The following came in my e-mail this week. Chuck knows his stuff.
A Blues Band, Elvis, and an Affiliate Program
A number of years ago, I wrote a business plan for a blues band, of which I was the bass player. When I took a job in a community across the country, I re-wrote the plan, wrote some marketing materials which explained the music we played, and started working the plan and seeking bookings for my new band.
I also started interviewing musicians.
A guitarist that seemed to be a good choice told me that I was either trying to scam potential employers, or was an idiot. “You can’t book a band that doesn’t exist,” Jim insisted.
I asked how many gigs he’d been paid for in the last year. “Well,” he said, “I’m still having trouble finding the right musicians.”
“But Jim, you’ve been trying to form your own band and rehearsing with various musicians for… how long,” I asked? “Two years? No kidding? Two years with no pay at all. Do you think that you could learn some classic blues songs if I give you the lead sheets? You already know those songs? Great. Then a couple of run throughs with the rest of the band should be enough to get you comfortable. We have six paying gigs lined up. They pay seventy bucks, each. Wanna play?”
I was reminded of this incident in a conversation with an Elvis fan.
The fan explained Colonel Tom Parker had been charging 50 percent of Elvis’ income for managing the star. The fan believed that the Colonel had taken advantage of Elvis. Apparently its a commonly held belief. “Where would he have been if he hadn’t been lucky enough to hook up with Elvis,” the fan wanted to know?
I know exactly where he’d be.
It helps to understand who Colonel Tom was. The Colonel was born Andreas Cornelius van Kuijk in June of 1909 in Breda, Netherlands, the fifth of eleven children. After graduating from high school, he relocated to the U.S. and volunteered for the U.S. Army. Following his discharge he changed his name to Tom Parker, lived as a hobo, and joined the circus as a carny for Royal Amusement Shows.
In the early 1940s he worked as an ASPCA dog catcher, and pet cemetery proprietor in Tampa, Florida. As a dogcatcher, Parker put his circus training to use. He gathered the pups from several dogs, placed them all with one mother, and called a reporter from the Tribune to report a single dog had just given birth to 21 puppies. Apparently he did this more than once, and got press each time.
His first job as a show business manager began in 1944 when he took over the career of country singer Eddie Arnold. By the end of 1947 Arnold had been number one on the country charts for 53 weeks. When Parker and Arnold separated he began booking country star Hank Snow, taking over as Snow’s manager in 1955. He began hiring a Memphis rocker named Elvis Presley as Snow’s opening act.
Presley was unhappy with the direction of his career.
Presley sought Parker’s advice. Parker told the young Presley he could be a star, if he’d hire the Colonel as his manager. Parker also told Presley it would cost him 50 percent of all future income. They couldn’t sign a contract because Elvis was still represented by a man named Bob Neal. They shook hands, and went without a written contract until Presley died in 1977.
As Presley’s “special advisor” Parker negotiated Elvis’ recording contract with RCA Victor, insisting that Elvis would have final choice of all of the songs on the album. In 1956 Elvis ended his relationship with Neal, and Parker officially became Presley’s personal manager. By the end of their first year together the Wall Street Journal noted that Elvis had grossed $22 million in merchandise sales alone. (Another bit of circus influence, no doubt).
It was Parker who landed Presley in all of those Hal Wallace movies in the 60s. It was Parker who came up with the idea of soundtrack albums from those films, which Elvis fans snapped up as fast as they were released.
When popular music had changed, and the public had seemingly grown tired of Presley, Parker promoted Elvis’ sagging career through the first worldwide performance via satellite. That particular show was seen by one and a half BILLION people in 40 countries, returning Presley’s status as a top concert draw, and keeping him at the top until his death.
So, to answer the fan’s question, where would Parker have been without Elvis? He’d have been taking some other performer to the top.
The Colonel wasn’t lucky to have found Elvis. Elvis was lucky to have found the Colonel.
Let’s change gears for a moment.
Pretend that you’ve been selling your widget for $10 each. Along comes Sammy Salesweasel, who offers you $15 each for all you can supply him with.
Do you care who he’s selling them to? Does it matter how much he sells them for? If he can sell them for $50 each in a new market that he’s developed, doesn’t he deserve the profit? Especially since you’re now even more profitable?
One of my clients sells his service from his web site. He has an “affiliate program,” in which other sites sell his service and keep 65 percent of the revenue. Is this fair? Is it unfair? Are they sales he could have generated on his own?
My client believes 35 percent of sales he’d never have had to be pure profit. By letting the affiliate keep twice as much money as he keeps himself, he gets a highly motivated affiliate selling his service.
So here’s the lesson.
The lesson from the affiliate program, from Elvis’ relationship with the Colonel, and even from Chuck’s blues band is simple: Don’t begrudge the marketer.
The critical question isn’t “what’s my percentage? The question you should be asking is, “What’s my return on investment?”
When you find someone who can make you money, count the dollars deposited into your bank account, the dollars it cost you to produce, and do the math.
Is 85 percent of “not much” better than 50 percent of “a lot?”
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