AmieStreet.com is using a unique pricing model to capitalize on the social aspects of buying music online.

The site—founded in 2006 by three friends just out of college, Elliott Breece, Josh Boltuch and Elias Roman—allows users to essentially set the cost of a song, based on the tune's popularity in the user community.

"Many sites look at music as a transactional, acquisition-based experience, "says Ernan Roman, principal of Ernan Roman Direct Marketing (and father of Elias Roman). "The emotional investment in music for many people is huge and not well understood."

The pricing model is community driven; all songs start at 0 cents and can go to as high as 98 cents, based their number of purchases on Amie Street. Members are awarded with credits for more music when they recommend tracks that go up in price.

The typical user isn't who the young founders expected. They thought their target demographic looked much like them. Instead, the bulk of revenue and page views are generated by 35 to 55 year olds, who want to keep current on music and perhaps share it with their children.

As the site developed, they realized they needed to get a better handle on their target audience and how to best reach them. Dad, Ernan helped Amie Street conduct Voice of Customer research to determine what users wanted from the site and how the site could capitalize on social media.

A general e-newsletter goes out once a week; users receive more customized newsletters per their opt-in preferences only when there is enough good new material to make it useful. Because of the site's content, indie rock fans get newsletters more frequently than country listeners, for example. The increased personalization has increased newsletter-driven sales 75%.

After the Voice of Customer research, the site went through a complete redesign. Interestingly, the response from users was that the original design was too safe. "They didn't want to go too far out, and it ended up being perceived as too conservative," says Ernan. "They played it too straight—the element of fun and excitement didn't exist there yet."

For Amie Street, which received financing from Amazon.com last year, the best promotion has been word-of-mouth plugs on blogs and online sponsorships. An unexpected boost came in the spring, when blogs like The Huffington Post wrote that Ashley Alexander Dupré—the call girl in the Eliot Spitzer scandal—had songs on Amie Street.

On a more "reputable" note, the site sponsored the online premiere of the movie "The Cult of Sincerity" on YouTube, creating a one and half minute pre-roll that ran before the movie, explaining the partnership between the site and the filmmaker.

"On a conversion basis, it is one of our most exciting campaigns," said Elias. " We're seeing member-to-paying customer conversion rates of 40% and the 'Cult of Sincerity' team is getting effective CPMs in the three-digits from the campaign."

The site is also working on a co-promotion for a new album from Tay Zonday, whose "Chocolate Rain" video became a sensation on YouTube, with over 21 million views.

For more on Amie Street, see the June issue of Direct magazine.

Ernan Roman Direct Marketing Conducting ‘Voice of the Customer’ Research

New York , NY, May 7, 2008 — DM Days New York Conference & Expo has a long and respected history.  The Direct Marketing Association (DMA) wanted to ensure that it remains a vibrant and relevant conference for both the loyal marketers who have been attending for years and the new generation of marketers.

DMA could guess the answers — or it could find the real answers from the “voice of the customer.”  DMA chose the latter and partnered with Ernan Roman Direct Marketing, which has conducted over 85 of these specialized, in-depth research efforts.

While the study is not yet complete, recommendations from preliminary findings will already be in place when the 2008 DM Days event gets underway, June 10-12 at the Jacob K. Javits Convention Center in New York.

The research will provide insights and recommendations from the comprehensive interviews, which will be used in developing the 2009 conference.

Ernan Roman, President, Ernan Roman Direct Marketing, has extensive experience with this intensely specialized research.  His marketing consultancy has conducted over 85 VOC research studies for clients such as Microsoft, NBC, IBM, Hewlett-Packard, Reliant Energy, Golden Rule Insurance, Starwood Hotels and Resorts Worldwide (Luxury Collection), and Bio-Rad Laboratories.

According to Ernan Roman, “We develop powerful, customer-driven strategies based on these VOC research insights, which consistently generate significant increases in revenue and customer satisfaction. The strategies we will be developing for DMA based on this research will ensure the continued vibrancy and relevance of DM Days and significantly increase revenue for DMA and a better customer experience for attendees and exhibitors.”

“What’s important about this VOC methodology is not just that they conducted these in-depth interviews, but the business focus of Ernan’s group,” Mark said.  “They will use these customer insights to create powerful marketing strategies to guide us as we move forward.  So it’s not theoretical, it’s practical customer-driven guidelines we will use to benefit future conference attendees and exhibitors.”

For more information or to register to attend DM Days NY, please visit www.dmdays.com.  To link directly to registration, click here.

DMA will provide complimentary DM Days New York registrations for editorial staff of media outlets that cover direct marketing-related topics.  To request press registration, please email DMA at pressregistration@the-dma.org.  For more information about our requirements for press credentials, click here.

About Direct Marketing Association (DMA)

The Direct Marketing Association (www.the-dma.org) is the leading global trade association of businesses and nonprofit organizations using and supporting multichannel direct marketing tools and techniques. DMA advocates standards for responsible marketing, promotes relevance as the key to reaching consumers with desirable offers, and provides cutting-edge research, education, and networking opportunities to improve results throughout the end-to-end direct marketing process. Founded in 1917, DMA today represents nearly 3,600 companies from dozens of vertical industries in the US and 50 other nations, including a majority of the Fortune 100 companies, as well as nonprofit organizations.

In 2007, marketers — commercial and nonprofit — spent $173.2 billion on direct marketing in the United States. Measured against total US sales, these advertising expenditures generated approximately $2.025 trillion in incremental sales. In 2007, direct marketing accounted for 10.2 percent of total US gross domestic product. Also in 2007, there were 1.6 million direct marketing employees in the US. Their collective sales efforts directly supported nearly 9.0 million other jobs, accounting for a total of 10.6 million US jobs.

The Power of Direct: Relevance. Responsibility.  Results.

Click here for additional customer relationship management solutions case studies.

We wish you the best of luck in using the Voice-of-Customer-driven 3-Step Marketing Process to achieve double-digit response.

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