Turning your street team into a sales team

Posted on May 2, 2010

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I think that the title of this chapter summarizes the intent of social media as applied to its role in the distribution of your product.  Seeing it that way brings to mind walking through Times Square and running into people selling CDs by a local hip hop artist.  Isn’t that pretty much the definition of a street team?  People who are willing to get out there on the street to sell your product?

 

The dream of being able to utilize social media programs to enable an artist to build a street team of hundreds, thousands or even millions of people who will actively purchase and promote your products is a valid one.  Best of all the whole process is supposed to be free!  My question is how well does that concept really work?  Or more precisely how well does work for everyone?  Just about anything will work once, the hard part is finding something that work every time for every artist.

 

Obviously the concept of free only goes so far and ideally only goes one way.  I mean, you want people to buy your CD or DVD right?  But you want them to provide their promotional services to you for free, right? Ah, in a perfect world…  We all know that the Internet has gotten consumers into the habit of expecting to get things for free.  Everybody in the industry bitches about that, from the major labels down to the local bar band, but did you ever stop to think about the fact that you expect the same thing?  You expect advertising platforms such as MySpace, facebook and twitter to be free for you to use to sell your products.  You expect companies, like Amazon for example, to essentially work on commission when they manufacture and distribute your product.

 

So that is the problem isn’t it?  You set up a virtual storefront for free, your new products are being manufactured and distributed as needed at no upfront cost to you, you’re getting free advertising from your fans, now how you get them to pay for your products with real world money?  I’m going to try to find ways to enable you to do just that, I just thought that a little reality check might be in order before we get started.

 

There are people out there trying to sell various methods that are supposed to grow your fan base on social networks by hundreds or thousands of people in a short amount of time.  Some work, some don’t but the easiest way to do it is probably just to go through the friends list of other bands and filmmakers and send individual friend requests to all of their friends.  If you have a half decent product and are willing to put some work into it then you should be able to have a large number of followers in a short amount of time.

 

In a lot of ways I question the value of having such an artificially large number of friends.  Yes, the practice of random befriending has created some stars (if you count Tila Tequila as being a “star”).  When it comes down to it though how many of her 1,000,000 or more friends actually read any of her posts or buy any of her products?  The reality is probably only a few hundred, so what is the value of having a million friends?  Probably just vanity more than anything else.

 

You could make the argument that Tila’s large number of followers was what got her noticed and got her jobs in reality TV and you would be right.  Think about that though, for her, the web and all her followers were just a means to an end. That and being to gain enough and notoriety to make money in the real world.  I think that the media companies are getting wise to that though and are ascribing less real world value to Internet stardom.

 

Ideally you already have a solid core of supporters across various social networks and finding ways to capitalize on their support could be very beneficial.  There are two ways to do this that I see being marketed to independent artists.  The first is to build a network of 1000 supporters that will spend $100 each on you and your products every year.  The obvious outcome is that you have $100,000 a year income.  The idea involves giving those 1000 supporters extra value in exchange for their willingness to support you financially.

 

The second method is to sell products with various levels of value.  The last two CD releases by the band Nine Inch Nails are cited as examples.  Their various value packages range from free downloads only up to a $300, signed a special edition.  For NIN the model worked very well.

 

If in both of these examples at the operative word is value.  With that in mind I thought I would look into creating another way for indie artists to involve their street teams in promoting their favorite artists which would provide financial value to both the artist and the fan.  An idea came from the first paragraph of this story.  Why not turn your online street team into an online sales team?  It seems to work well enough for independent artists in the city so why couldn’t work in the global community of the Internet?

 

I mean we are all very familiar with affiliate marketing at this point, right?  What if, instead of having 1000 fans that were willing to spend the $100 of their money on your products each year, you have 1000 fans who could earn $100 for themselves by selling your products each year?  If we assume those 1000 fans are making a 10% commission and that your CD or DVD is selling for $10.00 then, each of your 1000 special fans would be selling 100 of your CDs or DVDs each year via their own blog or website. Your gross income from those 1000 fans would then be one million dollars.

