My bottom line is this: it was a great day.  We achieved our primary goal with flying colors, which was to have a Broadway conference unlike anything else anyone had ever seen.  The theme (“What’s the Best Broadway Can be in 20 Years?”) was designed to get people thinking big and in broad strokes, and that’s what we got.  I loved, loved, loved the crowd and the energy you all provided through the course of the day, and of course, the speakers and supporting companies were huge heroes in getting this thing off the ground too.

Nevertheless, there were pros and cons to the day.  There were things I loved and things I didn’t exactly totally love, so let’s talk about both.

I loved the speakers.  We asked some really interesting people to do something very difficult, which is to go onstage and try to say something about a world that doesn’t exist yet.  By and large, I thought the content was very good and nicely varied between insiders and outsiders to the topic of Broadway.    Some of the presentations were truly exceptional, and more people will get to enjoy them when they go online later this month.  Next time around, we’ll start earlier and focus even more intensely on identification, selection and curation of outstanding talks from a really wide array of interesting people.  Although this was a big focus this year, we lost some opportunities to have some really interesting people on stage because we didn’t give it enough time, so next time around, that will be different.  I can’t mention any names there, but trust me, it’s a shame we lost a few of our speakers.

I loved the music!

I loved the location.  The New World Stages is an ideal setting for something like this because it’s a top quality performance venue and because the whole place is built with social spaces and functions like ours in mind.  The staff there is absolutely terrific as well.  I read a comment that it was ironic that TEDxBroadway was in an off-Broadway house and speculating that it was a cost issue, but nothing could be further from the truth.  We weren’t doing TEDxBroadwayHouses.  We were doing TEDxBroadway, the neighborhood in Midtown, and that includes all of it.  NWS was our first choice, bar none.

Like I said, I loved the crowd.  Not only was the place  packed, but the energy and appreciation of the crowd was great.  TEDx events aren’t for everyone and they’re not typical conferences.  As a multi-year TED attendee, my goal was to bring as TED-like an experience to this TEDx event as possible, and that’s less about taking on specific issues that are going to help you be 3% more efficient this year and more about broadening minds.  On the whole, I felt the group that gathered really understood and relished that.  I saw a lot of people who are eager to think in terms of designing the future rather than assuming that we’re fated to continuing the present, but with better iPhones.

I loved the coverage of the event.  This thing got talked about everywhere!  We’re delighted by the interest and hope that it translates into more and more people thinking about the issues the event was designed to raise.

I also loved the fact that we’ve got the germ of a community to keep this conversation going in a number of ways.  I can’t say anything much about that right now, but in weeks to come, I hope to.  People have been raising their hands to help since the event, and that’s very exciting.

We had a couple of logistical hitches, but given it was our first time out, I thought we handled them just fine and they didn’t put a major dent in the day.  I also wish we had gotten to show you some of the great TED talks we had chosen, so I’ll post those later in some place where people can see them.

Finally, I loved the amazing work of the people on the Situation Interactive, Davenport and Goldstar teams.  As I said on the stage, everybody working on putting this thing together also has a full-time job, but still managed to deliver a great event that I know is changing perspectives and influencing minds, based on the feedback that I’m getting from all over the place.  There was a ton of work getting this show together, and my metaphorical hat is off to the people who made that happen.

See you in 2013 or sooner!

A Vast Churning River of Hoary Old Cliches

When I do copywriting workshops for arts pros, I always make a point of asking the group this question: “How many of you have ever used the word ‘celebrate’ in a promotional campaign?” And invariably every person in the room raises a hand.

Then I ask: “Would anyone care to describe the strategic thinking that went into choosing the word ‘celebrate’?” And all the hands quickly drop down again.

Yet I press on.

“When you suggest that people celebrate, what exactly are you asking them to do? How does that word work in the message you’re crafting? What happens in the minds of potential patrons who read or hear the word? Can anyone describe a rational causal connection between use of the word ‘celebrate’ and a customer’s impetus to get up off the couch and buy a ticket?”

