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What is a Fan Worth?

New fans are expensive. You have to pay for fliers, press, merch and your songs in addition to social media, email lists, networking, bear costumes, pyrotechnics and everything else.

A super fan that's been digging your music for months is cheap. Send a quick text or email and you have an extra body at a show.

Smart businesses have known forever that it's worth spending money to retain customers. It's about Customer Lifetime Value (CLV), a wonderfully self explanatory business term.

A fan who only buys one ticket to your show has a lifetime value of $10. You're not going to retire on that, but it's appreciated.

Now say this same customer loved your show so much they'll see you whenever you're in town. Assuming you tour the city once a year and you only plan on touring for ten years or so, that same fan's lifetime value shot up $100. Now that's groovy.

It's easy to get caught up in short term thinking, especially in the early stages of a music career when you're making negative dollars. If a fan comes back a show later and wants to return a shirt for whatever reason, it's easy to justify a "No Refunds" policy since you're already behind a couple hundred dollars because of the shirts. They'd be annoyed, walk away, and that would be the end of that. How did this action affect that fan's lifetime value? Will they invest more or less on your band in the future?

However, you can make an arguement against being fan friendly goes like this: You say it's cool to return the shirt. The fan says thanks, but doesn't buy anything else and walks off. It's a monetary loss, sure. And what if everyone did this, you'd be broke!!!

To be fair, some people are just jerks. If bunches of people try gaming your good will, then by all means cut it off. But remember, how you treat your fans affects how they percieve you. Even if they returned the shirt, they still thought highly enough of you to buy it in the first place. It's better to err on the side of being too good to your fans than too tight with finances.

Fans fill up your wallet, not the other way around.

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