184 – Doing Business in the Music Business

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Who do you buy from? How do you choose from the wide range of products and services available? Is there a specific way we should be conducting ourselves and interfacing with businesses we choose to work with?

In this episode of The New Music Industry, I look at doing business in the music business, and offer some tips on how to get the best results possible from those you buy from.

Table of Contents

Podcast Highlights:

00:18 – What’s to come for the podcast
00:58 – The music business is a handshake business
02:13 – Doing business in the music business
03:05 – Trust, but verify
04:33 – Two sides to the equation: The business and the customer
05:55 – You’re not paying for products or services, you’re paying for value and results
10:02 – The challenges that come with pricing
10:47 – Guilty until proven innocent
11:59 – Mistakes will be made (it’s human)
12:58 – Don’t ask a business to work on performance (unless that’s their model)
16:45 – Don’t tell someone how to do their job (unless you’re willing to pay more)
23:53 – Do your homework
25:51 – Final thoughts

Transcription:

So, I have a couple of great interviews in the can already and I’m really looking forward to sharing them with you. The reason I’m doing another solo episode here today is that tomorrow I’m headed back to Calgary for a few weeks. And as you know, I spent the last… let’s say five and a half months or so in Abbotsford, BC, and it’s been incredible and I do plan to come back and spend a little bit more time out here, but I’m headed back to Calgary to visit with friends and family and do my taxes and maybe just get a little bit of a change of pace, change of environment. Always a good thing for us business owners to have.

Lessons from Episode 183

Right. So, I have another open-ended rant prepared for you. Just as with the last episode in which I talked about whether social media is the answer. Used the right way, there’s a lot we can accomplish. We can build amazing relationships.

And I think, you know, this is still very much a handshaking industry. You’ve got to get out there and meet people, otherwise, your business just isn’t going to grow. And I think we get sucked into this idea that if we just spend all our time and energy learning about digital marketing and implementing these tactics we’re somehow going to get ahead.

But the thing is, it’s really a full-time job. And you as a musician would be better served in making more music while you hire an expert who’s great at what they do and is knowledgeable and has a ton of experience optimizing your website and social media presence and so forth to do it for you.

Because doing it by yourself, there’s a good chance you’re just not going to be as effective. You’re going to have to become a digital marketing expert to be effective at this. So, no, I don’t think social media is the answer. I do feel it has its place and I do feel it plays an important role in the music business, but it certainly isn’t everything.

Who to Trust

Now today’s topic, it’s doing business in the music business. I feel this is getting to be an increasingly important topic in the music business right now because there are more service providers and there are more product providers out there than ever. There are more experts, there are more consultants, and there are more managers that you could potentially hire to help you grow your career, and this is great.

I mean, it’s awesome that we have so much choice and that there is so much great information and there are so many amazing podcasts that we can listen to, blogs we can read, and videos that we can watch. It’s absolutely astounding, but we still need to be very discerning as we begin to sift through the options and consider whom we’d like to work with and who’s the right pick for us, and who’s going to be the right choice for delivering what we’ve requested of them.

Be discerning in whom you choose to work with. Click To Tweet

I think Derek Sivers really said it well. He summed it up by saying to “trust but verify.” In other words, trust the people and what they’re saying, but also go and check. See if they have testimonials or ratings or social proof, as in maybe a big following, a larger email list, and traffic to their website.

There are so many ways that you can go out and verify the facts for yourself these days, that it’s just lazy to not do that. And I see a lot of musicians doing that. I even got someone saying, “Who are you to teach a free music marketing webinar?” And I just thought to myself, “Ah, that is so funny.”

You could come to the webinar for five minutes and if you felt it was a waste of time, you could just leave. But what if it turned out to be the best opportunity of your life to learn how to market your music and get it out there?

I don’t think any of us are really entitled to complain about the free content. We shouldn’t be going looking for more support on the things that people like me provide on a weekly basis.

This takes effort. This takes time. It’s not a huge sales engine or money-making machine. It’s just a way to build a relationship that lets you know that I’m still at it and I’m still out there.

