Business Lesson & Contest: The 80/20 Rule

Posted by Drew Stoga on October 18, 2011

Today's post comes from GigMasters member and guitarist Steven Greenfield (Riverside, CA). Steven is a long-time veteran of the gigging scene and is currently playing with a number of busy groups including GigMasters dance band Baytown Band (San Clemente, CA). He's spent his life playing and marketing music and now he's sharing some of the many nuggets of wisdom he has picked up along the way.

Steven recently published two books about booking, gigging and music marketing, "The Musician's Resource for Upscale Booking" and "The Musician's Complete Guide to Weddings." He's generously offered free copies of the books to one lucky winner. Details are at the bottom of Steven's post:

Steve Greenfield

Like many of you, the music business has been a big part of my entire adult life. Starting as a guitar teacher, working in a music store, managing the store, playing in successful bands, authoring music business books (www.coverbandbook.com), becoming a sales rep for a major musical instrument manufacturer, and now working in the office of a music manufacturer growing a brand...It’s all been about music. And business.

Working in business has been extremely valuable for my passion of playing music. It has also allowed me to help others become successful in their efforts at making good money playing music.

One fundamental business lesson is the 80/20 rule. All your life you’ve heard of the 80/20 rule. In its simplest form it tells us 20% of people account for 80% of the wealth in the world.

OK, that sounds pretty slick and easy to remember, but what continually amazes me in the business world is how much this ratio really applies. For example:

  • 80% of your profits come from 20% of your customers
  • 80% of your complaints come from 20% of your customers
  • 80% of your profits come from 20% of the time you spend
  • 80% of your sales come from 20% of your products
  • 80% of your sales are made by 20% of your sales staff

It was surprising to me to see how many times this really held true. It holds true in our band business as well:

20% of your marketing efforts yield 80% of the results

Your best, most focused efforts return the best results. A band using a “shotgun” approach to gigs will not get the same results, and will be continually frustrated.

Here are some examples of tightly focused marketing for musicians:

  • A group I know targets Parents Without Partners and other “singles” organizations
  • One group targets auto/motorcycle dealerships, and grand opening events
  • Another group targets 50 and over communities, getting a majority of their annual events
  • One leader targets the costumed residential Christmas caroling business (80% of her annual income!)
  • One band specializes in private country clubs only within a 30 mile radius of home

One musician I met records original new-age CDs. He then travels in a motor home to art fairs all over the country (Florida in the winter, Midwest in the summer). He plays at the shows and sells his CDs. Last we spoke he was averaging $100K a year. Granted that is an extreme example, but he found his niche and made it work.

It is obvious that the nature of the group determines the audience and marketing to a great extent.

However, a “variety” group can gain tremendous benefits by spending a highly focused 20% of their time going targeting one appropriate market niche which has the potential to yield 80% of their business.

The secret is to stay with that niche until you figure out how to make it work

Think of every possible angle you can use to get a foot in the door of that niche. A lot of groups briefly try to become involved with specific market niches, become discouraged, and give up when they do not get an immediate result. Soon another group, better focused and more determined, comes in and snatches that market.

Think about Thomas Edison and the invention of the light bulb. He was tightly focused on the result and determined to succeed even though it took an incredible amount of work. If he had given up, someone else would have come along and figured out how to make it work.

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What unique niches have you discovered? Did you target a specific market to get 80% of your bookings? What efforts did it take to make it work? What is your plan for next year? How do you plan to go after that market niche?

Leave a comment to let me know. I will review all entries up until November 1st and pick a winner to receive their choice of either of my books “Cover Band 101 - The Musician’s Resource For Upscale Bookings” or "Cover Band 101 - The Musician’s Complete Guide to Weddings.”

 

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