Barter Your Way to Success
(Making money during gloom?)

by Mike (in Tokyo) Rogers
by Mike (in Tokyo) Rogers

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The recent article by Bill Sardi "Small Independent Retailers Have An Opportunity To Capture New Business As Chain Stores Become Insolvent" was excellent. It gave me many good ideas and also motivated me to share with you good folks a specific example of how I implemented one of the ideas that Bill explained as,

"Learn to barter with other businesses. For example, trade a plumber's hours for free pizzas to fix a water leak at the pizza shop. Buy some paint to freshen up the appearance of the waiting room at a dental office and trade a painter's time for free dental services. The business barter exchange idea can help small retailers band together to keep overhead costs low." 

In my case, I guess I call it "Multi-Level Barter." Today, I want to talk specifics about the radio show I produce.  

Many readers probably think that selling advertising on radio is easy. It's not. Free radio may be on its last legs. As I wrote a few years ago, too, satellite radio isn't going to make it either. The penetration of the market by iPods, Podcasts, Internet radio, etc., does not bode well for FM radio. How much longer can Free Radio hang on in this climate when consumers aren't going to be buying new radios while the Internet and other forms of advertising are shown to be cheaper and more effective? If the programming on FM radio is poor and just full of commercials, then who wants to listen to it, when they can hear commercial-free music? 

As I mentioned, I did write about this a few years ago. If free FM radio isn't going to make it unless something drastic is done, then how can satellite radio make it when people also have to fork out money for the device and subscriptions? No way. 

Today's sponsor (client) wants more than just a few seconds announcement on the radio. This is why I came up with a plan a few years ago and have been implementing it successfully since. Here are the specifics on how it works. I hope you can gain ideas from this for your business to help it grow. 

Clients want more for their money. Clients might be interested in the radio, but I have to offer them more; clients want the Internet, print media, events, and most importantly, community and loyalty. Here's how I put these pieces together. 

First off, to build up awareness of the show, we decided to make the best program in Japan; we wanted to make a show that is on par with Jon Stewart's "Daily Show," or David Letterman. This required deep thought and lots of preparation. Our product was also to be different from everyone else’s in one way: we would only play independent and underground music. Now, think about that for a moment: how could a major market morning program, that plays unknown music, beat all the other programs, in ratings? One plays unknowns; the others play the major stars from the major labels? Easy. Imagine if in your town, there were a bunch of chain restaurants like McDonalds, Denny's, Kentucky Fried Chicken, etc, yet there was one mom and pop shop that sold only very delicious food, at a great price, and an experience to boot? If they do it right, they can cut out a niche with a very strong customer base and loyalty. 

We also make pin badges and refrigerator magnets and we have passed out tens of thousands of these. Yes, these cost, but they are very cheap advertising and we make the pin badges ourselves. (If you are a small business and this idea appeals to you, buy this one and make your badges yourself.) We also make added value for our clients by making special buttons with their name on them for our tie-up events and campaigns. The people who wear our badges know, readily, if they meet on the street, they already share a common quality. And for about 13 cents out of pocket costs, I think it's a pretty good deal to have someone walking around town advertising my product for me.  

	Tim Williams barbequing some of the 1000 New Zealand lamb chops (inset) he got for us from Natural Meat Club. Tim also arranged 50 bottles of quality wine to give away to our listeners for our free BBQ. We had over 250 people! Who wouldn’t want free food and drinks? The BBQ was a massive success. Tim provided the goodies, we brought along the people, as well as giving them massive on-air support. Now everyone knows his company name: iwine.jp!)

Secondly, I knew that I had to build a large Internet campaign. But how is that done? Building a site might cost a bit, and, then after it's up, how do I get people to come to it? Google advertising is a waste of money. Nothing beats buzz-style promotion like word of mouth.  So how to build word of mouth? How to create a buzz? Remember, credibility (or in my business, "Street Cred") is hard to get; it's even harder to buy.  

So, I don't want to spend the money, but I want the buzz. So why don't I try to hitch a ride on another Internet buzz? How about creating your own Myspace or Facebook slanted towards your business? In Japan, we use a site called "Mixi" that is like Myspace. Mixi is extremely popular here in Japan while Myspace is not. I knew that if I could grow my Mixi community, I could use that as a carrot to spice up my sales for the radio program. We began doing on-air contests and having free events while sharing (sometimes) the prizes with our Mixi community. For our free concerts, we would allow invitations only to people who were Mixi members. If you didn't sign up for Mixi, you couldn't get in. 

This was a stroke of genius (and pure luck on my part). What happened was the Mixi community members soon realized that these events were "theirs" – outsiders not allowed. These made them feel special, and who doesn't want to feel special? We had picnics, barbecues, concerts, and we gave away presents – everything free just for the Mixi members. Our membership numbers skyrocketed! We have nearly 6,000 members now – in about 2 1/2 years – our new-members numbers grow, on the average, by six new people a day. If we run some kind of campaign, the Mixi membership grows by 100 new people a day. I can't think of any business that couldn't profit by utilizing this sort of method. We then turn this around into a value-added proposition for our valued clients by allowing them to share in the activities and promote at the events – for free! They love it. Who wouldn't?

