor among thieves because these guys knew the facts of marketing. And the salient fact to this discussion is this proven bit of knowledge on guarantees: no matter how bad the product no more than 25% of the customers will return the product. Of course the higher the cost of the goods or service, the closer to 25% you'll be.
They sold hundreds of thousands of bottles of diet pills, thigh shrinkers, fat lip salve, muscles builders while you sleep and so forth. I'd go to their mail room and every day large bins would arrive with returned product. They checked for the unopened ones and restocked their shelves. The opened ones would be trashed. They had their standards. Never did they get more than a 20% return rate. After taking out the products that were just restocked they had no more than a 10% rate. Their margins and business plan used the 25% figure so each month they exceeded their profit projections.
Learn from them about guarantees. Guarantees work. Unconditional guarantees work even better. Now that you know about the predictability of returns, make sure your margins can handle the returns. Above all, make sure that you have a quality product with good margins and you'll have a field day in the profit picture. The few returns and word of mouth promotions will help you be successful.
Special Note to Singers:
Have you ever offered a customer an unconditional money back guarantee – "Try my singing. If you don't like me, no charge." That will turn some heads your way because it screams "I'm confident and I'm that good." Someone you don't have as a customer will become a customer.
One chapter is just on 11 marketing principles in short. Here's #11.
11. Use Risk Reversal for Immediate and Long Term Sales
Risk-reversal should be a common sense and widely known marketing concept but, as I already quoted Mark Twain as saying, "Common sense is none too common."
Risk-reversal is simply taking on the risk yourself and taking it away from your customer. RR comes in many forms including: guarantees, free samples, "try one", delayed payments... and the list goes on as far as your imagination works.
This principles works in every business setting, including the arts.
Let's be a bit specific and look at guarantees. Some business people create conditional guarantees. Buy this and if it doesn't work, provided you did your part, we'll give you your money back. Many place time restrictions, performance on the customer's part, times of operations and other conditions. They do so in the belief that the customers will take advantage of them. They'll use the product, get the benefit and then try to get their money back.
The risk, therefore, remains with the customer.
None of this is right or wrong. It's simply an opportunity for you. It's part of my Zig-Zag Theory or Paradigm that are discuss later. If others offer conditions, offer none. If they have time restrictions, make yours unlimited time. If they say "you must perform" then you say "you don't even have to perform."
That gets people's attention and they will be more likely to try your products.
Of course if your product is junk, you might have a problem. I say "might" because I once worked (for a short time) with a company that produced extreme vanity products. Their diet products included ephedrine and other dangerous substances. The FDA had not banned them yet, but the owners knew of the negative effects. They also knew that nearly every product they had either didn't work or only worked temporarily. They preyed upon people's gullibility and weaknesses. This was most evident in their guarantees. Wisely, they had ZERO conditions for getting your money back except returning the product. Such a guarantees allowed a skeptical customer to try the product without fear of being ripped off – which, ironically they were with these products that cost $2 to make and sold for $135.
Now, I'm sounding contradictory. A rip-off company that let customers rip them off if they wanted. Let's just call it honor among thieves because these guys knew the facts of marketing. And the salient fact to this discussion is this proven bit of knowledge on guarantees: no matter how bad the product no more than 25% of the customers will return the product. Of course the higher the cost of the goods or service, the closer to 25% you'll be.
They sold hundreds of thousands of bottles of diet pills, thigh shrinkers, fat lip salve, muscles builders while you sleep and so forth. I'd go to their mail room and every day large bins would arrive with returned product. They checked for the unopened ones and restocked their shelves. The opened ones would be trashed. They had their standards. Never did they get more than a 20% return rate. After taking out the products that were just restocked they had no more than a 10% rate. Their margins and business plan used the 25% figure so each month they exceeded their profit projections.
Learn from them about guarantees. Guarantees work. Unconditional guarantees work even better. Now that you know about the predictability of returns, make sure your margins can handle the returns. Above all, make sure that you have a quality product with good margins and you'll have a field day in the profit picture. The few returns and word of mouth promotions will help you be successful.
Special Note to Singers:
Have you ever offered a customer an unconditional money back guarantee – "Try my singing. If you don't like me, no charge." That will turn some heads your way because it screams "I'm confident and I'm that good." Someone you don't have as a customer will become a customer.
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