Of course they can’t. There isn’t a connection. The closest they can come is to say, “It creates a sense of excitement around the product,” which in itself raises a host of interesting questions: “Does it really? How do you know that? On what evidence are you basing that assertion? Who gets excited? Why? And even if they do get excited because you told them to celebrate (which is doubtful), what’s the causal link between the sense of excitement and the thing the customer must do in order for ‘celebrate’ to achieve its intended effect?” And finally, “Did using the word ‘celebrate’ motivate people to buy, or would any similarly upbeat but unintentional copy choice have achieved the same result?”

Crickets…

No, dear friends, “celebrate” is not a strategic messaging choice; it’s fluff. It’s the sort of automatic language arts pros use when we don’t know what else to say or when we haven’t bothered to ask what needs to be said. It’s a benign, innocuous, reasonably friendly but ultimately inane substitute for strategic communication.

And “celebrate” is by no means alone. There are dozens, maybe hundreds of similar expressions and images floating around the arts marketing lexicon. These quaint, comfortable, stale but handy helpmates surface repeatedly in various guises then sink away only to pop up later in someone else’s season campaign. Given how little original material actually makes it into the canon, it’s not entirely unfair to describe the history of arts marketing as a vast churning river of hoary old clichés.

If you’ve ever used an artsy pun, a Shakespeare quote, a shot of a tuxedoed performer, the word “experience” as a directive (i.e. “experience the magic”), the phrase “set against the backdrop” or the word “anniversary” in a marketing campaign, you know exactly what I’m talking about.

“But, Trev, isn’t this what arts marketing is? We’ve always done it this way. We use these words and images because they describe what we’re selling. And don’t we have to be eye-catching — or at least interesting? I mean, is it really so bad to speak a comfortable language that our loyal audiences understand?”

No. Of course not. There’s nothing wrong with using overwrought clichés when they work. Back when there were a lot of people who cared about the arts, they worked very well. It didn’t matter much what we said or if we said it in a frivolous, nonsensical or overly cute, coy, clever way as long as we got the information in front of the right people. For a long time, because it didn’t actually have to sell anything, the language of arts marketing was little more than a stylistic device that was there to get attention or dress up information that people were already prepared to respond to.

The question we have to ask today, though, is what happens when those pre-motivated people die and their heirs aren’t sitting around waiting for the next season brochure? What happens if younger fence-sitting audiences don’t understand the language or, worse, do understand it but think it’s goofy or hopelessly out of touch?

That if the language we choose has to do more than just fluff up the message? What if it has to actually convince people that it’s in their interest to buy the product? Can we really afford to keep repeating the same mindless, non-strategic clichés when they’re at best benign and possibly doing more harm than good?

Believe it or not, it is possible to create messages that contain causal links between the language we speak and the action we want to impel. We can choose words and images that work in specific, predetermined, predictable ways to bring about the results we expect. Businesses do it all the time. If we choose to do so in the arts, we can develop language that motivates non-avid audiences to jump off the fence in our direction.

The fact is, that no matter what industry or group you represent, a lot has changed in the past twenty years—but what if instead of looking 20 years back, we looked 20 years ahead?

That’s exactly what those of us who are organizing the inaugural TEDxBroadway have asked.  With Damian Bazadona of Situation Interactive and Ken Davenport, Broadway producer and entrepreneur, our goal with the daylong conference is to get some of the smartest, most progressive people in and around Broadway to contemplate a single intriguing question:

What’s the best Broadway can be in twenty years?

We’ve drawn in speakers from inside and outside the community to paint a picture of what’s possible and to answer that question through the lens of their expertise  in fields like economics, customer service, architecture, cultural trends, demographics, as well as theatrical production, management and marketing..

As we go through the process of putting this together, we’ve learned some things that could be applied to any industry or group about why it’s useful to look 20 years into the future:

1.  Creating a positive vision prevents just stumbling into the ‘default’ future. As human beings, we assume the future will be pretty much like the present, but with smaller, better iPhones.  We draw a line from past to present and continue it forward.  Is that the future we want?  If not, we’ll need to design a new one.

2.   Anticipate the surprises. Look at the list of big changes at the top of the page.  Most of them were not predicted, but they weren’t exactly hidden either.  You may not be able to identify the next World Wide Web, but thinking about what could disrupt your corner of the world might give you an edge or a head start when that disruption is in its early stages.