Yes, content marketing is incredibly valuable, and it generates a lot of value for businesses when done correctly. But at the front end, this is just a ton of man-hours, as Brian Poillucci said so well in an earlier podcast episode.

2 Sides of the Equation

So, as I get into some of the meat of today’s topic, I think it’s important to acknowledge that there are two sides to the equation.

And anybody saying any less is just short-changing you because they’re often talking about themselves and how the money benefits them, and that’s wonderful. And I do think business owners should be treated well, and I do think we should be paid what we’re worth. At the same time, that can’t happen if we don’t value our customers and see this discussion really from both sides.

So, I’m acknowledging that in every business it really is quid pro quo. I scratch your back, you scratch mine. I am the business owner; you are the customer. There’s a certain amount of value that I provide, and I do my best to establish what those terms are with exacting clarity so that we both understand what it is that we’re getting in the end, what it is that I’m providing and what you’re ending up with.

This episode is focused more on the service or product provider. But with that in mind, still felt important that I acknowledge both sides because a business is not a business without customers.

So, there are just three points that I want to cover today, although I’m aware that we’re already basically five, or six minutes into this podcast episode, so I sure can ramble.

What You’re Paying for

But the first thing that I want to touch on is, you’ve got to realize we’re in the information age and you’re not paying for a product or service, really. You’re paying for the value and potential results that that product can provide.

Let’s talk about the example of a book. I’ve written four books. I have a fifth book coming out.

I’m not sure if you’re aware of this, but it takes a ton of man-hours to put together a book. It’s really on par with writing, recording, and publishing an album and all the marketing work that goes into it. I feel that a book takes even more work than recording an album does. Although you can take that with a grain of salt.

Now, it’s interesting because a book probably takes more man hours in some cases than it does to create a course or an eBook, or an audio program, or a newsletter, and yet it is the cheapest of any of those products I’ve just named when really it should be the most expensive based on the value it provides if somebody has taken the time and effort to comb over.

Every sentence and every word that’s in that book, the author hasn’t just puked it out on paper without thinking about what they’re saying or thinking about what the table of contents was, or what they wanted under each subheading, and what points they needed to be making.

If someone put a lot of thought and effort into this, if they put a lot of research into this, if they put a lot of their own experience and man hours into it, then truly it is worth way more than the average cost of what a book costs.

What’s interesting about a low-cost offer like a book is, is that basically there’s massive upside potential, but almost no risk for the customer. Because if you learn one, two, maybe three things that you can take away from that book for 15 to $35, that is massive value. That is an incredible value.

If you get absolutely nothing out of the book, then yeah, you could say maybe it wasn’t worth it, and the author perhaps should have put a little bit more time and effort into thinking about the points they wanted to make in that book.

So, one of the things that’s important to think about is to not make snap judgments based on the price of something.

An eBook may cost $35, but again, that eBook could have been poured over for a very long time, and the author may have taken a lot of trouble and a lot of time to break it all down into just the core topics, just the core techniques or essentials that needed to be covered in that book and cut away all the excess.

Editing takes time, too. It takes a lot of time. And you know what? Editors get paid very good money for their work. Oftentimes, I’ve used editors before, they get paid very well for their work.

So, today, it’s important to understand that it’s so easy to look at like a $2,000 course and go, “Well, that’s way too much. I would never spend that amount on a course. I’m just going to go find the information for free on the internet.”

And by the way, here’s a tip. You’re going to be spending the next 10, 20, 30, and 40 years of your life searching for the same information because again, someone painstakingly, curated, synthesized, and then expressed that information in a simple manner that you would easily get and understand. They went digging for the gold. If you go digging for the gold, it’s going to take you just as long as it took them to go and find it, right? So, when people come back up from the cave with gold in hand, it’s a silly thing to criticize what it is that they’ve created for you.

And on the other spectrum, it’s so easy to look at a $7 e-book and say, “Oh, so it must not be that great, right? Why would I buy a $7 e-book?” Not realizing that pricing strategy may not have anything to do with the value of the book or the results that it can produce for you.