 

If your cost for manufacturing those CDs or DVD’s is $2.00 per unit (not at all an unrealistic figure) and you’re paying commissions of a dollar per unit to your affiliate fans (customers are paying the shipping and handling) your total cost to produce and distribute those 100,000 units would be $300,000.  Subtract $300,000 from $1,000,000 and your profits for the year are $700,000.  Obviously that’s much better than having 1000 fans will spend the $100 every year on their own money on you.

 

I wondered how hard it would be to set up an affiliate Marketing Network so I did a little research.  In its simplest version I suppose you could just ask your fans to advertise your product for you.  To do that all you have to do is create some type of ad for your product along with an embed code with a link back to your product sales page and ask your fans to place the ad on their own blog or website for you.  As an illustration please note this page of ads that I created for the Haynesville movie.  Since I created these ads myself and host them on my website there are no third party fees to pay.  This is obviously the cheapest way to turn your street team into a sales team however there is no real reward for your street team other than the warm fuzzy feeling that comes from promoting your products and you do need to have some kind of online store or distribution service for your products for the ads to link back to.

 

Admittedly, while it would be possible to create your own commissioned sales network entirely by yourself, the day to day operation of it would really be kind of daunting for most people and would eat up a lot of valuable time.  An alternative is to make use of networks that are already set up specifically for this purpose.  I’m going to give you some examples of existing services along with an idea of the cost of each.

 

If you want to keep your costs as low as possible but still have someone else do most of the work then Prostores (an ebay company) may be what you are looking for.  For $59.00 a month you can open a web store and create affiliates who get paid a commission for each sale that they make for you.  Prostores does all the hard stuff like creating a unique link for each affiliate for free (I know a filmmaker who is paying $180 to his distribution provider for EACH unique affiliate link they create for him!), monitoring sales and even distributing commission payments through Paypal.  Like Ebay, Prostores can figure out the sales tax and shipping and handling for each product so all you have to do is mail out the products each day.  If you have an eBay seller account you can even link your Prostore to it and have your products listed in front of ebay’s huge consumer market as well.  I like the potential of this concept enough that I got my own Prostores account to test this out.  This is probably the second cheapest way to go.  You pay a fixed monthly fee to have the store with affiliates and you decide on the commission amount.

 

Another obvious resource is Amazon .Com through their CreateSpace service. Amazon does pretty much everything for you that you would need done.  They manufacture your product, add it to their huge catalog, distribute it to your customers and, your fans can get affiliate accounts through Amazon and earn a 10% commission on sales they make.  Amazon provides the ads, collects the money and pays the commission’s out of their own percentage of the product’s price.  I think that Amazon is a great solution for independent artists for many many reasons which I will go into in greater depth in future blogs.  One thing that Amazon doesn’t do, just like every other similar site out there, is promote your products and that is something that you really, really need to remember.

 

The last example I’m going to give you is something I hadn’t even thought about before I started researching the potential of affiliate sales.  Have you ever seen any of the Internet riches infomercials on television which promise to show people how to get rich by selling stuff on the web?  I’d never really given serious thought to those kinds of services before but when you think about it they have to get products from somewhere to advertise don’t they?  As it turns out I found one of them, Pay Dot Com that is looking for products for their network of sales associates (all 400,000 of them) to sell.

 

Their pitch:

“Sell your products and services through our online marketplace, and let PayDotCom take care of the rest. All while getting paid instantly to your PayPal account. Get an army of affiliates selling your product and getting you massive website traffic.”

“No Waiting 30 Days to Get Paid: With our patent pending service, you can now get paid instantly to your favorite payment processor like PayPal account.”

 

One nice thing about the kind of service is that it doesn’t limit you to affiliates that you create from your own fan base.  The service charges a one-time $29.00 activation fee and per sale fees on top of the commission that you pay to the associates. According to the page on their website which describes their fees they go on a sort of sliding scale based on price and on a $10.00 DVD or CD the fee would probably be about dollar.  That really doesn’t seem too bad considering everything you get for the price.

 

So there you have it, an entirely new way for the indie film/music community to market their products.  It’s kinda weird that, will all of the people out there selling all kinds of different ways for independent artists to sell their products,  no one is focusing on this concept especially since it’s already available and fully developed.  I guess it’s just that no one has applied it be independent music and film industry.  Until now…

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