3.  Make the future get here sooner. I’ve heard that early cell phone developers were inspired by the “communicator” on Star Trek.  They saw it on the show and asked “how could we make that actually work?” You probably don’t need William Shatner to help your industry or group thinking this way, but who knows?  He might be helpful.

4.  Excite the young and aspiring. Where do the talented, ambitious, interesting people of twenty years from now want to be spending their time?  Thinking big and bold about the future and talking about it in a public forum means they’re more likely to want to go where the action is.  That could be your industry or it could be something else.

5.  Untangle yourself from the problems of the present and see what happens. If history is a predictor, many of today’s headaches will be irrelevant in 20 years.  Sure, they’re be replaced by new ones, but the problems and issues that bedevil the day to day work that goes on in any industry will at least partly be relics of the past.  By tuning into that, It’s possible to put them aside momentarily and get focused on the big stuff, the stuff that wins long term value.

So next time you have the chance, take a day to get your tribe together and think about the world of 2032.  And don’t just think about it: tell the best possible story for your industry or group.

Will it play out that way?  Almost certainly not.  Will it fall short in many important ways from that vision?  That’s just about guaranteed.

On the other hand, some things will be better than you can legitimately hope for, and the plot twists along the way are more likely to work for you than against you… Especially if you spent some time in 2012 thinking about them.

TEDxBroadway is this coming Monday, January 23rd at New World Stages in New York.  You’ve still got time to register so go already!

Last summer, I co-conspired with Ken Davenport and Damian Bazadona to come up with a Broadway conference that would be fundamentally different from others that had come before it.  The first thought we had was that it would be organized as a TEDx event, which means that it’s an independently organized event (by us) licensed by the TED organization that so many of you know and love and of which I have been an active participant for several years now and of which Goldstar is a partner.

We did this because we thought it was important to make the scope of the discussion broad.  Broadway isn’t just an industry that creates and sells theatrical productions; it’s a place, and that place has a lot of stakeholders and has the potential to have a lot of impact.  So our Broadway conference, we decided, wouldn’t be about “Broadway” but about Broadway.

Then we felt we had to ask a specific question that the day would answer.  After some deliberation, it was this:  What is the Best that Broadway Can be in 20 years?  And that is what the day is devoted to talking about.

Why this question?  There are two ways of looking at the future.  The first is that you see the future and a kind of inevitable extension of the present.  It’s the future that feels inevitable, and whether good or bad, is already on the way if you don’t do anything differently.

The second way of looking at the future is to create it the way you want it.  For Broadway, we thought it would be exciting to envision the best possible future as a way of making it possible for people to actually live into that big, bright possibility.  In other words, if you’ve never pictured what great is, how do you expect it to appear?  MLK said “I have a dream” and he described it because he knew that if people could picture something different and better, they might be able to live up to it.

Then we decided that 20 years was the right time frame because it’s difficult to imagine that far out.  As human beings, if we’re asked  to think about the future, we automatically think about 2 or 3 years from now.  Maybe 5.  This allows us to be comfortable with today, but just a little different.  Maybe an iPhone 7 or reality shows about camping and haircutting instead of cooking and singing.

But 20…it literally boggles the mind, and it takes a lot of imagination to think through what might be.  Add to that the near certainty that whatever you’d come up with will be wrong.

And if you disagree, ask yourself how many people were predicting the World Wide Web, the rapid and total end of the Cold War, a 65% drop in violent crime in America, a worldwide war on terrorist organizations, Kim Kardashian and all she represents, and so many other fundamental realities of how we live today.

So we gathered some really interesting people to talk about this subject from a range of angles.  We were especially interested to get people from outside the theatre business who had little or no experience with it, except as a fan or ticket buyer and mix and match those people with other speakers from within the Broadway world.

Randy Weiner, producer of Sleep No More, is going to be talking about creating content that breaks down every imaginable barrier.  Frank Eliason, famously formerly of @comcast cares fame now SVP of Social Media with Citibank and one of the Godfathers of using Twitter for business, is going to talk about what the future is really going to demand of customer service.  Steve Gullans is going to tell us about a distant future in which marketing is more like a disease spreading than it is selling and advertising and what happens when everything around you sees and hears what you say.  Juan Enriquez, a TED talks favorite, will probably freak us all about looking at the big picture economically.