And, if you are an entrepreneur in any capacity, then you’ve already learned that pricing strategy is incredibly difficult, and you can go and research blog posts and maybe get kind of an idea of how to price your product appropriately. But trust me, there’s no exact answer for anybody. And it depends on your audience. It depends on the content; it depends on how much value you’re offering.

So, both on the provider side and on the customer side, it’s important to understand that most of the time what’s being offered is really based on the value and the results it provides and making snap judgments based on price… it’s probably going to cause you to miss out on some great opportunities.

We live in a very interesting world today because it used to be that you were innocent until proven guilty. And the way things work now is that you’re basically guilty until proven innocent.

Trust But Verify

Well, again, I think I already said it, but Derek Sivers’ “trust but verify” method seems to apply, especially an example of Music Entrepreneur HQ, which is the business that I run.

It’s been around for a while now, and you could say that I got my quote-unquote official start in 2014, 2015, when I registered the domain and put the website there. But the reality is I’ve been podcasting and blogging about the industry since 2009 and there are 800 posts in the archives at Music Entrepreneur HQ alone.

There are tons of other guest posts and staff written posts and other things you could find elsewhere across the web that I also wrote, and even if not for that, there have been dozens, if not hundreds if not thousands of customers and testimonials and quotes and comments on social media and comments on the blog and emails that I’ve received over the years from plenty of satisfied customers.

That isn’t to say I haven’t made mistakes. I’ve probably made every mistake in the book, but that’s why I can talk about this. I thought I would’ve reached some magical time in my entrepreneurial career when I would never make mistakes, and I think one of the lessons I learned last year was that was never going to happen.

I’m still going to make mistakes. I’m human. When mistakes are made, the key is to deal with them right away if you can. And if that still doesn’t work out, then realize there are seven billion people on this planet. It doesn’t mean that you should screw people out of money or do something bad. We want to treat everyone with respect. We don’t want to gain a bad reputation, but mistakes will be made. Right? And if we can make amends, we should make them. If we can’t, we can’t. All that means is the situation is unworkable and we can move on and find a situation that is workable. But I’ll be talking more about that in a second.

Performance-Based Models Don’t Work for Every Business

The next point is don’t ask a business to do work on performance unless that is how their business is structured.

So, I’ve had James Moore from Independent Music Promotions on the podcast. I believe that was episode two, and some businesses like his have a guarantee. This is my understanding of his business by the way. He may explain it slightly differently, but as I understand it, he carefully chooses who he works with.

And where most PR companies do not offer any kind of guarantee, he offers a guarantee because he works hard for his clients to help them get results.

But there are plenty of other businesses out there that aren’t really rewarded on performance and would just suffer from having a performance-based model.

For example, if I was asked by a band to promote a 99-cent song, and they said, you could get rewarded 10% on every sale you make, we’ll just round up and say $1 because that’s going to be a little bit easier. So, let’s say I help them sell a hundred songs. I could put in one hour, I could put in 10 hours, or I could even put a hundred hours into helping them sell that amount.

It really depends on how much work is involved, and I may have to test a bunch of marketing tactics and ads and different things until we come up with a working strategy.

But regardless of the performance of any of the marketing work that I do, I’m still just getting 10% of the overall sales. So, if they sold a hundred songs and made a hundred dollars, I would get $10 regardless of the amount of time that it took me to help them reach that level. So, you can see that’s not really a great payoff. It would just send me to the poor house.

Now, there are jobs out there that are primarily based on your performance. For example, car sales. Now, the difference with car sales is you’re selling a high-ticket item, so an item that potentially costs tens of thousands of dollars when you earn a commission on that, maybe it’s not tens of thousands of dollars. It’s probably more like hundreds, maybe in some cases thousands of dollars.

But the point is, the risk is mitigated by the fact that your commissions can be relatively high. You know, for example, maybe to make your baseline income of $3,000 a month, you only need to sell three to six cars, and anything above and beyond that is just gravy. So, it works out well for the car sales model.

