Is Discounting Your Products Helping Or Hurting You As A Musician? The Truth Revealed
Many mainstream musicians such as Radiohead have experienced considerable success with the pay-what-you-want or free model of distribution.
This might prompt you to believe that giving away your music or discounting it is the only way to get it heard.
Although there are times when it’s a good idea to run promotions, discounting could actually be hurting you; especially if you’re not doing it correctly.
To start things off, we’re going to take a look at a few different types of business models. This is going to help you understand the downsides of discounting.
Then we’ll take a look at how you can discount without shooting yourself in the foot.
So is discounting your products helping or hurting you as a musician? Here’s the truth.
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The Coupon Business Model
In the book, The 22 Immutable Laws of Marketing, authors Al Ries and Jack Trout suggest that the coupon business model doesn’t actually work.
You’ve probably been to grocery stores that accept coupons for product discounts; it’s not terribly uncommon.
The problem with this business model is that these stores can never move away from the coupon model. The moment they stop offering coupons, they start losing customers!
This is because customers have come to expect those coupons. If they don’t get them, they’re more than happy to take their business elsewhere.
Once your customers see you as a coupon (discount) business, you’ll always be a coupon business.
The Pay-What-You-Want Business Model
Does this suggest that the discount model is fundamentally flawed? Well, if you were to ask my friend Corey Koehler, he would probably tell you a different story.
When it comes to selling music, he actually does quite well with the pay-what-you-want model.
There is one major caveat here though; Corey is incredibly good at building loyalty with his fans. He is awesome at relating to people through his music, covering subjects that touch people’s hearts. His branding is impeccable.
If you’re going to offer pay-what-you-want products, you should probably have products that people have to pay for as well. For example, you could let your fans name a price for your singles, but charge a fixed price for your albums.
Either way, fan loyalty is absolutely crucial to the pay-what-you-want business model. If people don’t like you, then they’re either just going to take advantage of you, or never bother to check out your music in the first place.
The Discount Business Model
To reiterate what was said earlier, once you’re perceived as a discount business (musician), changing that image is difficult if not impossible.
To be fair, I believe that price is something musicians should have more control over. The 99 cent song may have done more harm than good, because it has meant that everybody’s music is exactly the same value. No one can up their price if they’re more known, and no one can lower their price to encourage more sales. This has meant that independent bands can’t really differentiate themselves; at least when it comes to pricing.
However, this doesn’t do away with the fact that there are many other issues related to discounting. Here are some you should be aware of:
- If some of your fans get your album at one price and the rest get it at another, your credibility with them could decrease.
- If you discount a product and then increase the price of it again, you risk losing sales. Potential buyers may have been ready to buy the product at one price, but not at a higher one.
- You risk making less money. Your products could be consistently earning your asking price, but if you discount them, even if you get more sales, you won’t necessarily make more money.
- Your perceived value as a brand could go down. You’re now lumped in with the cheaper, discount brands of the world (the musician equivalent of Walmart). Will Walmart ever be seen as anything other than a deep discount store? Unlikely.
- You’ll have fewer quality customers. Wouldn’t you prefer to have loving, supporting fans instead of those that complain about having to visit five different Torrent sites just to download your album?
Now I know what you’re saying. You’d rather have your music heard by a ton a people and make less money than to permanently remain in obscurity. In principle, I agree with you. I recently released a book, and I would rather have it read by more people than make a ton of money with it.
However, this doesn’t discount (pun intended) the importance of strategy. If you’re not going to be collecting money, you should be collecting something else (i.e. email subscribers). If you’re not going to be getting sales, you should at least be trading them in for some high-quality publicity. Don’t just hand over your assets willy-nilly.
Limited Time & Seasonal Promotions
This is what’s good about limited time and seasonal promotions; they’re strategic.
You’re letting people know that they can get a product of yours at a discounted price for a limited time. Maybe it’s a Christmas offering, or maybe it’s a limited edition bundle.
These types of promotions have a quality that free music does not; urgency. Urgency makes all the difference, because it encourages people to act fast. If they don’t, they’re going to miss out on a great deal, and a lot of people have a fear of missing out.
With a promotion like this, you can set firm boundaries in place. No returns. No exceptions. No extensions.
If you’re just giving your music away, you have no power over what people do with it or what they think about you.
If you’re looking at discounting your goods, there are a lot of different factors to consider.
In general, if it has the potential to damage your brand and reputation with your fans, then don’t do it.
If the promotion can get you in front of more eyeballs, boost your sales, and lead to new opportunities, then carefully consider the consequences before going forward with it. If there’s no downside, then go for it!
Just remember to be strategic. If you have no plan, you’re not marketing; you’re just playing around.
P.S. Remember though, none of what you've learned will matter if you don't know how to get your music out there and earn from it. Want to learn how to do that? Then get our free ‘5 Steps To Profitable Youtube Music Career' ebook emailed directly to you!