Here’s a great example of the principles of this book in action — and why I recommend it so highly!
I had a really interesting buying experience happen to me last week…
If you’re a regular reader, you probably know I’m into electronic music. I produce and also DJ — primarily “house” music.
Well, one of the labels that puts out the most music I’m into these days is Toolroom Records, based out of the UK.
And they recently sold me something rather unconventional for a record label — and I think there’s a big lesson in it for you.
First, here’s how the DJ/dance music industry works today…
Most artists and most record labels do not sell direct to consumer. Instead, there are a handful of online record stores that specialize in music for DJs. And most of those don’t even deal directly with labels — the music goes through a digital distribution company.
(Interestingly, this is the market that pays the most for music today — most DJ music goes for $1.49 to $2.49 per track, versus $0.79 to $0.99 for consumer music. And yet, that seems cheap to me because I used to have a $100/month vinyl habit, buying records for up to $12 a pop.)
So, in the course of getting an MP3 from artist to DJ, there’s at least four people “touching” it, and four people taking a cut…
— Artist
— Label
— Distributor
— Record store
That’s means an already-small pie is cut into a lot of pieces!
While the biggest world-famous DJs are now featured by Fortune magazine for the tens of millions of dollars per year they’re making, it’s mostly NOT from music. While selling their own music makes up a small part of their income, it’s the performance fees, appearances, licensing, merchandise, record labels they own, and other items that combined create their huge income (with performances definitely leading the charge in terms of dollars made).
And yet, some are getting creative with their revenue strategies…
Like I said before, I follow Toolroom. They’re consistently releasing high-quality house music, and my biggest worry is buying too many records from the same label! (Part of a DJ’s “signature” is in the music they find — buying all your music from one label goes against that.)
But last week I came across an ad somewhere that they were doing something I’d never seen another record label do.
They’d launched something called “Toolrooom Academy.”
One of their top artists sat down in a studio, in front of a live audience, and recorded the making of the bare bones of a house record.
This gave them the opportunity to talk through their process, giving little production tips and tricks along the way.
They’d partnered with a start-up putting together similar training from lots of industry sources, called FaderPro.
And they made the training available for $29.
Now, in our industry (and in many others), nothing here is new. The thing is, I’d never seen such a quality execution of this concept from such a big brand in the space.
Now, I was interested enough to begin with, but their offer made me respond right away!
Toolroom has a ton of happy customers all around the world, who regularly buy DJ music from them.
They’ve also spun off into a number of complimentary industries that are more standard fare for record labels. This includes selling music sample libraries (used for production), merchandise, hosted club nights and other live events, and likely partnership deals with their artists allowing them to take a cut of performance fees.
This training though, it was a different beast entirely!
But here was the icing on the cake. At the end of the 71-minute video, the artist — Harry Romero — had the beginnings of a really good track.
Instead of him going off to finish it on his own, they decided to include the parts of the track with the purchase of the training.
And until February 8th, you can download the parts of the track, edit and remix them into your own completed work, and submit the track to Toolroom’s team for review.
The winner gets a whole package of stuff, including getting the track they made (with Harry Romero as co-writer) released on Toolroom and promoted by the Toolroom machine. Plus, it gets you an in with one of the best record labels in the world, as they’re always looking for new artists to join their roster.
This is a HUGE potential value for one buyer, but it puts a hard deadline on response.
If you’re interested — and I was! — you have to respond in time to get your remix done by February 8th.
It was cool enough that they’d added training to their revenue strategy — but by tying in the remix contest (which many other labels do with free entry), they most certainly have sold a lot more training than they would have otherwise.
This is an incredible example of one of the most important principles you need to know for growing a business…
The single-most profitable thing you can do once you have a going business is to figure out what else your customers want to buy from you…
There’s a book I’ve recommended many times before, and one that I’ll recommend many times again.
Ready, Fire, Aim: Zero to $100 Million in No Time Flat. It’s by Mark Ford, under his Michael Masterson pen name. (He’s a regular reader, by the way — which for me is totally flattering, and for you tells you that you’re in good company.)
Mark is a partner in Agora, Inc., the multi-$100-million direct-to-consumer publishing giant, the parent company of many of the biggest names in wealth and health publishing.
Mark has also been instrumental in helping over two dozen companies grow past the $1 million mark, quite a few of those to $10 million and beyond, and the two biggest to $100 million and beyond.
Mark knows a thing or two about growing businesses. And in that book, he talks about the stages of growth that take you from zero to $100 million.
The first stage of any successful business is to simply learn to sell something at a profit. The business itself doesn’t necessarily need to be profitable, but every sale should earn more money than it costs to make the sale and fulfill on it.
The most important part of these early sales isn’t necessarily the profit you’re making — although that is nice. What’s important is that you’re building a customer base and buyer file.
Do this for a little bit, and you run into a very interesting phenomenon…
Once someone has bought something from you once… They likely want to buy from you again!
That’s what leads to the second stage of business growth.
While it was important to focus on selling that one product at a profit to get started, that’s also just the beginning.
As long as you don’t suck to do business with, some of your customers will find themselves drawn back to you. Over and over again. Wanting to do business with you, as long as you have something good to offer.
Your ability to fill that need drives the second stage of business growth.
That’s exactly what happened to me, with Toolroom. I’d mentioned just a day or two before to a DJ friend of mine how much I like their music. Then, they put the perfect offer in front of me to buy something complimentary (“learn how to make Toolroom-style music”) but different.
Not only that, let’s assume Toolroom is getting 20% of every track sold. At an average price of $2, that’s $0.40 per track.
For the training, I’m sure their partner FaderPro is getting a lot of the revenue. Let’s say Toolroom gets 50% for promotion and providing content. At $29 for the training, that’s $14.50 per video sold — more than 36X as much revenue as selling another track!
Or put another way, they’d have to sell me 36 tracks to make the same amount of money off me as they made from selling me the training.
See how valuable that could be?
What else can you sell your customers, that might be really enticing to them, that’s outside of what you’re doing now?
Yours for bigger breakthroughs,
Roy Furr