And more.  15 to 20 presenters and performers all together.  All of whom will be answering the same question in different and fascinating ways.

What’s the best Broadway can be in 20 years?

Want to hear what people think about that?  Want to help us answer?

Then I invite you to reserve your get your spot now for TEDxBroadway.  This year, it’s open registration because we want to build a community, but in future years, existing community members will have priority, so get on in there!

It’s going to be a powerful day, and we’d love to have you!

Today, we’re launching the 2011 version, in 16 cities to almost 2,000,000 Goldstar members.  It’s very exciting, and we’re hoping to break the $100k barrier in total funds raised between now and Sunday.

How can you help, you say?

Go to the Thanksgiving Appeal page or just go to the Goldstar web site and select “Thanksgiving Appeal” at the top of the site, where you normally see your city.  Then donate to the organization in your city, or wherever you’d like.

The thing about the holidays is that for the vast majority of us, even in difficult economic times, we get a moment to stop and reflect on the true blessings in our lives: enough to eat, a warm place to sleep, the ability to pursue a career and enjoy some leisure time.  Even when times are hard, most of us still have the luxury of a roof over our heads and a certainty that when we’re hungry, food will be there for us.  More than that, most of us aren’t plagued by things like mental health trouble or drug addiction on top of not having food or shelter.  Can you imagine the feeling of being under a burden like that?

This is the only time in the year Goldstar does something like this, so we go pretty big on it.  If you’re a Goldstar member, you’ll get an email reminder about this later in the week, but why wait?  Go now and spend 5 minutes to help somebody else’s holiday be a little better by supporting one of these great organizations.

And do me a favor: spread the word!  We don’t do this for money or for PR.  We do it just to do it, and if you think this is a good idea, please do pass it along.

Thanks!  Jim

I’m happy to announce TEDxBroadway and invite you to join us in New York City on January 23rd.

Here’s the basic idea: 20 years ago–gasp–was 1992, and if you were to compare Broadway, its environs and the world around us today to the world of 1992, the contrast is pretty startling.  Do we expect more, less or about the same rate of change between now and 2032, which is the same amount of time ahead of us as 1992 is behind us…double gasp.

Well, I’ve never heard any smart money on “less change” so let’s begin to think about that.  Broadway is a place with numerous stakeholders and its vitality have a huge impact not just on theatre or mid-town Manhattan, but on the intellectual life of the country and world.  Many people talk about things that are “wrong” with Broadway and many talk about the things that are “right” with Broadway, but here’s perhaps a more intriguing question:

What’s the BEST it could be?

Ken Davenport, Damian Bazadona and I started talking about how to frame this event, and we decided to challenge the speakers and the group to come up with ideas on multiple fronts for the very best possible outcome.  We may or may not see all of it come to pass, but if you never envision the best, the chance of seeing it happen is pretty close to zero.

So we’re gathering a diverse group of interesting people to think about this from a lot of different perspectives.  Jordan Roth of Jujamcyn Theatres, Bill T. Jones, choreographer and performer, Juan Enriquez, economist and all-purpose genius, Frank Eliason, customer service maven, Patricia Martin, fascinating author, and more.  Even our pal Neil Patrick Harris is doing a presentation on his thoughts, though it will be in video form because he’s filming that day.

A bunch more presenters will be announced, and it’s happening at New World Stages (appropriately enough).  It’s half a jam-packed day, and the ideas are going to be big and provocative, and fun.

The theatre’s not huge, and even though we’ve announced it, we haven’t publicized it much yet.  So get your tickets while it’s easy!  It should be a great day.

Everybody, it seems, has a concert story.  Whether it’s your mud-drenched weekend at Woodstock, camping out all night for Springsteen tickets, or being hypnotized by Skrillex’s beats, you’ve probably got a story too.

The concert industry, though, has changed over the last 10 or 15 years because now they are the main source of revenue for most musicians.

In the past, concerts were little more than promotional appearances for record, tape or CD sales.  Popular artists blew into town, played one under-priced show, which guaranteed a sellout, and created a vacuum of envy among those who couldn’t go.  That in turn, made the unfortunate masses go out and buy those little pieces of plastic or vinyl that enabled them to hear their heroes at least, since they hadn’t been lucky enough to see them in the flesh.

