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Tuesday, Oct. 16, 2007

Case Study: Karma Police Arrest Radiohead for Leaving Cash on the Table

By Robert Gorell
October 16th, 2007

raadiohead_checkout.jpgHumans are notoriously uptight. One moment we’re seething with anticipation over something that’s sure to be so thoroughly enjoyable that we can’t even picture complaining about it — ever — until the next day or so, when we do. Without warning, people will turn on your brand and tell their friends to do the same. This is why setting expectations online is crucial; something the band brand Radiohead learned the hard way after its novice online marketing efforts managed to disappoint countless enthusiastic customers.

All of this makes for a case study. Persuasion isn’t a problem for this particular brand; they have legions of fans around the world and have tens of millions of records in the past 15 years. Still, e-commerce is new territory for them, so it’s time for a crash course in conversion rate marketing. I’m going to show you how, despite selling a reported 1.2 million downloads before the album was even released, Radiohead left £’s (tons, actually) on the table — most of which could have been recovered with better planning, minimal web copy, and a simpler checkout process.

Web Copy in its Right Place = No Alarms + No Surprises

A couple weeks ago, when the band announced they would release their new album online — through their own shopping cart, letting people pay whatever they like — Radiohead was widely praised by media and fans alike. The move was hugely disruptive (especially coming from such popular act) and record executives at the major record labels were left shaking in their boots as the likes of Madonna, Oasis and Nine Inch Nails dropped their recording contracts in favor of (non-iTunes) online distribution. Although they’re said to have changed the record industry with the move online, the impact would have been far more substantial had Radiohead anticipated fan’s customer’s questions in advance and addressed them with proper web copy.

Of the four dominant personality types, the slower-paced Methodical and Humanistic fans were the worst hit. Methodicals were upset because, since past Radiohead albums had been available at 320 kilobits per second (kbps) — a superior bitrate, twice that of the 160 kbps version they receivedthey assumed they’d be getting the best possible bitrate. Methodicals, and people in methodical mode, don’t like being duped over technical specs. Humanistics, meanwhile, were upset because once their Methodical friends (the detail-focused mavens they are) informed them they were given a second-rate product, and they’re likely thinking this is very “un-Radiohead” of them. This video clip from MTV illustrates the variety of reactions among personality types:

Here’s Radiohead’s In Rainbows website. Although “keeping it minimal” seems to have been a considered design choice, some basic copy at each stage to let people know something, anything about the album would have kept word-of-mouth focused on the you-choose-what-to-pay conversation — or even, say, the album — instead of what they didn’t do. The good news for the band, though, is that if they really did want to start a conversation about what music’s worth (as their guitarist mentioned to Rolling Stone), they’d done an amazing job of it. For instance, PureButtons.com paid $1,000 for the album — but the difference between them and Radiohead is that the button company has its online marketing in order (evidence).

A Fitter, Happier, More Productive Checkout

Before purchasing the album, I wanted to see what my friends in the music biz had to say. For instance, URB Magazine editor Joshua Glazer offered this anecdote:

“Funny thing, I couldn’t be bothered to figure out the shopping cart on Radiohead’s site. I tried to enter something in the ‘amount’ space (or what I think was the amount space) and it stayed blank. It was just too vague, so I still had a friend IM me the MP3s. “

As promised, I bought the album at the full, would-be iTunes price of $9.99 (or £4.90). Josh was right, though. They didn’t exactly make this easy.

radiohead_checkout_02.jpg

Unfortunately, this is all too common. There’s no good reason to ask people to register before checkout. In this situation, all they really need is a name, credit card number, address (to verify credit card), and check-box to agree to terms and conditions, and a button that says something like “Place My Order.” If there’s any registration you’d like to lure people into, they need to know why they should do it. It’s like proposing marriage on the first date. Still, it’s the next step that makes the least sense.

radiohead_checkout_4.jpg

Of course, there were two additional steps. I had to enter my credit card info on the following page, with a confirmation page after that. But all of this could have been handled in two steps had they offered registration as an option on the confirmation page instead of hitting me with this hurdle. Also, it would have been nice to know how many steps there would be. A simple breadcrumb indicator at the top to illustrate the steps (e.g., “Step 2 of 4″ or “Register”) would have been nice, as well. People — especially fast-moving Competitive and Spontaneous types — like to know how long things will take. Nothing bleeds the joy out of music like signing a web form. They could have also made this easier for Competitive and Spontaneous types by adding Google Checkout or PayPal as one-step options.

I did finally receive my digital copy of the album. After a couple of listens, it’s pretty good. Not exactly a departure from what they’ve done over the past five years, but they’ve definitely still got it. I’m not quite sure why people are complaining, either. The sound quality is good enough for me, as was the price.

