Ceators learn an important business lesson from Van Halen, hidden inside the lyrics of JUMP!

(How To *NOT* Disintermediate Yourself From Your Customers)

I got my back against the record machine 🎶

🎶 I ain’t the worst that you’ve seen 🎶

🎶 Ah, can’t you see what I mean? 🎶

🎶 Ah, might as well jump (jump) 🎶

While David Lee Roth tells several versions of where the song “jump” came from, the real theme of the song is how they were stuck in a vicious merry-go-round with their record label, their situation “ain’t the worst that you’ve seen”, with their backs against the wall, or in their case, “against the record machine.”

A machine that grossed WAY MORE PROFIT from Van Halen’s creativity and innovation than the band itself did.

As you read this article, think about this:

Are you building your own brand? Or making someone else rich?

If you were a music🎵 artist who had just signed a big record deal in the 1960s, 70s, or 80s, life probably felt pretty great, for a minute. It was commonplace for musicians and bands to be lured, then held like flies in sticky paper, by a fat, upfront signing bonus. Yet while many young artists were, overnight, living 🤘🏼 rock star lives in the form of huge six figure advances, when the glamorous 🤩 tours ended, they nearly all would discover they were millions of dollars in debt,🤬 and the only way to climb out of debt was to keep producing more albums for their record labels — which were making the lion’s share of all gross revenues.

With their “back against the record machine” Van Halen was forced for five years to keep churning out records to climb out of debt, held hostage to a “hellaciously bad” and watertight contract they had signed as unknowns.

Many acts from this era were in a way renting their brand, but even worse than that, actually signing away incredible portions of the publishing, performance and mechanical rights to the big labels, sacrificing not only future earnings but their ability to maintain their artistic freedom, uniqueness, and individuality.

I see a flavor of this history repeating itself in today’s influencer space — especially in the fitness industry, and I’m compelled to write about it.

It’s all too easy to get bedazzled 🤑 by a large payment. As another song goes “what the big print giveth, the small print taketh away.”😡 When the people and products you’re promoting move on to the next ‘salesperson’ — what do have to show for it? Who wins when you rent out your brand?

When the music stops 🛑 — what have you got left?

Money is great to have. But while social influencer agencies /managers dangle the carrot enticing you to take upfront payments to promote a 3rd party fitness app or do paid posts about the power of the latest, greatest tea cleanse to hit the market, most industry influencers or brand ambassadors don’t stop and think about how that affects their own brand.

That company is piggybacking🐒 on your goodwill. It uses the trust and relationships you have established with your audience❤️ to siphon attention away in order to sell its own product. To the detriment of your brand.

There are a tonne of examples of this, but I can think of one HUGE fitness influencer, with around 8 million followers. Because of his devoted audience and reach he can command $50K for a single post. Now, that’s a lot of money — who couldn’t use a regular $50,000 top-up right? Plus, he’s a magnet for companies with products to sell.

So he’s making good coin posting and promoting someone else’s product — and wondering why his own product sales (you know, the ones labelled with his brand) are taking a hit. When you look at his posts and stories, it goes ‘sponsored post’,🥴 ‘sponsored post’,🤢 ‘sponsored post’ 🤮 and then, 🤑‘hey, take a look at this great product I’ve developed’. And he wonders why his own product sales are falling flat…

His own brand is getting diluted and lost in this barrage of other people’s products. He’s renting his brand to another company, while destroying the value of what he’s created for himself.

I’ve seen several other very popular influencers do something recently that’s even worse… they take the up front payment to send their followers into someone else’s app. 🤦🏼 And while they “share the majority of revenue” earned by their customers signing up in that app and are told by the company that ‘they own their customers’, the reality is that those precious relationships that they spent so long nurturing in social are now inside a 3rd party app, one click away from 250,000 other creators and when the music stops and they want to download those clients’ emails to cross sell…. guess what? They can’t, because legally they don’t own the customer data. Fast forward a few years and these influencers will be left realizing they were the chumps for trading an asset (your customer data) for an up front one-time check followed by some commission payments.

Money up front can be blinding and have a wicked dilution on long term value.

So how do you know if you’re diluting the value of your own brand? Try asking yourself:

1. Are you spending more time sending your audience to a destination that you don’t own? Promoting someone else’s product more than working with your own audience/clientele?

2. Is your customer base and/or engagement declining 〽️ while the brand you’re pushing is growing?

3. Are you making less money from your core fitness business than you are from paid posts, or promoting a 3rd party app (where you don’t own the data)?

