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The money is in the list!

Money in an envelope - image accompanying an article about building a band mailing list

Unless you’ve been living under a rock for the past decade, you’ll have noticed that selling records has become more and more difficult.

And you don't need a degree in rocket science to see why: ever since records became ‘files’ rather than physical items, it’s been getting easier and easier to obtain music for free – either through file-sharing or legal, ad-funded services like Spotify. So, in a world of free music, how do you actually make any cash out of your tunes?

One important answer to this tricky question is this: the money is in the list.

What list? The list of people who have given you an email address. Generating a decent database is one of the most important things that a band can do these days, but, perhaps understandably – as “data management” isn’t exactly the sexiest aspect of a rock career – it can get overlooked by bands.

So, in this article we’re going to spell out the benefits of having a good fan database, suggest ways to build one, show you how it can generate income and outline some pitfalls to avoid.

Why an email database matters

Having a good email database of your fans is a really important for a number of reasons:

  • The people who are interested enough to give you an email address are probably the people who are most likely to buy your music and merch. They are amongst your warmest "leads".

  • Communicating with your list is extremely cost-effective. If you’re on a budget, you can technically email everybody for free, or if you want to be a little more sophisticated about things, you can use an inexpensive but very useful email marketing tool (more on which anon).

  • Email addresses can be used not only for direct-to-fan communication but for building up fanbases on social networks. For example, Facebook and Twitter allow you to connect contact lists and identify profiles of people who are on them.

  • When used in conjunction with a half-decent email marketing system, your database of email addresses can tell you a hell of a lot about your fans – where in the world they are based; how many of them open your emails; what sort of content they particularly like and so on. You can use all this data to decide what sort of merchandise to sell them and where to do gigs.

But how do you build an email database?

Ok, having spelt out the benefits of an email database, how do you actually create one? There are a few different ways you can go about it.

  • At the very simplest level, you can just whack an email address on your site that people can send a message to if they want to join your list. You could then store these email addresses in Outlook, or an Excel spreadsheet. However, this is a very 1990s, less-than-ideal way of going about things – not only will ‘spambots’ find your publicly-listed email address and send you a load of junk mail, but the above method relies on you manually filing a bunch of email addresses. It is a quick way of getting a list on the go, but I’d personally avoid this method.

  • Getting a little bit more sophisticated, you could use a free service like JotForm to build a form that captures email addresses; this lets you capture more details about your fans and will send an email to you every time somebody completes your form. However, it's all still a rather manual process requiring Outlook lists or Excel spreadsheets.

  • Getting more sophisticated again, you can use a professional email marketing app such as Getresponse or Mailchimp. These are nifty tools that allow you to do a whole host of useful things, like create HTML emails (emails that involve graphics and photos); send pre-written, automated emails (autoresponders) to subscribers; see who’s opening your emails; find out where your fans live (!) and much more. Unsubscribes are handled automatically too.

Ok, so how do I actually use my list to make money?

First, you’ve got to be realistic about things: despite your list containing your ‘warmest leads’, only a very small proportion of them will actually part for cash for anything – as a rule of thumb, around 1% to 5%. So if you have 1,000 people on your mailing list, you can expect 10 to 50 sales of something.

So, the best way to generate income out of a mailing list is to grow it so that it is as large as possible.

And how do you do that?

  • Incentivise things – spell out the benefits of joining your list (this usually involves giving away music).

  • Consider using online adverts on Facebook or elsewhere to encourage people to sign up to your list. However, be aware that this can be an expensive activity which is full of pitfalls…see our article on Facebook advertising for more information on how to go about this.

  • Make it easy for people to sign up. Keep things basic: capturing name and email address is usually enough (although if you’re planning on touring, a postcode field is a good idea).

  • Mention the mailing list at every gig you play, and always capture email addresses at the door of events – ask every paying gig-goer you have to join your mailing list as soon as they walk in the door of the venue. Leave sign-up forms on any tables in the venue.

  • Ensure that your website features data capture forms prominently in all areas - on the home page, in the side bar etc.. Pop-ups and welcome mats, when used wisely, can also increase the number of email addresses captured.

Once you’ve got a large number of subscribers on your mailing list, you can send them e-newsletters about about physical releases, downloads, merchandise and gigs.

You should try to do this in as personal a way as possible — don’t talk to your fans as though you’re an airline emailing its customers; rather, communicate in a genuine, heartfelt way that lets your listeners know that you value them.