P.S. — If your b(r)and wants to convert multi-channel to multi-platinum, we can help.

[Hat tip to the Wizard of Ads Group's Tim Miles for linking me to the MTV News story, and reminding us that "you can't outrun word-of-mouth." And, in case you're interested in how the music business shot itself in the foot, leaving room for bands to go it alone online, Don Dodge can tell you all about it.]

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Comments (5)

  1. Personally, I won’t mind receiving a text message from Radiohead. I doubt they’ll abuse it, and maybe they’ll do something really cool like announce pre-sale tickets that way, for the real fans, who figured out the (admittedly a tad cumbersome) process.

    The aspect I find interesting is the credit card fee. If you pay one quid, a third of the price is the fee. Even if you pay ten pounds, you’re still paying nearly 10% of the price to the credit card companies.

    This fee is called the interchange fee, and it’s a source of no small frustration to merchants here in the US. Usually you pay for it in the form of higher fees at the register, but in this case it wasn’t hard for Radiohead to parcel it out (easily done with 2 products for sale). Still annoying. I hope people think about it.

    It annoyed me enough that I’ve been working for a DC group called Merchants Payments Coalition (website linked behind my name) and In Rainbows might be the best thing to happen to this cause.

    But back to your point, what could Radiohead have done better? Offer something like Revolution Money — the interchange-lite new alternative to Visa/MC, which is just getting off the ground. Sure, most people couldn’t use it, but those that could would be glad to. It would save us money, for one thing.

  2. [...] Humans are notoriously uptight. One moment we’re seething with anticipation over something that’ sure to be so thoroughly enjoyable that we can’t even picture complaining about it ever until the next day or so, when we do. Without warning,.Case Study: Karma Police Arrest Multi-Platinum B(r)and for Leaving Cash on the Table [...]

  3. Interrobanger,

    Thank you so much for your response, and for sharing the info about Merchants Payment Coalition. This is a problem faced by a lot of retailers, and certainly something that helps fuel annoyance-turned-resentment by customers. Keep up the good fight! (I also recommend that anyone interested in credit card strong-arming tactics watch this Frontline documentary, “The Secret History of the Credit Card.”)

    Regarding your point about not minding if you get a text message from them every now and then, that’s exactly my point: How do you know what they’re using your information for if they don’t tell you? People will gladly offer up their personal information if they can trust you. A b(r)and like Radiohead has a lot of trust behind it, as fans will pay top dollar to attend one of their concerts. But why should I give them ANY unnecessary info just to get a lousy download? It should be something to opt-in to after checkout. (“Get the cash. Ask questions later.”) That approach isn’t just good for them, it’s good for their customers and/or fans.

    Thom York can croon sardonically about wanting “no alarms and no surprises” but it’s pretty accurate. People tend to hate surprises when it comes to how their money is spent or when, where and how they’ll be contacted.

  4. Robert, thanks. I actually just caught that Frontline special at random the other night. Quite good, and while I can understand why they focused primarily on fees paid by cardholders, I had hoped they would go into my subject a bit more. Credit card rewards come from that fee, and since you have to have good credit to get a reward card, and yet anyone who merely pays cash still contributes toward that (in higher prices, not “fees” as I wrote above) that is effectively transferring wealth from the poor to the rich.

    For the record, I do have a credit card, but only to pay bills and groceries, and I pay down my balance. I only have it to build credit.

    Now, as for the phone number, on second thought, you’re right. They should have made it opt-in. Not very Radiohead to require that (sort of like being not very Smurfy). I do know people who just went to their nearest torrent tracker and obtained the album that way. Sure, I’m curious to see what they send out, but I’m a die-hard. The merely curious will probably find that annoying. However, if I was Yorke & Co. I would put the opt-in before the checkout. You’d still have people’s attention at that point, and if the number wasn’t required, then it would be easy enough to skip.

    Oh, and why not just say “Want to get special offers and news from Radiohead? Let us send you a text message.” Yep — explain it and more people will do it.

  5. You are an Idiot, they are one of the greatest bands ever, and there is absolutely no sense in you flaunting your Bias opinion of a great thing all over the place. They were sick in tired of the record labels skimming most off the top, and after all the dust settled they had a bigger return, then had they physically released their album. U have to register????? OMG???!?! is that it? U MEAN TO pay nothing at all and i have to type in my email twice? jesus christ? lol and as far as the download being 160k? really? listen to two identical music files with different bit rates and if u can tell the difference go fuck yourself cuz ur an idiot…. also the page hard to understand, its all straight to the point its no the fucking “VIDEOPROFESSOR” if u cant figure the website out, then go kill yourself. thank you..

    i appoligize for the harsh language…. also i respect your “opinion” but as Thome Yorke said. “I think if you make good music, then people will pay for it.”

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