Lisa Roth | Crain's

In this ongoing series, we ask executives, entrepreneurs and business leaders about mistakes that have shaped their business philosophy.

Lisa Roth

Background:  

CMH Label Group began in Los Angeles in 1975, representing country and bluegrass legends and later branching out to include other types of music. Today, CMH has four labels, including "Rockabye Baby!" Launched by Indianapolis native Lisa Roth, "Rockabye Baby!records lullaby versions of songs by modern pop, rock and hip-hop artists ranging from The Beatles to Metallica to Kanye West.

The Mistake: 

Since we were first and foremost a record label that had been around at that time for 30 years—now 40—we distributed and marketed Rockabye Baby! the way we distributed and marketed all our music. You get it everywhere you can, including record stores and mass merchants; push it out into the market and go for the big sales. But very quickly it became apparent that it wasn’t doing as well as I knew it could and should.  

I suggested to the owner of the company that perhaps we find a marketing consultant who knows something about children’s music and get a fresh perspective. What we had been doing with our other music labels worked beautifully and was very successful. For some reason, this wasn’t.  

So I called my cousin—who worked in the entertainment industry—that day and I asked her if she knew any great marketing people. She said she was about to walk into a birthday party for her friend, but she’d get back to me the next day. It so happens that when she walked into the party, she was immediately introduced to her friend’s sister-in-law, who was a marketing consultant who had worked with Mattel and Disney.

We hired her immediately as a consultant. She suggested that to build this brand, we needed to maintain our premium pricing to get upscale boutiques to carry it and that specialty stores and boutiques are going to build Rockabye through word of mouth—they’re going to build the brand alongside of us—and that we can’t continue to sell to discounters or mass merchants because boutiques won’t sign on if the premium pricing is being undercut. This was a huge change for us.  

So we took a chance, scrapped the tried and true and started a big sales effort toward upscale boutiques and specialty stores. [The consultant] suggested we start attending trade shows as exhibitors. We worked on our branding; Rockabye Baby! was really the first music series for us that was also a true brand. And all of a sudden, we weren’t just a music brand anymore, but we were solidly in the baby business. Who’d have thought?—but also not a bad place to be, given the enormous changes we’ve seen in the music business over the past decade. It’s a nice sort of dual market we have. Actually, it became apparent very quickly that the strategy was perfect—boutiques came onboard and sales took off.  

Going for big sales isn’t always the smartest move.

The Lesson:

There were a number of lessons we learned from that. I think what I learned is outsiders can often see things and identify issues where you can’t. So we’re a company that regularly invites outside input.

Something very obvious—you can’t treat all your products and brands the same way. We knew what to do with our other imprints and had great success, but Rockabye Baby! wasn’t thriving.

And this is a very important one: Going for big sales isn’t always the smartest move.  After we changed our sales and distribution strategy, we started turning down a lot of very big accounts who were knocking on our door that would have been attractive to us in the past—they would have made us drool. And it felt a bit intimidating to have to keep looking inward and going, "Is this right for our brand and the strategy that we’ve committed to?’” But intuitively, it made sense and worked out in our favor.  

I think you have to stay lean, mean, and smart, because it doesn’t matter what business you’re in, change is always on the horizon—not just in business, in life—and you have to have your ear to the ground and be quick and flexible when it finally knocks on your door.  

Follow Rockabye Baby! on Twitter at @rockabyebaby.

Pictured: Lisa Roth. | Photo courtesy of CMH Label Group.