Everyone loves music, and there's no denying its ability to excite the senses. Luckily for marketers, now more than ever they can inject the power of music to fuel incentive programs and other promotions.

OVERVIEW

If you're trying to connect with your customers in an exciting way, music just might get them to tune in to your message. More than any other promotional item, it has the ability to connect with consumers on a personal level.

That's the main reason marketers like this medium. Whether they choose an exclusive CD compilation, a gift certificate program, or tunes legally downloaded from the Internet, they're trying new ways to cash in on music's appeal. As a result, more and more companies are discovering how they can use music effectively as a promotional tool to:

• Recognize employees
• Increase sales
• Reward customers
• Introduce new products
• Enhance brand image
• Promote events

MUSIC'S GROWING POPULARITY

There's no denying the popularity of music. According to data from the Recording Industry Association of America (RIAA), the market for recorded music in the U.S. reached $14.3 billion at the end of 2000. Hilary Rosen, CEO of RIAA, says, "Music is a better value than ever in economic times like these. Music fans know that they can get years of enjoyment from a CD. Because of this, music makes a great gift or incentive." RIAA studies reveal that:

• 60 percent of consumers see music CDs as an excellent or good value for the money. Thus marketers who use CDs can be assured that their incentives have high perceived value.
  
  
• Although listening to music is important to all consumers, it's more important to women than men, and it's especially important to younger women.

IT'S A HIT ON THE INTERNET

A study conducted in May 2001 by Jupiter Media Metrix determined the top Internet entertainment sites. The top three were:

• WindowsMedia.com
• BMGMusicService.com
• CDNow.com

Contributing to the growing popularity of music is the proliferation of modern sound systems, such as home theater systems and portable CD players, not to mention the prevalence of CD players in home and office computers. A relatively new product, the CD burner, has enhanced the importance of music in all demographic groups.

Clearly, marketers who overlook music when they plan their promotions are missing a good bet.

THE POWER OF MUSIC

Here are the chief reasons marketers are incorporating music in incentive programs and other promotions:

It's versatile. Larry Karpen, director of marketing for BMG Special Products in New York City, notes that "music can be used anywhere to promote just about any product or program to any demographic [group]. With so many genres to choose from, including rock, country, dance, hip-hop, and jazz, marketers are always guaranteed to find music to excite their target market. And there are no worries about sizes, fit, or colors, because music fits everyone."

High perceived value. Larry Anderson, vice president of marketing for San Diego-based Network Music, says "CDs can be created for as little as $3 each, yet recipients perceive the value to be in the $12 to $18 range."

It creates an emotional connection with customers. Unlike mugs and baseball caps, people identify closely with music. A certain song, for example, can evoke pleasant memories that help create a halo for the sponsor of a brand. "Everyone can name the type of music they like, but ask them what their favorite kind of umbrella is and they give you a blank stare," says Karpen. "Music touches the soul and carries the spirit. It's a source of inspiration and reflection."

It's a powerful motivator. Just turn on the radio or TV or go to a movie. Music is everywhere. Why? Because it ties into everyday life. Music is the one thing people want more of. When you bring music and entertainment into your promotional plans you add a powerful element for reaching your objectives, whether it's driving store traffic, selling more products, rewarding employees, or establishing a bond with customers. Says Anderson, "Music lets you touch a target audience in a way other premiums can't."

There are myriad ways music can be injected into a promotional or incentive program to help drive excitement and achieve objectives. The following six sections provide a sampling of how companies have used music successfully.

EMPLOYEE RECOGNITION

The popularity and flexibility of music make it a natural for employee recognition and incentive programs. Awarding gift certificates for free CDs and cassettes is a great way to use music for recognition. With BMG Special Products' Music Awards program, for example, recipients are given gift certificates allowing them to choose from a catalog of 900 titles in more than 20 musical genres, including rock, pop, country, jazz, and hip-hop. Redemption is through the mail or via the Internet (for a demonstration, go to http://www.redeem4music.com/sample).

Music Awards, which offers three levels (Gold, Platinum, and Double Platinum), is a turnkey program that includes gift cards, reply envelopes, online access codes, product fulfillment, shipping, and customer service. All elements, including Web sites, catalogs, gift cards, and certificates, can be branded with a corporate logo or other customized communications.

BUILDING SALES

• Kellogg USA Inc. was interested in a promotion that would get consumers excited about several brands of its cereals. The company created a three-volume set of country music CDs (BMG handled one-third of the compilations) entitled "Driving 'Em Crazy." The CDs featured music from such stars as Martina McBride, Pam Tillis, and 3 of Hearts. Millions of CDs were produced for the program. More than 40 million boxes of Kellogg's Raisin Bran, Corn Flakes, Honey Crunch Corn Flakes, Mini Wheat, and Crispex featured a mail-in offer for the CD compilations. To support the promotion, the cereal giant ran a national ad campaign using radio spots and freestanding inserts in newspapers.
  