Now, let me touch upon how we were able to take a terrible economic climate and turn it into another success story that allows us to gain new sponsors, retain them, and build up our fan base (the sponsors' customer base); as well as creating hard-core loyalty at the same time. In the west, free rock concerts happen in the summertime, all the time. This is unheard of in Japan, but we are doing it and aiming to make it a 10,000-person free rock festival by 2011. 

In Japan, if a promoter wants to rent a club for a concert, it would usually cost at least $1,500 a night. The place we use should cost about $2,500. I get it for free. These clubs are seriously hurting for business. Recently they can't even make money on weekends. When people have to pay $25 dollars to get in to see a band, then they are not so willing to spend money on drinks (they’ll buy drinks at the convenience store and drink outside or sneak those drinks inside). The promoter gets to keep the door fee... The clubs are hurting because they have three or four staff and they cannot run a good business on, say, $6,000–8,000 dollars a month, when probably more than half that is rent and the rest is payroll.

The Mugwumps are by far and away the best Punk band in Japan. When they played our first event, they didn’t even have a record out. Since they’ve opened for Snuff and will tour with Lagwagon. I like to think that our events were an important part of their success.

I gave them a good proposition: "You give me the club for free, on a weeknight (when they are absolutely dead, or even closed), and I'll fill it. I will make the concert free entry. The club charges no more than $5.00 a drink and keeps that all as profit." The club accepted the deal on a one-time trial basis. I packed the place with 300 invitations only guests – from the Mixi community – and the club sold more than $3,000 in drinks... Not bad for a Monday night (actually more money than they've been making on Saturdays recently). People will gladly spend for two drinks, if they can get in for free. 

I got the bands to play for free also under a barter agreement: "You guys play for free and I'll play your CD at least once a day, everyday, when I promote the concert on the show." What up-and-coming Indie band wouldn't jump at the chance of getting free airplay on a radio show that averages 1 million listeners a day? 

These concerts and events were a smash success. They've all been booked solid weeks before the events and they are on a weeknight when people have to go to work the next day. That is amazing! The listeners loved it and rushed to join our Mixi community. The Mixi community loved it because we gave all the tickets to their members exclusively. The club loves it and told me we can do it whenever we want to (we're about to do our 5th free concert on December 17th). In fact, several other clubs have found out about this and contacted me. They've offered their clubs for free too if I would do the same for them. The sponsors love it because it is a value-added part of their promotion too as we always announce the sponsors at the shows and tell people to "support the sponsors who support us and make these cool events possible."  

Nieve and Jean Curley backstage at a packed hip hop event. Mark my words, these two are going to be big! Graham Pavey sits to the right.

Other events we've done, on weekends, were family picnics and barbecues. We had 440 people come to a Sunday picnic in June and we had an amazing turnout of 250 plus people for a BBQ on a Saturday (Saturday is a work day for many people in this country). People love community, meeting their favorite radio show hosts (what program host in the world has free picnics, BBQ, or concerts for their fans?). It gives the sponsors a chance to come in direct contact with the people; it gives the people great memories (they take photos right?) and it creates a buzz that runs before, during, and after the event... What's more the post-event buzz just makes the next event more exciting and the buzz just grows and grows. I'd say that at all our events at least 50% of the people are new people who I have never met before. 

Then, when the success of these events and the plan was taking off, I knew I had to add value again by getting a famous magazine involved. I made a barter deal with the biggest English-language magazine in Japan, Metropolis. They get to come on the show once a week, plug their magazine and events, we get free ads; but the best part is that we cooperate with each other to add value for our sponsors! 

The economy is in decline, but we are not. In fact, even though I am not a salesman at that radio station, I was the number-one salesman for two months running (October, November 2008) by bringing in $47,000 of new contracts. Not bad, but we are going to do better. We plan on building such a buzz that sponsors want to stick with us and our loyal fan base, which can be theirs too! This also, in turn, allows us to create a pool of cool sponsors who are into events and an exciting lifestyle.

While many are sitting around us with their hands in their pockets fretting about the economy, this situation allows us to create huge opportunities for ourselves. We need to read books, investigate the climate, get out and meet people; these things help us to create ideas. There's a million and one ways to make money. Your imagination is the ceiling.    

This article was made possible by Tommy Hilfiger, AU, Pirelli Tires, iwine.jp, Viva Macau, Air New Zealand, Terrance Downs Resort, Galactica, and Natural Meat Club. Without these sponsors, I would have never evolved this project into the smash success it has become. So, I'm thinking about my sponsors in everything I do, and about customer satisfaction, over and above the call of duty, because making it today requires no less. You readers should too. I hope this article gives you ideas. Now, go out and make your own luck.

Special thanks to Graham Pavey. Without him, none of this would have happened.

Edited by Robert Klassen.

December 1, 2008

Mike (in Tokyo) Rogers [send him mail] was born and raised in the USA and moved to Japan in 1984. He is the president of a mass-media production company and also runs a talent agency in Japan. He is now the Producer/Director/Co-host of Good Morning Garage, the most popular FM radio morning show in Tokyo. His book, Schizophrenic in Japan, went on sale in 2005.

Copyright © 2008 LewRockwell.com

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