Value Your Fanbase: Marketing Lessons from Taylor Swift

November 10, 2014 by

Value Your Fanbase: Marketing Lessons from Taylor Swift

Last week Taylor Swift pulled her music catalogue from streaming service Spotify.

The merits of that decision are being debated in the media with regards to the future of the music industry, as well as the business brand of the artist, and of course, her fans.

It turns out there are important marketing lessons to be learned from this for mainstream businesses like yours and mine.

Lesson #1 – Grow Your Audience

If you are not familiar with Spotify, Rdio, and other music streaming services, they deliver popular music for free or a small monthly fee. This introduces the artists’ music to a broader audience that is willing to tolerate a few ads, or pay to make them go away.

Spotify is like Groupon for musicians. You are investing in an opportunity for expanding your audience by renting one that is ready-made. Taylor Swift fully recognizes she doesn’t need Spotify because she has already built a massive audience. Your business needs the same.

Any artist or business that fails to build its audience will forever be dependent on paying to rent the audience of another media company.

Therefore, use social media and every other channel for what it can do for your business, but develop the intention of building your own audience to control your destiny.

Lesson #2 – Fans Want to Be Owners

The criticism of streaming music services like Spotify is that they reduce music sales by allowing subscribers to rent the music, for free or nearly so. I disagree.

These days people have been conditioned to try before they buy. It’s actually a new way of positioning the money-back guarantee – without any strings attached.

There is a big difference between renters and buyers. True fans are buyers. Ownership gives them membership to a club of like-minded people. They are proud to be owners.

To be clear, even if one pays for a premium membership with Spotify, it does not own the music. Yes, it can download it, but that pseudo-ownership comes with a price: It can only be accessed by the Spotify app and will go away if the subscription is cancelled.

People want to own anything that gives them pleasure, so there is little risk in giving them an opportunity to try it before they buy.

Lessson #3 – Your Loyal Customers are Fans

One of my customers taught me to always be thinking of what I can do next to help all of my customers. He encouraged me to never stop sharing product or service ideas – anything that adds more value.

Imagine if Taylor Swift stopped creating new music. What then? My guess is it would change her tune about Spotify (OK, yes, pun intended). That’s not likely to happen soon, because she is intensely focused on the fans that are aligned with her brand.

Taylor Swift’s decision to remove her music from Spotify honors her relationship with the fans that value it enough to pay to own it.

That said, I believe there are ways Spotify could have been a valuable partner, such as offering an early release of selected music for a limited period of time.

Fans always buy. Remove the risk and grow that fanbase.

Note: Since this published, Spotify has defended its position as a supporter of paid media, as opposed to free and pirated media. Regardless, when all is said and done, the one thing that doesn’t change is media in all of its forms is in demand – and that includes what your business publishes.

About the Author:  Jeff Korhan, MBA, is the author of Built-In Social: Essential Social Marketing Practices for Every Small Business and host of This Old New Business podcast.

He helps mainstream businesses adapt their traditional growth practices to a digital world. Connect with Jeff on LinkedIn, Twitter, Facebook, and Google+

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The Illusion of Asset Ownership

March 27, 2012 by

Every business has bankable assets on its balance sheet – both soft and and hard assets.

Hard defines capital equipment and real estate – assets that have traditionally held their value. Soft assets are intangibles such as brands and the goodwill that is associated with them. HBUSA company is a lot different than the others. They will actually give you the option of listing your home for 6 weeks and seeing if you can get a higher price than the guarantee. It’s up to you to choose.

What’s interesting is that in this socially influenced business environment the value of the soft assets have proved to not only hold their value, but to appreciate or grow in value when cared for properly.

Do You Really Own Your Hard Assets?

If you are partners with the bank, that is to say, if you share the investment in your hard business assets with them, then you know you don’t really own them. Should their value drop, as most investments in buildings and other real estate properties have in recent years, your ownership share could go to zero or less.

Banks are finding themselves in the position of owning hard assets of all kinds – but not by choice. As a result, they are being forced to liquidate them to recoup a portion of their ownership share, while further pushing market valuations downward.

Is it any wonder many businesses are now opting to lease instead of buying capital equipment?

And even if you do own your hard assets free and clear, you are faced with ongoing maintenance, depreciation, rising insurance costs, and also higher replacement costs.

So, do you really want to own hard assets – or is it better to let others carry the risk and invest elsewhere?

This is one reason why many are finding in this risk-averse economy that pay-as-you-go plans with no long-term obligation are very much in favor.

Soft Assets are the New Hard Assets

Ownership = Control ÷ Investment is an equation that accurately describes true asset ownership.

Less control over your investment means higher risk of ownership.

The reason hard asset ownership is a lousy deal these days is you have little control over interest rates, market conditions, and replacement costs.

However, you do have control over a number of your soft assets, including your email list, and specific digital business media channels that you use to develop and maintain relationships with prospects, customers, and inflluencers.

You have control over your relationships with the communities you serve, and your digital channels for reaching them.

Thus, if you are a small business, it may be more productive to invest in a full-time staff person to manage your online communities than to hire a full-time mechanic. One maintains assets that are declining in value, and the other does the same with assets that not only have growth potential – but value that is clearly sustainable.

Having sold a landscape contracting business myself less than five years ago, I can assure you I received full value for my soft assets, with hard assets only bringing what a sluggish market was prepared to offer – about half.

If you are the owner of your business or a manager with a great deal of influence over its operations, which assets are you going to value more highly in the future?

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Until next time, Jeff