  
• Music provided the perfect tie-in for AIWA stereo systems. To help generate incremental sales and create a competitive advantage at the point of sale, AIWA offered free CDs via BMG Special Product's Music Awards gift certificate program to purchasers of selected mini-shelf stereo systems. AIWA used store circulars and in-store signage to generate excitement and drive sales. The program was a success, with over 200,000 certificates circulated. The impact on sales and response from consumers was so great that AIWA immediately planned another music premium program.

REWARDS FOR CUSTOMERS

Sears and Levi Strauss teamed up to offer customers the opportunity to get a piece of RCA/BMG recording star Christina Aguilera. The promotion was designed to electrify younger shoppers and reward them for purchasing Levi's jeans at participating Sears locations. Three enhanced CDs were available for $1.99 with a $35 purchase of Levi's merchandise. Each contained a hit single from Christina and a song by an emerging artist, as well as such features as video enhancements, game pieces, and links to the Web sites of Sears, Levi's, and the artists. Special codes provided access to online chats with Christina.

INTRODUCING NEW PRODUCTS

• When the Donna Karan Co. created its new perfume, Chaos, it turned to music to help launch the product. The scent was developed to appeal to high-end, fashion-conscious shoppers, so everything from pricing to packaging was tailored to create a mood of exclusivity. Distribution was through department and specialty stores, and a CD was created to reinforce the exclusive mood. The album, entitled "Pure Calm," was used as a gift-with-purchase. It featured 10 selections from the BMG/Windham Hill record label and included such artists as Mark Isham, David Arkenstone, and Uman. Retailers reported strong sales and credited the CD promotion for the successful launch.
  
  
• Hoechst Marion Roussel was looking for a way to establish instant brand recognition for its new logo when it introduced the allergy medication, Allegra. It came up with a four-CD collection from Network Music, using music that would appeal to doctors and packaging that mimicked the drug's introduction campaign. The promotion gave sales representatives an opportunity to return to doctors' offices several times to deliver more information about the medication along with another album in the series.

STRENGTHENING BRAND IMAGE

Music can be used to strengthen any brand image, and it has proven especially effective for retailers. An exclusive CD can be developed that's offered for retail sale and, more important, is played in the store to enhance the shopping experience. The music can be selected with a specific target audience in mind. Starbucks has used exclusive CDs for years to enhance its image, using more than 20 different CDs ranging from opera and jazz to swing and blues. Other companies that use exclusive CDs are Banana Republic, Brooks Brothers, Pottery Barn, American Eagle Outfitters, and The Gap.

PROMOTING EVENTS

CDs are perfect for invitations, goodie bag gifts, or trade show giveaways. Drawing on all genres of music, Network Music has over 200 titles that can be branded (including a corporate message printed on the CD package) and delivered in two weeks. The minimum order is just 50 CDs. Network Music's Anderson offers these tips on using music to promote an event:

• Target your audience. Select music and cover art that will connect with your audience and communicate your message;
  
  
• To attract prospects, offer a free CD in pre-event mailers, ads, door hangers, and inserts;
  
  
• Order extra units to be used as a follow-up for prospects and customers who may have missed the event.

According to Anderson, Pepcid AC used a CD straight from Network Music's catalog when it exhibited at a convention in New Orleans. Pepcid's goal: to drive traffic to its booth, educate attendees, and increase brand awareness. The CD, entitled "Music of the Big Easy," contained such hot-and-spicy numbers as "Basin Street Blues," "When the Saints Go Marching In," and "Louisiana Twilight." The CD was so successful that the Pepcid team used another CD, "Salsa Music," for its next event. By tying hot music selections to the antacid's spicy food campaign again, the company avoided having to create a custom compilation or commission new art.

THE ENHANCED CD IS VERSATILE

Enhanced CDs take advantage of the unused space on an audio CD. When played on a typical CD player only the audio portion is heard, but when inserted into a computer's CD-ROM drive a wealth of multimedia content becomes available for interactive use. These multimedia items can run the gamut from interactive catalogs to videos, interviews, or even games showcasing your products. Enhanced CDs can also be used for market research. For example, a company might offer shoppers a chance to win a $100 gift certificate if they visit the corporate Web site every week and complete a short survey. That gives the company a chance to gather customer data inexpensively.

SELECTING YOUR MUSIC

What music would most appeal to your customers? Suppliers of music premiums, such as BMG Special Products and Network Music, can provide the answer through their artist and repertoire (A&R) departments. These departments are staffed by music experts who have years of record-industry experience working with artists in all music genres.

"The great thing about putting a music promotion together is that you don't need to know about music," says Gary Pacheco, A&R supervisor for BMG Special Products. "We know music and you know your customer. We work with you to identify the perfect songs that will make your target audience respond."

Key fact to remember when choosing music for an exclusive CD: the larger the program and the more units ordered, the greater the chance of securing contemporary hot artists, such as Alicia Keys, Alan Jackson, Christina Aguilera, and Britney Spears.