4. Are you using the money from paid promos to pay your business bills, rather than money you’re generating through your own clients?

Moral of the story? Sometimes it’s best to say no🚫, and walk away from those up front paid opportunities.

But wait — who can afford to turn down good, legal, easy money? For a business owner, that probably doesn’t seem like a very smart strategy. Why can’t being a successful influencer be a legitimate and profitable arrangement for both parties? Depends how you look at it.

Just like cars, when you rent something over and over, its value goes down. Eventually that shiny rental car is going to be dinged and dented and no-one is going to want it. The way companies treat your brand can be categorized in the same way.

⚠️The danger of renting out your brand: a cautionary tale⚠️

A real life example is that of a well-known bodybuilder and fitness legend, 💪🏾 Flex Wheeler. Arnold Schwarzenegger described him as one of the greatest bodybuilders he’d ever seen. Anyway, I was lucky enough to catch up with this legend two years ago in Las Vegas, weeks before he lost his right leg due to circulatory issues.

About 15 years ago, Flex landed a contract with an unknown name, brand-new supplement company. They offered him big money to be the face of the brand, so for the next decade, he was paid handsomely to travel with them and promote the product. He showed up at every single event they needed him to show up at, and with his influence and reach, this no-name company grew into a multi-hundred-million dollar company. In other words, it’s doing pretty damn well.

However, some months before I saw him, the company told him they’d decided not to renew his long-standing contract. 🤯 He was flabbergasted — after all, he’d been with them since the beginning. All they had to say was that they were (so) big now, they didn’t need him anymore.

And just like that, it was over. He got spat off the carousel.

The lightbulb moment. 🤦🏼♂️ He realized that the whole time he’d been collecting a pay cheque, he’d been helping them build a mega-million dollar business. They were the one with the asset, while he had nothing to show for it, no asset of his own.

And that’s a pretty sobering moment.

Are you just collecting a pay cheque? Are you building your own business or making someone else rich?🤨

Many influencers we work with start out feeling trapped on the gravy train. They say, “A little piece of me dies 😒 every time I have to promote this face cream/protein powder/active wear range. But it’s the only way I know how to make money, or keep money coming in regularly.”

What happened to Van Halen’s hellacious contract?

Among many of the OMGs🤦🏼♂️ of their original contract, one of the clauses allowed the record label to perpetually renew their contract with all original terms from when they were unknowns. As a tactic to distract the label, Noel Monk, Van Halen’s manager, famously became the biggest pain in the ass for the record label, requesting enormous volumes of detailed sales reports, that the label messed up and overlooked their window to renew the contract. At that point they were free agents 🎉 and Monk renegotiated their contract to make them multi-millionaires overnight.🍾 The group would go on to become famous contract negotiators, until their new love for negotiating turned inward with each other and the rest is history. The lesson from this

Back yourself

Look, this isn’t to say that you CAN’T promote other brands; just be vigilant 🤔 of what it is doing to your own brand. Authenticity is the key. If you’ve grown an audience, you’re likely to have done it through delivering truthful, entertaining content that people want to see. That’s why your savvy followers are going to see right through you if you try to whip up interest in a brand that either doesn’t align with your own values, or is something your audience doesn’t care about.💩

The influencer audience is so fluid and fast-moving — and you can only thrive in it if you remain relevant. Here at MacroActive, we’re about creating something long-lasting. A platform to build a legacy on🏆, rather than adopt a churn and ‘burn bright, die young’ approach. It’s not a quick fix, and there’s no magic bullet to business success, but we can help speed up the journey based on having seen what’s worked and what hasn’t for so many others.

We firmly believe that your best path is to invest in yourself. 💯 We don’t want you just collecting a pay cheque, we want you to build your own asset — something that’s going to be worth something when the music stops. 👉 Why not pour your energy into building your own product instead of feathering someone else’s nest?

If you’re relying too heavily on someone else’s product to make your business pay, you’re working for them. And they’re definitely not working for you. So don’t sell yourself short. Don’t sell your credibility to the first bidder. Don’t erode your audience’s trust. Most of all, don’t let yourself get into an agreement that puts your back up against the wall.

Instead, invest in yourself and put your own brand first — that’s how you’ll build sustainable success.📈

- Ken Brickley, CEO, MacroActive

For more information about MacroActive, visit https://www.macroactive.com