What I Learned about Pricing from Taylor Swift
Unless you spent 2014 alone on a deserted island I am sure you have heard mention of Taylor Swift. Perhaps you heard about what an excellent business woman she is or maybe you just heard that she’s a serial dater. Miss Swift’s love life aside, she is a marketing genius and a super savvy businesswoman. When it comes to pricing, 2014 was Taylor’s year to reign as queen in the music industry and we can all learn a valuable lesson from her besides how to make someone your ex.
Remember when T Swift pulled her albums off of Spotify?! The horror! Deciding to go against the grain, Swift made a decision that could have potentially angered her fans and cost her big time but what happened was magical. Taylor Swift actually sold records. In a digitally dominated era musicians are not selling records like they used to. Fans consume music in a totally different way than they did 10 years ago, and artists have succumbed to selling their music for pennies a play to subscription services.
Believe in Your Product
A somewhat common pricing practice in an established market is to price in the ballpark of your competition, a bit higher if you think you are better and slightly lower if you believe you are worse. Swift believed in her product and believed she was providing her fans with something of real value, and she wasn’t going to give that away. Pulling her music off of the free music sharing service, Spotify, actually caused people to go out and pay for her new album.
Swift didn’t just pull her new album either, she isn’t even giving away her old stuff. Remember when she was country? Well if you don’t you’ll have to pay to have a listen because Miss Swift has told her fans that her music is actually worth something, even the old country tunes, and her fans totally agree. Swift’s “1989” album went Platinum (one million copies sold) within one week of being released, making it the first album released in 2014 to achieve that status. Since hitting the mark back in October she has only been joined by 3 other artists.
Capture the Value you are creating
What Taylor Swift did was announce to the world that the demand for music still exists. If you make a good product do not just give it away because that’s what your competition does. If you believe you have a winning product let your customers know that your product is valuable and see if they agree. You might be taking a gamble in your market, but it is far easier to bring prices down than it is to start charging for something that people are used to getting for free.