Guide to Crowdfunding Music Projects On PledgeMusic
This post summarises the three most important lessons I learned whilst running a crowdfunding music project on PledgeMusic.
In it, I distill my first-hand tips on how musicians and bands like Courtyard Music Group (CMG) can use crowdfunding to reach, engage and convert worldwide audiences, without personally bankrolling their music project, and without the need for media contacts.
1. Division of labour
It’s easy to overlook so much of the work that goes into promoting, manufacturing, packaging and fulfilling a crowdfunded music project.
To sell records you need a tribe. Building a tribe relies on attracting and engaging audiences and keeping them interested long enough so that they will want to buy your rewards.
Adam Smith observed that most work is done efficiently when labourers do not have to switch tasks during the day.
In my experience crowdfunding music projects are slim on resource and you can not benefit from his “division of labour” process, simply because there is no infantry for a production line.
That said, having a lot of work to do is a nice problem to have, but remember: You better be good at multitasking, or you’ll get buried.
If you can’t create an effective division of labour, you can at least plan and execute the tasks in order of priority.
So, map your promotion, production and fulfilment out. This has the benefit of providing clarity before you start.
During my crowdfunding music project, I developed several planning documents, which allowed me to stay on track and on top of the jobs and deadlines. I plan to outline this process in detail in a future ebook on the topic. So watch this space.
2. How to budget
To minimise risk and avoid exposing yourself and your family to bankruptcy, adopt a rigorous “profit & loss” approach to your crowdfunding music project.
Start by listing every cost the project will entail. Add a safety margin of 15%. And don’t forget to factor in the commission for the PledgeMusic platform, which is 15% or your pledge revenue. Remember to add this amount to the overall goal.
When you’ve nailed your overall budget, work this budget back to a “cost per unit” and identify your “breakeven point.”
To safeguard against falling short of breakeven, develop a fallback contingency plan that will save the project in the event of a shortfall.
My publishing background taught me profit and loss analysis, but if you’re not used to working out a “unit cost,” I recommend you get expert advice from an accountant or financial controller. You don’t want to have to put your hand into your own pocket to mop up the shortfall. That’s not why you started the project, so, safeguard against it.
If I’m honest in my first crowdfunding music project, I failed to include two important costs in my budget, which almost cost me the project: a) Scandinavian VAT @ 24% and b) Shipping costs of small packages to USA, Canada, Australia and Japan. Had our music project not overachieved its goal, these extra costs would have been calamitous and detrimental to the crowdfunding music project’s success.
3. Engaging Super Fans
Every music project needs patronage. With crowdfunding music projects, it’s super important to find your patrons fast.
This involves research into where your most avid audiences hang out. Many of Courtyard Music Group’s prime audiences are active in Facebook Groups and specialist record and vinyl forums.
Researching fans is all about trawling through these watering holes and identifying the biggest, most influential advocates. The process after that is to follow, connect, comment, engage with these influencers via their preferred social network, be it Twitter, Facebook, or LinkedIn.
Curiously, I did not find Twitter to be very good. Facebook and LinkedIn were the best, in that order.
Once you connect, you need lots and lots of fresh storytelling, relevant updates, exclusives, videos, first-listens/first-looks, direct one-to-one interactions in social and email, and transparency of process.
Done correctly, you will be able to identify your “super fans” who have the biggest emotional attachment to your project, and who are willing to convey their passion and enthusiasm for your crowdfunding music project.
Remember: the things your super fans say about your crowdfunding music project to their audiences, carry one hundred times more weight than anything you can ever say yourself. It’s called word of mouth!
The Pareto Rule
PledgeMusic, like Kickstarter or Crowdcube, are reluctant to take on projects that do not come with loyal fans and email lists. The general rule is: You need to bring pledgers onto the platform to kick things off (ideally 10-20% of goal) and that means a good mailing list, and strong social following on Facebook, Twitter, Soundcloud, Bandcamp etc…
If I’m honest CMG did not have enough pre-existing fans, but that’s because CMG is not current, it’s a band from the 70s, who do not tour or record anymore, and the project is a reissue. However, I knew that I could create a story so compelling and so engaging that I could hook super fans rapidly. After that, to a large extent, patrons do your marketing for you.
You need to know that in sales “80% of of revenues come from 20% of buyers.” That’s the Pareto principle.
To be successful you need to find your super fans and patrons, who are willing to pledge hundreds and thousands in exchange for your most valuable premium rewards.
Crowdfunding music projects have a higher likelihood of failure if you have a flat distribution curve, with sales bunched around lower-end rewards.
For these people, you’re not selling product; You’re giving them an opportunity to “buy into” your project. So think premium exclusives with higher price tags, because these rewards have symbiotic value for both sides.
Tip: As crowdfunding music project managers, we need to think about our role as client acquisition and retention managers, rather than scatter gun marketers.
Doing a successful first crowdfunding music project on PledgeMusic comes with the long term benefit of nurturing your relationship with fans, so that the next time you do a direct sell music project, you start with a database of buyers.
Thanks to crowdfunding music platforms like Pledge Music, and media sharing sites like YouTube, and social media networks like Facebook, I believe there’s never been a better time for relatively unknown musicians and bands to connect, engage and sell to audiences worldwide.
PS. Tom Robinson of BBC Music 6 has some great advice for unknown artists trying to reach their audiences directly in todays post digital world.
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