Forecasting a prospective market can be quite tough. Especially if you are a small business that lacks the resources to acquire and use costly third-party database results and analytical software. In some niche markets, data can be even harder to uncover even with these resources at your disposal. For instance, I focus on the drum industry and even though there are a “crap ton of drummer’s out there” –words from an SEO consultant I worked with. It is tough to get empirical evidence on their behaviors. Luckily, I had developed my own forecasting model in grad school and was able to use that when working on my business plan for Spirit and Groove™.
My model follows a four-step process that creates a funnel from a 100% total market through a potential audience to the final stage of prospective buyers. The last step is a calculation I call the “gut metric” that allows me to adjust the data based on a “gut” feeling. Some would argue the use of this step, but I disagree for two reasons.
Number one, data is both qualitative and quantitative. Analytical software rarely includes the qualitative metrics. Algorithms are great, but there is a reason even Google and Facebook continue to seek out ways to model the “human” perspective. Number two, having run my own company, worked for firms of all sizes, and studied the business plans of countless publicly traded brands during my MBA studies, I have a refined understanding of what is actually possible when you have that empirical evidence in your hands and I am able to sift out marketing “pipe-dreams” from that data.
Perhaps the most important, my model aligns with the concept of “underpromise…overdeliver” – a theory I learned with one of the world’s top brands.
While working as a retail specialist and store mentor with Apple, I witnessed firsthand just how powerful this corporate mantra can be. Apple doesn’t simply include it in their employee manual and call it good. No, they drill it into the corporate-wide psyche. As a retail specialist, it is a concept you learn in your initial training before you are introduced to any of their coveted i-products. At Apple, you are taught to always tell the customer their iPhone would be fixed in 30 minutes, even if you are sure it will only take 10. This way, you are able to increase the consumer’s buy-in when you do deliver ahead of schedule, and that is just the tip of their underpromise…overdeliver iceberg.
If you follow the tech giant in the news, especially when earning’s statements come out. You will notice that (somehow) Job’s brainchild regularly outperforms their own corporate estimates. There is no doubt in my mind that part of this phenom lies in a brand-wide “underpromise/overdeliver” mentality.
Business owners and managers often “over-assume” their results will beat expectations. Managers see the glass as half full because their bonuses and growth-potential are directly related to those results. Owners usually adopt the same ideal, but for different reasons. They are emotionally attached to the brand, see things others may not have in their field of vision, and have much more on the line, which forces them to hope for better-than-expected results.
Neither of these are good ways to engage in business. Yes, overhyping serves a purpose in specific sections of the marketing mix. However, overhyping your forecasts with owners can be detrimental. Imagine what an investor would think if you told them you would hit 1,000,000 units sold in the first quarter of 2018, but you only hit half. Now imagine, that happens every quarter. Soon you will lose their confidence…then their support. Now instead, flip the coin. You forecast that you plan to sell 500,000 units in the first quarter of 2018 and you end up selling just over 10% of those figures. To you, it may look like slight gains (maybe even losses, because through your rose colored glasses you were hoping for one-million). However, to that investor you now over-performed. If you continued this method for future quarters and witnessed similar results. Your investor’s confidence would grow exponentially and with that, your opportunity for explosive future growth would be solidified via their willingness to spend more on your ideas.
Remember, the underpromise/overdeliver concept is rooted in marketing and not finance. It is not designed to “cook the books” or to “sell a lemon.” Rather, it is a mantra that your entire team should adopt, so that it will become part of your overall corporate culture and brand. When properly instituted it impacts both sides of the ball. Your customers will constantly be “surprised” by your service while your investors will continue to experience a responsible and growing company worthy of continued investment.
When negotiating, be careful not to go too far. This week, I was negotiating a small sale with someone…. let’s say. Not that experienced in deals. We had both made our demands and concessions and it was clear a balance had been struck. When it came time to close, he made another demand that would have brought us back to square one. I researched my market, my position, and kindly told him of other persons selling a similar item. However, if he still wanted my product. He could get it for market price.
My ultimate position was not enacted due to emotion. Rather, this customer’s final action increased my perceived risk of the deal. The concessions he initially earned, were judged on my risk analysis that he could pony up the funds, close, and wouldn’t return a vintage item that could be harmed with further shipments. Remember, risk is part of the deal. We learn it with car insurance, health care, and mortgages. It should be a part of any decision.