But it’s not like that anymore. Which makes marketing and pricing concerts right critical to the health of the music business overall.

In the early 2000s, people stopped buying those previously lucrative little pieces of plastic and vinyl, or at least, much less than they used to.  From 1999 to 2009, sales of recordings in the United States dropped from a little more than $14 billion to just over $6 billion.

Meanwhile, the concert business grew, according to this Live Nation investor presentation and Pollstar data, from about $1.5 billion in 1999 to almost $5 billion in 2009.  Numbers on this vary from source to source, but the general trend of the 2000′s is clear: recordings plummeted and concerts soared.

This is what I’ve been telling people for years, and it’s attributable to two different but related things: recordings are so cheap to make now that they’re hardly worth paying for, and people place a higher and higher value on authentic live interaction than ever before.  I’ve often told the story of how I paid the same amount of money for a Bruce Springsteen album as I did for a Bruce Springsteen concert ticket in 1985.  Today, the concert ticket would cost many times more than the recording, if I chose (as a good citizen) not to steal it.

Long term, concerts along with all other forms of live entertainment have a bright future—but the concert business as it’s currently done isn’t going to cut it.

Over the past few years ticket prices rose for the reasons I mentioned above—and rightfully so: the live product is the premium product and it had traditionally been underpriced—but the pendulum swung too far in the over-priced direction, especially in concerts, as the acts who were touring stayed pretty much the same.

As late as 2008, the top 10 touring acts were positively jurassic, with an average career launch year of 1986. That’s Hasselhoff in Knight Rider old, not even Hasselhoff in BayWatch old.

And in 2010, that led to a 15% drop in concert sales, which led to wailing and teeth-gnashing.

Although 2011 has picked up some of the losses of last year, there’s still a widespread feeling in concerts that things aren’t on a steady footing.

Why should things feel so shaky when the long-term trend is pointing the right way?  Because the business model of the first decade of this century is dying— because it’s a lousy business model.  Big bucks, big venues, big (old) acts, and high stakes is a loser.  Do you really think Fleetwood Mac is going to be getting $150 a ticket in 2020?

Instead, the concert business needs to rethink itself to capture the favorable long-term shift of consumers wanting to see the live product.

To do this, the business needs to do at least these three things:

First, the business needs to get better at audience development.

Let’s say that you are the manager of a band.  You’ve got at least some faithful fans, and then you’ve got people who don’t care about your band.  You should run your business in a way that not only pleases the faithful, but increases the number of the faithful.  Running a Super Bowl ad for an upcoming performance might sell a few tickets, but the people who buy probably won’t buy again.  Likewise, if your marketing is focused only on the guys and gals who already stand in line on a cold night to see you, you’re probably not in for much growth there either.  Delight and honor the faithful every day, but then look for places where you’re likely to find more people like them and then reach those people with your work.

Fans of a similar band?  People who like skateboarding, are between the ages of 18 and 30 and live in the three markets where most of your fans live?  Friends of your current fans?  All good places to start, but the point is to look for the next ring of faithful fans who just haven’t found you yet.   Today, concert folks seem to act as though audience development happens automatically.

Second, live entertainment venues and promoters have to get much better at yield management.

This is simply the idea that you’ve got to get productivity out of your venues.  Airlines, hotels, telecommunication companies, public transportation systems all use yield management, because they have a resource that costs the same to operate (hotel room, airplane, city bus, telephone line) no matter how many people use it.  The point is to get people using it as much as possible.  In live entertainment, this means getting as much out of each “seat” in a venue as possible.

It’s simple to calculate: just take the total revenue from a given show (or run of shows or tour) and then divide it by the number of  “seats” that could have been sold.  (It doesn’t have to be literal seats; just the number of admissions that could have been sold at maximum.)

Say there’s a show in a 1000 seat auditorium and 600 seats were sold at $50 each.  That $30,000 in ticket sales divided by 1000 seats, leading to a $30 Revenue Per Seat.  Perhaps we should be making more money on the ticket, so let’s imagine raising the price to $60 and selling 425 tickets.  Is this better?