But in the marketing campaign example, I just gave you, it doesn’t work all that well because there really isn’t a huge, massive upside potential. This is just the reality of things. Businesses have bills to pay and unless you want to send your favorite business to the poor house, I would suggest paying for their work instead of trying to get more free work out of them.

With Music Entrepreneur HQ, yeah, my costs are relatively low. But I’m still paying for domains. I’m paying for hosting. I’m paying for various software apps that I use, like Leadpages or MeetEdgar. So, all these things end up costing quite a bit of money from month to month, and covering those expenses is just the baseline. That means there’s really no income whatsoever, right? Like if I just cover my expenses, there’s no revenue made on top of that.

So, I think understanding this aspect of business will help you understand doing business with the music business a lot better than perhaps you do right now.

And it also gives you a better idea of what to expect when you launch your own business, if that’s something you’re thinking about doing.

Don’t Tell Someone How to Do Their Job

The last thing I’ll cover here is don’t tell someone how to do their job unless you’re prepared to pay more.

I’ve worked with a variety of different clients over the years. I’ve had some amazing clients. I’ve had some okay clients, and I’ve had some terrible clients. And honestly, one of the keys to success that I’ve heard repeated from various people is to cut your worst clients on a yearly basis, like spring cleaning, right? They’re taking you more time and more energy than they’re offering in a dollar amount.

So, even if they are paying you the most money, if they are presenting the greatest trouble, then there’s a good chance they’re not worth the stress and effort that you are putting into them.

So, I’ll use my writing duties as an example because I’ve done a lot of that. Over the last nine years or so I have gained a ton of experience. Now, some people weren’t really the easiest to work with because they maybe needed a lot of edits, or they needed their blog posts to sound a certain way. I can say categorically that most of those types of clients didn’t really work out long-term.

Even if I did create some content for the short term, I think what they were expecting was somebody to be in their mind. When that’s not possible. Like I could read all your blog posts, I could read all your books. I could listen to your podcast episodes and still not really know a thing about you.

And honestly, that’s not how the ghostwriting world works. The ghostwriting world has been around for a long time and people don’t even understand its widespread influence. Many of the so-called “books” written by experts were not written by those experts, but rather by ghostwriters who didn’t necessarily know everything there was to know about those experts. So, there’s no way they could have told the story from start to finish with precision and accuracy.

So, there was kind of a general misunderstanding about the type of service that I could provide for those people, and maybe I could help them achieve better results if they were willing to pay 10 times that amount.

But you can see how it’s just not worth my effort, especially if that document gets sent back to me, I’ve really got to draw the line and say, “You know, I can’t do it for this amount of money.” And at some point, I just said, “I do one edit. And I don’t do a complete rewrite of the document that I’ve provided you with unless I was at error,” which does happen.

Some clients would just go and make the necessary changes themselves because most of the time they found that the writing was clear and easily readable, and it boosted their authority. So, all they had to do was just go in and change a few details, maybe some of the lingo, or maybe they wanted to present the stats a little bit differently than I presented them.

That model worked well when there was an editor on their end willing to put in just a couple of minutes, they were able to bring that article to a level where it was just perfect and great for their needs. So those types of situations worked out well. Some people had absolutely no feedback or complaints week to week.

And this would suggest that perhaps they were busy, but also just the fact that they were able to take care of anything on their end that needed some quick changes. And honestly, again, I feel like that’s probably the best situation when it comes to written documents because these documents can be subjected to “design by committee” type situations where everybody thinks they should have a say in how the article should look and feel and read.

And design by committee has been shown to create products that attempt to satisfy everyone but delight and please, absolutely no one. So, design by committee is to be avoided.

Now, then there were clients who gave me feedback and criticisms every week, every other week, or sometimes more frequently. And oftentimes it was kind of arbitrary and it was based on maybe some assumptions that they had about my process. Which, you know, if there are any assumptions in your mind that you haven’t voiced or expressed, you should never assume that anybody knows what you’re thinking.

The person providing the product or service. There’s a good chance they have no idea what’s in your head. And without giving some voice to that expression, misunderstandings can continue to compound and everything you say to your provider can end up coming across as a criticism or even an assassination of character.