COSTS

In the vast universe of incentives and premiums, music is a bargain. Costs vary widely, depending on the marketing objective. For example, a promotional music CD can gain a lot of attention for a new product without absorbing a huge percentage of the launch budget.

With most CDs selling for $15 to $18, gift certificate programs deliver a lot of value at low cost. BMG's Karpen says a Gold certificate in the Music Awards program costs $10.50 and is redeemable for one CD or two cassettes.

Pricing for exclusive CDs depends on such elements as the number of songs on the CD, the packaging, and how the CD will be used (gift-with-purchase, purchase-with-purchase, sold at retail). CDs produced for resale are more expensive because of higher licensing costs. That said, the average cost of a 10-song CD in a retail package is $2.50 to $3.50 per unit, with a minimum order of 25,000 units.

Such CDs feature music by original artists and original hits, along with custom artwork and graphics. For smaller quantities, say 50 to 15,000 units, the average cost of a similar 10-song CD might be $6 to $8. They feature well-known music and songs from popular artists, but the selections may not be as current as those in an exclusive compilation.

WEB SITES FOR MUSIC SUPPLIERS

Custom CD Corporation: http://www.customdiscs.com
Network Music: http://www.privatelabelcd.com
EMI-Capitol Music Special Products: http://www.emicapsm.com
Sony Music Special Products: http://www.smsp.com
Universal Music Special Markets: ASSOCIATIONS

Promotion Marketing Association (PMA). Its members are mainly companies dealing in promotion services, sales incentives, and premium merchandise. Other members include advertising agencies and consultants. PMA offers seminars and conventions throughout the year, a membership directory, and legal information services, as well as two newsletters, "The Legal Bulletin" and "Outlook." Call 212-420-1100; fax 212-533-7622; Go to http://www.pmalink.org.

Incentive Marketing Association (IMA). Its mission is to promote high standards of professionalism in the incentive field, create greater corporate awareness of incentives, and help its members prosper in a changing business environment through education, training, and research. Call 630-369-7780. Go to http://www.incentivemarketing.com.

Recording Industry Association of America (RIAA) is the trade group that represents the U.S. recording industry. Its members create, manufacture and distribute approximately 90 percent of all legitimate sound recordings produced and sold in the United States. Issues it is concerned with include freedom of speech, copyrights, licensing and royalties, and piracy. Call 202-775-0101; go to http://www.riaa.com/.

TRADE SHOWS AND SEMINARS

For a list of Industry Events, go to #9510, Calendar of Industry Events.

BOOKS

Advertising and Sales Promotion Strategy, by Gerald J. Tellis, combines strategic and tactical issues with real-world examples of creative campaigns. Available through Amazon, $97.

Promotional Marketing: Ideas & Techniques for Success in Sales Promotion, by William A. Robinson and Christine Hauri, details the challenges of promotional marketing. The last section looks to the future. Available through Amazon.com, $39.95.

Sales Promotion Essentials, by Don E. Schultz, William A. Robinson, and Lisa A. Petrison, provides the basics on how to use 10 major sales promotion techniques. Available through Amazon.com, $17.95.

The Reward Plan Advantage: A Manager's Guide to Improving Business Performance Through People, by Jerry L. McAdams. Provides an authoritative overview of incentive and reward plans, including setting objectives, measures, and assessing your situation. The author describes recognition and group incentive plans, as well as types of awards and implementation. Available through Amazon.com, $36.95.

Secrets of a Successful Recognition System, by Daniel C. Boyle. Based on the importance of thanking employees, the book provides some practical ideas, but its approach seems a bit simplistic. Available through Amazon.com, $20.

PUBLICATIONS

Incentive magazine, monthly, provides information on all aspects of the incentive field, from premiums to travel. Call 212-592-6263; go to http://www.incentivemag.com.

Promo, monthly. Promo defines promotion trends, presents critical "how-to" information and case studies about promotion, and serves as a meeting ground for companies and professionals in the industry. Free for qualified subscribers, or paid subscription is $65 p/year. Visit
http://www.promomagazine.com.

Potentials, monthly, publishes a list of promotion agencies in its Annual Supplier Directory published in December. Call 612-333-0471 or 800-707-7749.

Promotion Finders helps volume users track down promotional products or services; it gets a commission from suppliers if there's a deal. Call 809-725-3355.

ONLINE RESOURCES

Jupiter Media Metrix tracks trends in entertainment on the Internet. Go to http://www.jmm.com.

Media Metrix has statistics on all aspects of online business. Go to http://www.mediametrix.com.

Recording Industry Association of America (RIAA) has a wealth of information about the music business. Its annual study shows sales by year, type of music sold, age of purchaser, gender, and where purchased. The RIAA's data, represents figures from companies that distribute approximately 90 percent of the prerecorded music in the U.S.
Go to http://www.riaa.com/.

RELATED SMN ARTICLES

For more information about sales promotion, see 6040, Entertainment Marketing.