To find out, just calculate the Revenue Per Seat: $60 x 425 is $25,500.  That makes the Revenue Per Seat $25.50, so the price increase didn’t help.

The point is that you can tweak the price table to offer different prices so that you’re getting the best Revenue Per Seat you can.  Raise?  Lower?  Offer more varied prices?  Only Revenue Per Seat can tell you for sure if you’re getting it right—but almost no one in the industry uses this metric, though they could and should.

Third, get better at “curating”

How sad is it that U2 is the number one touring band in 2011?

Bing Crosby wasn’t the top tour when I was in high school in the late 80′s, but that’s the equivalent.  Yes, U2 is great (so was Bing, btw), but people in the concert biz have to find a way to get people interested in a newer, fresher, more varied group of acts if they want to keep the business alive.

Venues bid for the same acts, many of whom are overpriced based on success 10, 20 or even 30 years ago.  It’s not sustainable or even particularly healthy now.

Venues who can choose what acts play in their buildings have an opportunity to connect directly to an audience.  If they’re finding and choosing something distinctive, high-quality, and fun and wrapping it in a great concert-going experience, those venues will succeed and get people coming back just to see what’s happening next.  It works for theatres, sports teams, and performing arts.  It can work for concerts too, but it takes an eye for something special and a willingness to take some risks along the way.

And somebody with a genius eye for the right acts and the right customer experience stands to get rich and famous figuring it out.

If you’re in or want to be in the concert biz, there’s good news and there’s bad news: The bad news is that if you want to keep doing things the way they’ve been done for the last decade or so, you’d better hope Congress finds a way to save Social Security again.  The good news is that the fundamental desire of consumers to go to live events, including different and better music-driven events, is greater than ever, and ripe for change.

Who wants to write that concert story?

This post originally appeared on FastCompany.com

And there are so many games that they’re practically meaningless.

It’s mostly guys dressed in pajamas standing in a field blowing bubbles with their gum, or worse yet, chewing some Red Man.  If you saw a group like this in your local park, you’d assume these were guys doing court ordered community service for various petty crimes.

It’s a 19th century game invented before color print, much less television, radio or the internet.  If you had to wait twenty minutes for something interesting to happen in 1880, you were living in the fast lane, brother.  Bad off-peak college football games get better ratings than baseball on TV these days.  Kids are playing soccer instead of baseball.

Yes, yes, yes.  That’s all true, more or less.  Or at least it’s hard to argue with because the culture has shifted somewhat against baseball.

But were you watching last night?  My facebook feed would indicate that a lot of people not normally baseball-interested were watching, but I’m going to check the ratings to make sure. (UPDATE: the ratings weren’t very good, which is interesting.  I wonder why so many people normally not interested in baseball are talking about this game today.)  I think we had a cultural moment of getting re-acquainted with baseball.  Even one of the millenials who lives in my house couldn’t stop watching, and he’s deeply embedded in the “baseball is boring” crowd.  ”I can’t believe how exciting this is,” were his words, if I recall correctly.

To catch you up if you missed it, the St. Louis Cardinals were down 3 games to 2 behind the Texas Rangers, which meant a loss eliminated the Cardinals and gave the title to the Rangers.  Down 7 to 5 in the bottom of the ninth, the Cardinals miraculously tied it up, then went down 2 runs again in the 10th, tied it in the bottom of the tenth, and then won it in the bottom of the 11th on a solo home run.  Three miracle comebacks in 3 innings.

That’s good drama on any stage.  It’s as if all the effort time that went into the 2500 baseball games this year before now built tension that’s paying off now.  In fact, that’s exactly what it is.  That Wednesday night game between the Padres and the Brewers in July might not mean much by itself, but it adds to the weight of what’s happening in the playoffs.

Will it have a long lasting effect?  Well, I bet tonight’s ratings are huge, but beyond that, America, here’s my three step plan to return to baseball:

1.  You don’t have to watch it on TV during the regular season.  Maybe just put it on in the background, possibly even just stream the audio or turn on your actual radio if you’ve got one.

2.  Go to the games.  Summer without going to a few baseball games is missing something.  Have a dog, have a beverage of your choice, sit in the sun, soak it in.

3. Follow your team in the standings.  You can check in every couple days because there’s always news.  Just keep an eye on the story line.