And think out of the box when it comes to what you actually sell to your subscribers. Yes, you can try to encourage them to purchase CDs and downloads, but in the streaming era this is always a hard sell. So think out of the box — innovative merch, crowdfunding and unique live experiences can potentially raise more revenue than CDs. See our ‘Let’s get physical’ article for a few suggestions on this front.

Using your mailing list wisely

Remember that once you have a huge mailing list, don’t overdo things. Think long and hard before you hit the send button on every e-newsletter. Do you really need to email everybody once a week with inane news about your granny? 

Also, remember that with mailing lists, it's incredibly easy to break the law; there are quite a few data protection regulations that you really need to adhere to if you're capturing email addresses (especially in the GDPR era). The key things to remember from a legal viewpoint are as follows:

  • Make it clear to users what they are signing up to

  • Use a 'subscribe' button or 'Yes, sign me up to your updates' checkbox

  • Give users an easy way to unsubscribe from you newsletters.

  • Store your data securely

And finally, although the money may be in the list, it isn’t ALL going to come from flogging recordings.

You may find that even if you have a large mailing list packed with enthuastic supporters, they may still not be arsed buying a record which they can listen to on Spotify for nothing.

But they may very well pay to see you live, wear your t-shirt or drink from your mug. (Check out our article on Ryanair’s business model (yes, really) for some ideas on how to make money from fans who will happily listen to your music for free but won’t buy any albums from you.)

See also

If you’re investigating the world of email marketing, there are a few reviews on email marketing apps I’ve written which will help:

And finally, you may find my guide on how to create an e-newsletter helpful.

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Rock success – the Ryanair way

Ryanair and rock success - what do the two things have in common?

Ryanair and rock success - what do the two things have in common?

In today’s article we’re going to make you approach your music career the way Ryanair approaches its business model. Hopefully this won’t lead to you firing anyone in the band who’s in the Musicians’ Union, charging people an extra £60 for turning up to one of your gigs in a wheelchair, or having fans that absolutely hate you but reluctantly buy your records anyway because they're cheaper than all the other bands' albums; rather, the point of it is to look at:

  • the power of free stuff in opening up other markets and revenue streams
  • the importance to musicians of sticking to budgets.

What most people don’t realise about Ryanair is that they are not really an airline. Sure, they fly a lot of planes, but they are a multi-faceted business that actually make their money out of

  • selling a load of things that aren’t flights
  • keeping their business costs as low as possible.

Let’s start off by examining  the first bit: the ‘non-flights’. Ryanair will indeed sell you a ‘free’ (or extremely cheap) flight. But that’s really just a cunning ploy to make you buy other crap. Because once they’ve tempted you with the flight, they now have an opportunity to do three main things:

  1. Sell you a huge range of other products and services that simply don't resemble an airplane: travel insurance, bus tickets, sandwiches, car hire, hotel accommodation, credit cards, scratchcards, calendars, perfume, tobacco, gift vouchers, ‘approved-size’ travel bags, saucy calendars, airport parking…
  2. Subject you to a raft of terms and conditions that come with punitive fees for those who transgress them (£35 for having the wrong-sized bag at the gate, anyone?)
  3. Make any other essential aspect of taking your flight as expensive as possible via hidden charges (think of the very expensive credit card booking fees, or high charges for those who need to bring a suitcase or sports equipment on holiday).

The truth is that the free flight is really the ‘turnkey’ to get you into the Ryanair selling machine. The free flights generate a new market for the company, which is then bombarded with pleas to buy additional services and products. And clearly, enough people do find ‘The Girls of Ryanair’ calendar, a cardboard sandwich or an extortionately-priced small can of Heineken worth parting with cash for.

The other successful aspect of Ryanair’s business model is to do with keeping costs insanely low, meaning that they really maximise the profit from all the other tat they sell very effectively. They do this via a pretty draconian stance against unions; paying relatively low wages compared to other airlines; reducing the number of staff they employ to a bare minimum; forcing customers to book their own flights and check in online; and using cheaper, more regional airports.

“So what on earth has all this got to do with my rock and roll dream?”, I hear you ponder. Well, just as with cheap airlines, the music industry is a viciously competitive business, and in this digital era, is as much about free stuff and low costs as anything Michael O'Leary could dream up. Odd as it may sound, Ryanair's business model might finally be the thing that that helps you turn that money pit rock career of yours into something that actually makes you a profit.

