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Business Truth: A successful business provides a product or service that satisfies a customer need.

The above goes for cars, therapy, food, coffee, accounting, chocolate, but also for concert tickets and recorded music. If customers don’t need or desire your product, you don’t have a viable business model. Ikea fulfills a need for cheap furniture of reasonable quality. Whole Foods fulfills a need for upscale priced organic food. Louis Vuitton fulfills a need for durable, fashionable bags that signal wealth. These companies know who their customers are, what their needs are, and how to satisfy them. An artist can approach their business model, and their ability to pay rent by creating art, in the same way by asking these few basic but important questions:

1. Who are my customers?
2. What are my customer’s needs?
3. Which products or services do I provide to fulfill that need?

Who Are My Customers?

Artists serve two broad categories of customers: individuals and corporations. Individual customers consume music-related products for private purposes and range from dedicated fans buying albums and attending concerts, to accidental consumers that come across your music on the radio or at a bar. There are many different kinds of individual customers, more on that here, and in a future post. Corporate customers purchase or license an artist’s products somewhere in their value chain. This can range from a movie production house, to retail chains playing music overhead, to advertising agencies, and more. We’ll focus on individual customers for now, and speak on corporate customers in a future article.

What Are My Customer’s Needs?

At the core, the most basic and powerful need an artist can satisfy for individual customer revolves around the powerful concepts of belonging, esteem and self actualization. Music can help, heal and remind people they are not alone, and belong to a bigger group with shared experiences: the human race. Music can also entertain, lighten up your day and make you feel better about yourself or your situation. This may sound pompous or grandiose, but think about it. Regardless of genre, age, ethnicity, location and any other distinguishing factors between humans, music has always had this function. It can be a Ryan Adams song that helps you feel better about your break up (belonging, esteem), a Lady GaGa concert where you have fun and dance with your friends (belonging), a Public Enemy album that helps you relate to social injustice (self-actualization, education, belonging), or a Dave Matthew Band concert where you miss half the show because you’re having fun tailgating. Whether you write and perform party music, or socially conscious Hip Hop, Be-Bop, or sad singer-songwriter break-up songs, you have the power to touch and connect people, to set and change the mood, and that’s pretty amazing. The better you fulfill these needs, the more successful you will be, and the more people you will touch. Note that success is a self-defined fluid concept. It can mean being John Mayer big, or being able to play your favorite local place weekly to 50 friends.

In this light, being a successful artist is a win-win situation with your customers, and one that removes any stigma associated with making money by creating art. There is no such thing as selling out, just good and bad ways to fulfill your customer’s needs. Every opportunity that presents itself can be analyzed this way. Just ask yourself if an opportunity will strengthen or weaken your relationship with your fans. It will be different for each artist, depending on where you position yourself in the spectrum of transaction-driven vs. relationship-driven artists. More on this in a previous article, “What Kind Of Artist Are You?”.

A transaction-driven group like the Black Eyed Peas can have corporate sponsorships with dozens of companies without compromising their brand or alienating their fans. For their customers it won’t affect the way the Black Eyed Peas satisfy their need for entertainment. For a relationship-driven artist like Dave Matthews the same kind of deal could possibly achieve the opposite, alienating their fans and confusing the bond they’ve established over the years.

Using heavy-handed words like belonging or esteem shouldn’t create the impression that all music purchased or consumed is supposed to be proof of a meaningful relationship between artist and customer, or that each song will make a customer feel better about himself. While belonging and esteem can refer to that, most of the time they refer to meaningful experiences and relationships for the customer and whatever group of people she identifies with, with music providing the social context and glue. It’s not about you, it’s about them. Pop charts are full of songs by one hit wonders and transaction-driven artists alike. For the most part, Ke$ha’s “Tik Tok” doesn’t create a bond between Ke$ha and her listeners. It creates a bond between her customers that have fun dancing to it in their bedroom or covering it for a self-created YouTube video. And that’s what music is about.

In our next article we’ll address the third question: “Which products or services do I provide to fulfill that need?”

(This is the second part in an on-going series of articles written together with McKinsey & Co’s Erik Rutten*. Through regular brainstorms we will examining the music industry starting from an outsider’s perspective as business men and music lovers, and working our way through the different aspects during the next six weeks. *Erik is on sabbatical and the views expressed are his own, not his employer’s.)