4.  Watch the playoffs.  This includes the last few games of the playoff race.  This is where it builds in excitement.  Of course, if they expand the playoffs to be more inclusive, this could be weakened considerably, but for now, the playoffs are pretty meaningful.

Sure, baseball is a 19th century game, but in a way, that’s a point in its favor.  It’s a little respite from our century, which, let’s face it, has some work to do before it can seriously be considered for the Century Hall of Fame.

Something interesting happened last night: America was enthralled with a baseball game.  I wonder what will happen next.

Anyway, that and a decade of e-commerce experiences means I can be helpful to merchants who are evaluating whether or not to work with one of the many daily deal providers.  Done right, it can be a very strong marketing tool, and done wrong, it can break a small business.  You’ve probably heard the stories.

Think of it this way.  Daily deal sites are like a band composed of one instrument: a great big bass drum.  It plays one note: loud.  Big email, big discount, potentially big volume sales, for a single day.  Impressive. Powerful.  Strong.

That's one big drum.

But most bands aren’t limited to a single instrument.  And if you’re marketing a business, you probably want different instruments for different moments. Perhaps it’s a “bass drum” moment for you, but maybe it’s not.  Here are some thoughts on both how to figure it out and what to do about it.

First, figure out if the program is going to make you money now, later or never. The idea of daily deals, in the words of Groupon CEO Andrew Mason, is that they don’t make you money right away.  In fact, you might lose money in the short term, but you make it up by increased awareness.  Ok, possibly true, but here’s some simple math to do: if every daily deal you sold were redeemed, how much money would you lose?  To make up for it, how many new customers would you need to get?

For example, suppose you plan to sell 1000 vouchers for buy 1, get one free Giant Cupcakes that normally cost $5 apiece.  The offer is $5 for two cupcakes, normally worth $10.

The $5 from the voucher gets split down the middle between you and the daily deal site, so you collect $2.50.

Making and selling them costs you $6 but that’s normally fine because you charge $10. There’s plenty of profit margin.

But in this case, you still have $6 in costs and the $2.50 in revenue means your net loss per voucher is $3.50.

That’s still ok as long as the new business that comes AFTER your deal is done exceeds the $3500 (1000 vouchers x $3.50 loss each).  Will it?

Keep it simple and estimate what a customer is worth to you in a single year.  In this case, let’s say it’s $15, since you figure most customers buy from you 3 times a year or so and pick up a Giant Cupcake each time.

$3500 divided by $15 is about 230 new customers you’d need to get from this campaign to break even.

Does that seem realistic?  Only you can judge that, but if your analysis told you that you needed 10,000 new customers to break even, I can tell you from here that that’s not going to happen.  In other cases, the deals might make you money now, if you don’t lose any money on the sale.

Either way, you should know if the daily deal is going to make you money now, later or never.

Now and later are both ok.  Never is not.

Second, control the number and timing of the sales. Selling an unlimited number is not usually a good idea because the promotional value of doing one of these doesn’t change all that much whether you sell 300 or 600, but your costs sure do.  The daily deal site may decline your deal altogether if you don’t give them the opportunity to make enough money, and fair enough, but if the value is in the promotion and not the sales, push back on the number you’re offering to the lowest number possible, especially if you’re losing money marginally on each sale.

Another way is to create  rules about when the sales can happen. If you have slow or “shoulder” times for sales, try to create limits on redemption or use of the vouchers.  This helps because most likely, you’ve got fixed costs in staff, rent, etc. that you’re going to be spending anyway, and you might as well put them to use to serve these customers with the vouchers then.

Suppose lunch is a slow part of the day in the cupcake shop.  Maybe your voucher is $5 for a $10 cupcake lunch combo.  You’re slow then anyway because people don’t go to a cupcake shop for lunch, for reasons that I cannot imagine.  Building your lunch business might be great for your bottom line, so it’s easier to justify the short term loss.

Control both the total volume and the timing of your sales and create a compelling offer and a daily deal could be great for you.

Third, negotiate the revenue share.  Hard. The daily deal business has been in a honeymoon period as merchants learn what it is.  During this honeymoon, these sites have collected 50% or sometimes even more of a merchant’s revenue.

