To make it more personal, you record your name and the recipient's on the Call Interactive system. They are spliced into the message that precedes the song. And after the music, you can leave a 20-second greeting. After placing an order, you get to listen to the same clip that the recipient will hear. That costs the company more, because callers are on the phone longer. But, Dan says, "we want customers to think when they hang up, Wow, this is going to be great."
Through the mail, you then get a song list and a membership card. When you call in another order, a computerized touch-tone menu walks you through the process and automatically debits your credit account. It's painless and quick.
Send-a-Song has more than 10,000 card-carrying customers. And since the company has their names and addresses, it mails postcard reminders before holidays. One-shot deals won't suffice; it needs repeat business.
To boost multiple sales, the company sells one song for $9.95 but three for $24.95. "When we raised the price from $6.95, we didn't see a big drop-off," Dan says. "We wanted to set it high enough that this seems really special. A song won't replace a gift, but it's much cheaper than flowers and more convenient than sending a card." Some regulars use the system 3 times a month, but 4-to-6-times-a-year customers are more common. A few Send-a-Song junkies, however, have used the service more than 100 times each.
Where the technology really shines is in delivery. The company guarantees that every song will get through, and it has ways to handle anything from answering machines to busy signals to not-at-homes. The computers in Omaha call repeatedly if necessary, leave instructions for song retrieval on message machines, and even summon the recipient to the phone if someone else answers. Like a voice-mail system, it's all done through touch tones, but live operators assist those with rotary phones.
If a customer needs a song sent immediately, it goes out from Omaha within five minutes. But customers also can have songs sent up to six months later. "That's a neat feature," says venture capitalist Moore. "You can take care of an obligation right away, or you can schedule some things out. A friend of mine programmed in eight different birthdays in advance."
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With all that in place, the challenge now is to generate mass awareness and trials. To accomplish that on a tight budget, the company has devised a three-channeled marketing strategy.
The most important is radio. Working with Cynthia Michel Public Relations, in Hermosa Beach, Calif., the Prices are signing up leading radio stations as partners. In effect, the company licenses the Send-a-Song name to them for nothing, and they in turn advertise the service as if it were their own.
As far as listeners know, it is. Each partner station gets exclusive rights in its broadcast area and its own 800 number linked to Call Interactive. When someone dials in an order, the Omaha system knows instantly which station generated the sale, based on the incoming area code and exchange. The caller hears something like "Welcome to the WXYZ Send-a-Song service."
The stations get paid in two ways. They can take 50% of the first call's price, normally $9.95, with no residuals for subsequent orders. Or they can accept a lower cut up front and pocket maybe 20% of the price of follow-on calls.
This is all done at little out-of-pocket cost to Send-a-Song. And at the rate they're going, the Prices expect to have deals with 100 stations by August. "We anticipate 10 to 20 calls a day from each one," Dan says. "That would be 1,000 to 2,000 daily from radio alone."
Those numbers seem plausible. "This is perfect for radio," says Randi Alderman, director of sales, marketing, and development at WMXV-FM in New York City. "Everyone likes to do dedications, and now they can do their own. I think it's novel enough, and inexpensive enough, that it will really catch on. Everyone here who has sent one has sent around five. And it generates extra revenue for the station."
A second channel involves corporate tie-ins. In a recent deal with Revlon in Dallas, people who bought $20 worth of cosmetics received a free Send-a-Song coupon. That sparked 500 calls. "We'd like to try this in a lot of markets," says Kevin Foster at Newlin. "It's a great corporate promotion."
Local distributorships constitute the third channel. Already there are three, in New York City, Washington, D.C., and Sacramento. "We may start charging for them, but for now they're free," Dan says. "We expect those reps to be as enterprising as possible to stimulate business. They'll work mainly through stores selling flowers, gifts, and cards."
At Call Interactive, a back-end reporting system based on codes tracks the source of all sales, be they from radio or retailers, to ensure accurate payment.
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For now Send-A-Song is like a high-tech factory operating at a small fraction of its capacity. It needs economies of scale in marketing and telecommunications to really thrive. But the biggest hurdle the company must clear to hit projected sales of $22 million in 1994 and $56 million in 1995 is simply getting people to give the service a try.
That could be tough. "If there's a downside," notes investor Gene Jewett, "it's that people don't see the model on this -- it's unique." And at $9.95 a song, it might be too pricey for consumers who, unless they do try the service, won't quite comprehend its appeal.
Somehow, the company needs to reach a critical mass, to get so big so fast that copycats can't easily jump into the market with knockoffs. It has already shut down a California outfit that ripped off the idea. But other competitors, including some big operators, are almost sure to try to enter the business if it looks like a big-time opportunity. The real edge for the Price brothers is that, by being the first players in the field, they can dominate it.
EXECUTIVE SUMMARY
The Send-a-Song Corp., in Vienna, Va.
Concept: By merging computers with voice-processing and telecommunications technology, to build a national company that enables customers to send popular songs as gifts over the phone. As Send-a-Song is the first company in the field, the system is patentable
Projections: A 1993 loss of $275,000 on revenues of $875,000. Revenues rising to $22 million in 1994 and $56 million in 1995, when pretax profits are expected to reach $7.8 million
Hurdles: Generating mass awareness and trials, plus repeat business. Getting quickly to a size that will enable it to withstand major competitive assaults