Ryanair might have a choice about giving away free flights, but musicians increasingly don’t have this choice about giving away their music for free. The relentless march of the internet means that music is arguably already free - and getting freer by the day, thanks to file-sharing and the increasing availability of streaming services like Spotify and Apple’s iCloud. But just as Ryanair make a lot of money out of ‘non-flights’, musicians can also generate cash out of 'non-albums'. Here’s how a Ryanair-style model might work for a band.

First, the band give away an album download in exchange for an email address or Facebook ‘like’. This free album is the equivalent of Ryanair’s free flight, the turnkey which opens the door to new, less obvious, business opportunities. Then, using this email address, they provide fans with the opportunity to buy a range of other stuff related to the band, for example…

  • limited-edition, physical editions of the band's music: signed CDs, special vinyl pressings, designer USB sticks and so on
  • t-shirts
  • tacky merchandise: mugs, mouse mats, hats, calendars and anything else that fans might consider a desirable object (Cafépress allow you to whack your band logo on a thong)
  • signed posters and lyrics
  • gig tickets
  • private performances in fans homes

Additionally, if you are a big enough act, with enough traffic going to your site (or a big mailing list), you could actually contemplate selling advertising to other bands or music-related businesses.

The point is that strictly speaking, none of the above stuff involves the fan buying a recorded song – it’s all ancillary stuff…but your free music provides you with an opportunity to sell it.

As for Ryanair’s approach to keeping costs low, there are lessons to be learnt here too for independent musicians. We hope that you won’t be as heartless as Ryanair when it comes to anybody you employ (surely you’re not that big a bastard), but if you want to turn a profit from an independent release, you do have to be very mindful of cost reduction.

Let’s say that you are a singer-songwriter that typically sells 300 albums at £10 apiece per release. Of these 300 record-buyers, 75 might attend the album launch, paying £10 in at the door. You might generate another £250 from t-shirt sales or other tat. Meaning that before your costs are deducted, your indie album project has the potential to generate £4,000. In these crazy economic times, this is not an amount to be sniffed at. But how do you hold onto as much of this cash as possible? It’s all about the cost reduction. Here’s some ideas on how to do it.

  1. Consider not printing any CDs. They’re on the way out but, when design and manufacture costs are considered, can be incredibly expensive to produce.
  2. If you are getting physical (i.e. printing CDs), see if you can barter with graphic designers. Do you have a skill that you can swap in exchange for a CD sleeve design? You can apply this barter technique to other aspects of the release too – your session guitarist might need a website, for example, and you might be just the man to make it for him, so long as he'll do a free gig or two for you.
  3. Cut out as many middle-men as possible. Although it’s always worth getting a digital distribution arrangement of some sort (i.e., via Tunecore, Zimbalam etc.), do set up a Paypal account and get as many of your fans as possible to buy direct from your site. 
  4. Always do a cost-benefit analysis before spending any money on a project. Before placing an advert in an expensive magazine, try to work out how many albums you will sell as a direct result of that ad. Before mastering your album at Abbey Road, consider if it will maximise or reduce profit. Apply this logic to every stage / aspect of the release.
  5. Use negotiation skills to get the best price from any agency, plugger venue or manufacturer you may be hiring. Ensure you are getting the best bang for your buck, and, unless it’s Prescription PR we’re talking about, shop around :-)
  6. If you are a singer-songwriter, ask yourself if you really need to spend £1000 on session guys for a live performance that will only take in £500 at the door.
  7. Create a profit and loss spreadsheet  at the start of your project. And stick to it!

The point of all this is to get you thinking about music like a business. This is not very romantic, admittedly, and may not fit well with your well-crafted starving artist image. And nobody likes to mention Ryanair in the same sentence as rock success. But the point is that the rock and roll dream and bad decision-making typically go hand in hand. You get so sucked in by the dream that you will spend daft amounts of money to create that diamond-encrusted digi-pack, but you’ll neglect to set up a Paypal account that you an use to sell overhead-free digital downloads direct to fans. Or because you are so wrapped up in selling albums, you forget that even a modest fanbase can generate significant income for you if they can be persuaded to buy other stuff too. Maybe enough income, one day, to allow you not to have to resort to buying that ‘free’ Ryanair flight.

Now, where is that 'Girls of Ryanair' calendar I bought on Prescription's last outing to Majorca?

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