For example, if our cupcake baker sold $10 worth of cupcakes for $5, she’d only end up with $2.50, giving the other $2.50 back to the daily deal publisher.

It’s only fair that the daily deal publisher should get paid, but 50% is not written in stone.  Traditionally, sales commissions are much closer to 5 to 15% on sales of retail items.

1-5, not 5-0.

The difference is massive.  Google, recognizing this, asks far, far less of merchants, close to the traditional commission rate for stuff like this.  There are even agents who now work on behalf of merchants to make this part easier.  They’re used to negotiating with these sites, so use them if you can find one to work with you.

In our example, each voucher was losing the baker $3.50, but that’s at 50% rev share.

Taking it down to a more traditional 15% means that the baker is keeping $4.25 instead of $2.50.

The loss  per voucher is just $1.75, and the baker only needs 115 customers or so to break even.  Big difference.

In conclusion, do those three things and you should be fine.  Ignore this stuff, and it’s a  chancier affair.  Don’t expect the daily deal companies to figure this out for you because, although they are flexible and are happy to negotiate, they’re not going to negotiate against themselves.  They assume you’ve done your homework by the time you’re talking to them.

So put that bass drum to work as a highlight of the beautiful symphony your marketing is performing.  That’s so much better than having it shatter your windows and deafen your employees.

In the clip, Linus convinces Sally to wait with him in his pumpkin patch because once a year, the Great Pumpkin visits the “most sincere pumpkin patch” and gives toys and presents to the good little boys and girls there.  Linus is convinced it’s his year because, as he says, “I don’t see how a pumpkin patch could be more sincere than this one.  You can look all around and there’s not a sign of hypocrisy.  Nothing but sincerity as far as the eye can see.”

But, spoiler alert, there’s no such thing as the Great Pumpkin and Sally is ticked: “I was robbed!  I spent the whole night waiting for the Great Pumpkin when I could have been out for tricks or treats….what a fool I was!  I could have had candy apples, and gum, and cookies and money and all sorts of things.”

But Linus is a true believer.  The fact that the Great Pumpkin didn’t come this year simply means that he must be coming very soon, if only his faith is strong, and he re-doubles the sincerity of his pumpkin patch.

The parallels between this little story and the way that many people in the live entertainment business feel about Great Performances is almost uncanny.  There are people who simultaneously feel contempt for commerce, and yet have the nerve to charge people to see their shows.  These people believe, religiously, that “all you need is a great musician/actor/singer/whatever” and that thinking about anything else is corrupt and wrong, and yet when it is proven, again and again, that this isn’t enough, they, like Linus, re-double their belief in the Great Pumpkin.

We don’t need marketing.

We don’t need research.

We don’t need to worry about the customer experience.

We don’t need to know how we’re doing statistically.

We just need a great performance.

Sure, let us know how that works out.

Here’s the deal: you need a great performance, but it’s not necessarily enough.  Without something remarkable on the stage, you’re in trouble, but it’s not enough.  Necessary, but not sufficient.

If you’re not audience oriented in the sense that you’re THINKING ABOUT what people actually might like, it’s not enough.  Steve Jobs, rightly, said that people don’t always know what they want yet, but he didn’t give that to them by producing whatever the first thing was that popped into his head.  He wasn’t self-indulgent.  That’s what people don’t get about the Jobsian philosophy.  He understood the customer better than anybody else.  He didn’t ignore them and just riff.  Far from it.  You could even say he knew them better than they knew themselves.

That, and not just some inherent “greatness” is what made him a great marketer.

This whole line of thought is, plainly, fundamentalism.  It’s a totemic belief that if we’re “true” to something, we’ll be rewarded in an “afterlife” of amazing, unexplained sales and interest.

Let us know how that works out for you.

Yes, the most important thing is the thing on the stage, and it better be good.  But that alone doesn’t guarantee anything.

There are a lot of people who believe that if you’re good enough, you’ll be “discovered” eventually.

Maybe.  Maybe overwhelming talent will get you a modicum of attention, eventually, when you could have done much, much more.  Is your faith in the Great Pumpkin worth that much to you?  Wouldn’t you rather take control of your destiny?

Remember, Halloween only comes once a year, and like Sally, you’ve only got one chance for tricks or treats.