I get a lot of emails every day. I mean – a FREEKIN’ LOT! However, my inbox doesn’t compare with some of the people I work with. Case in point, I was having lunch with a colleague for a major cruise brand and during our hour together, he received 35 emails, a bunch of texts, and a few calls.
It may be difficult to understand just how complex email management can become if you have never worked in an environment based on group decisions with partners in multiple time zones that require written communication to audit deals being made. This is exactly the case for booking agents, concert buyers, and entertainment managers. In our business, the cc (and sometimes bcc) are commonplace, which quickly converts one email into double digit chains plaguing our inboxes.
Of course, there are programs and protocols one can follow to better manage their inbox. However, each of these emails (or at the very least the subject) needs to be read and, if warranted, investigated and responded to.
So, why is this entertainment blogger discussing the woes of our email management. Well, the answer is to help artists looking for work to better communicate with us, so you don’t get lost in the shuffle. Here are a few pieces of advice I want to give.
As an agent, I can attest that most of us are always hungry to find the next great act for our venues. However, that is only a small percentage of our business. The largest chunk of our time is spent putting the deal together and then executing it on show day. A lot of artists feel that the “squeaky wheel will get the grease” and in some instances that is true. However, if the driver can’t hear that squeak. Nobody will be getting to their destination. Follow these steps to increase the probability that we will hear you.
Marx believed that capitalism was purely negative and that it fed the bourgeoisie graciously at the hands of the proletariat. This made sense when he and Engels wrote the Communist Manifesto in 1848. They had yet to see how capitalism would (and continues) to evolve into a driver for social change.
1.1% of United Airlines‘ stock (or $255 million) was lost today, because consumers demanded vengeance due to the Airline’s unacceptable behavior stemming from how they forcefully removed a customer when they overbooked a flight from Chicago to Louisville days before.
Had the government intervened, it would have taken years for this issue to be resolved. Millions would have been spent in lawyer’s fees, regulation changes, committee building, and analysis. However, only a very small percentage would have been paid by the airline in any type of “punitive”damages.
Instead, the company got flogged publicly on social media and lost millions in market cap overnight, which forced the major airline’s hand to “make things right” not just for the man forcefully ejected, but a new breed of consumer. One who demands fair trade coffee, responsibly sourced salmon, and their brethren to fly home without being bloodied by some corporate bully.
Modern day MBA courses spend a lot of time explaining the importance of Corporate Social Responsibility and this is why. Today, the business world moves too fast. One seemingly small error, or worse a hiccup in accepting responsibility and efficiently correcting the wrong, can quickly become a global phenom. And with markets just as fast, that word-of-mouth on crack will transform into social justice.
This is something that Engels and Marx didn’t have to deal with in the late 1800s and while there is still much room for improvement. The proletariat do have a weapon to knock the bourgeoisie off their high horse, which will continue to enhance the capitalist relationship amongst classes.
Spirit and Groove’s Instagram presence is being established as a community of drummers to share their beats, ideas, drum-pinions, and grooves. Check out our recent promotion video.
We do this because: (1) we totally dig drummers and want to spend as much time as we can hanging out with people who are generally more happy than anyone else; (2) it is part of our marketing plan, which is founded on the Connect with Fans + Reason to Buy (CwF + RtB) model.
Nine Inch Nails frontman, Trent Reznor coined the term CwF + RtB during his post Napster career. Like those around him in the music industry, Reznor needed to find ways to create his own stream of revenue without the assistance of major label deal money that had disappeared with the collapse of physical music sales.
CwF + RtB is one of those methodologies that is so simple it is complex (or we make it so). Basically, you build a fan base and then give them reasons to buy into your brand. The math totally makes sense. If you have a loyal fan base of 10,000 fans and you get them to spend $100 per year on your brand. You earn $1,000,000 per year.
I would say $1,000,000 per year is a good chunk of change for any small business and one that is completely reachable if your foundation fanbase is world-wide and within a supportive niche. This is why we chose it for Spirit and Groove.
Plus it is a REALLY cool way to build a company.
I mean, we totally dig this. For the first years of our business we have to concentrate on connecting with, watching, listening, and learning from drummers. For a drummer, what could be better?
So, if you play the drums or like to groove. Connect with @spiritandgroove on Instagram and tag us in your groovy videos. As of the publishing of this blog, we are within 200 followers of hitting 10K on our feed and when we do that, we will celebrate with deals and monthly contests where community involvement will be the key indicator of how many drum tees we give out and whom earns that drumming clothing.