In some cases, people really do take this seriously. Like people like me who offer products and services, we take this incredibly seriously. So, when you’re coming at us with some harsh words every other week, weekly, or even more often, we’re kind of starting to go like, “Hmm, I’m not sure if this is worth it, even based on the payout,” which might be substantial. I might be more inclined to let you go.

Really, the professional thing to do in this situation, because let’s face it, if you are working with a freelancer or a contractor who’s not a full-time employee and cannot be classified as an employee, their business processes are proprietary. So how they do things and how fast they do things is their business and not your business, and chances are they’re optimized for a reason.

They’re optimized so that they can offer their services and products on a more widespread basis, not just be serving one client, right? So, if you want to hire them as a full-time employee, that’s maybe something you should approach them with. And approach them with terms that would make sense for that person.

But chances are businesspeople didn’t go into business to have like eight million bosses, which is sort of what happens as you become a business owner.

Your customers and your clients end up becoming your boss, but at the same time, just as a customer or client has the right to fire the business owner, the business owner also has the right to fire customers and clients who are not worth the trouble.

So really, you’ve got to get this all hammered out with exacting clarity because the business owner is expecting to provide a specific type of service or product. They’ve already defined the terms. They’ve already identified the exact parameters of the project, and when you come in with your own ideas about how the project is supposed to go, how it’s run, and the results that it’s supposed to provide.

Unfortunately, that situation can become quickly unworkable unless you’re willing to pay way more for the services that you’re getting. So, when you’re making big requests, the type of requests that are going to end up costing more time, more energy, and let’s face it, more money, you need to be prepared to pay a premium fee for the services that you’re getting.

Do Your Due Diligence

So those are some of the things to think about from a business owner’s perspective. Like I said at the very beginning, I think it’s important to acknowledge that there’s also the customer and client side of things. If we don’t talk about that side of things, then it’s not ultimately fair to anybody.

But it is very important to realize that when you hire somebody to do something or you buy their products or services, that they’ve kind of done the hard work of identifying the scope of the project and they’ve already done their part and laying out the terms and the conditions.

Maybe it’s even on their products or service page, right? All the details pertaining to that project could be listed note for note in exacting clarity and detail.

And so, it’s your job as a consumer to research, investigate it, and if you’re not clear about anything, make a phone call or send an email.

You know, don’t be lazy during the buying process. Go and find out the details. Make sure that you know what you’re committed to and what the business owner is obligated to offer you and provide. What are their promises? And sometimes those promises are just deliverables.

In other words, you hire me to write three blog posts. I send you three blog posts based on the titles, keywords, and descriptions that you’ve given me. And if that meets your requirements, then that’s done, right?

Sometimes it’s a result. So maybe a PR company tells you that they’re going to get three placements on radio stations to help you get radio interviews. Okay, great. So, you get those three interviews based on the price that you’ve paid for them.

Sometimes it’s a product, which as we know can totally be subjective. But you can go and find reviews and if the overwhelming majority say, “Hey, this is great. I really love this book,” or course, or whatever it is, you can get a sense of whether it’s going to be something that you want or need, right?

Closing Thoughts

So, I’m going to leave it at that. I know this was kind of a little bit more of a rant than a structured episode, kind of like the last one, but I do find it’s helpful for me to sit here and just talk rather than having everything scripted all the time. I’m always trying different processes in case you hadn’t noticed.

I’m constantly experimenting. Sometimes I talk off the top of my head. Sometimes I have notes in front of me, and sometimes I script everything out and I like to shake things up and keep things challenging and interesting for myself, which is why I do this. But thanks for tuning in. I’m David Andrew Wiebe, and I look forward to seeing you on the stages of the world.

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David Andrew Wiebe

Founder & CEO at Music Entrepreneur HQ

Award-winning composer, best-selling author, professional musician coach, and podcaster of over 10 years. Wiebe helps musicians like you unlock your full potential. If you'd like to be notified whenever the blog is updated, click here to subscribe.

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