5 Reasons Audiences Want A Virtual Tip Jar

It's been a rough couple of years for live musicians - festivals, events, and shows were canceled left and right. To boot, for any performer lucky enough to get booked, or those who took to live streaming, if you didn't have a virtual tip jar, then you probably noticed a big drop-off in tips.

As life wasn’t already tough for musicians - between crazy schedules and the impact that already has on daily life and relationships, throw in a pandemic and the tip jar can look and feel emptier than ever.

You can blame the pandemic - but the truth is music fans wanted a virtual tip jar even before the start of Covid-19. 2020 simply sped up the timeline for ditching cash and switching to cards and contactless payments.

You can read a million articles about tip jars - how to strategically place them, crafting ideas that let your inner-Etsy shine through, and we've even written articles that dabble in the old tip jar.

But when it comes to virtual tip jars, nobody has distilled the real reason a musician must have one - until now. We are going to focus on the audience, that is, your music fans, and how they support the adoption of a virtual tip jar.

Below you will find 5 stats you need to know about your audience as it relates to cash, and why you need a virtual tip jar.

First Things First

What is a virtual tip jar?

A virtual tip jar (sometimes referred to as an online tip jar) is a platform where fans can leave tips for their favorite musicians - and musicians can receive tips in real-time. I know, quite the inventive name, right?

There are quite a few options out there, but most are simply transactional. We'll talk about the best option for musicians in a bit.

How did we get this info?

We threw on our bifocals, grabbed our abacus, and combed consumer surveys to get to the truth about cash tips. We figured statistics wasn't your favorite subject, so we took one for the team.

Covid-19 completely disrupted cash circulation and shifted purchase behaviors and spending habits. Including a poll of 2,000 adults in the US by Travis Credit Union.

Alright, with that out of the way - here's what you need to know.

1. Nobody Carries Cash All the Time

Here's a big fact in a small number - only 16% of Americans always carry cash.

And yet 20% of Americans "rarely" or "never" carry cash.

Carrying cash was well in decline before the pandemic, but now it's just been accelerated by the pandemic.

Just to let this sink in a bit, imagine the visual below represents your audience of 100 people on a Friday night. This crowd is vibing to your band. Each of them loves to support musicians and decides to show their appreciation.

If you have a physical tip jar, only 16 of them will be able to throw some cash your way. You can almost be certain that 20 of them won't be able to give you cash - and you will just get a pat on the back as their show of support.

Ok, so I've taken some liberties here with the story, but there's a lot more to tip jars than just opening a guitar case and placing it at your feet.

Also, if you aren’t asking for tips at your shows - you’re really missing out. If you need help on how to ask for tips - we’ve got you covered with some ideas for doing so directly, or indirectly.

If you need general help on just how to speak to your audience and what to say and when to say it, including asking for tips, we’ve got that covered for you as well.

2. Cash is Generational

Everyone sit down for this next fact... the younger a person is, the less likely they are to carry cash. Younger generations are also more likely to use contactless payments.

I know - what a shocker. But at least your assumption is now rooted in fact.

Millennials don't carry cash

As someone on the high end of the millennial age range - when I'm not using my phone to pay, I use a credit card for nearly every transaction. Come to think of it, my wallet doesn't even have a place for paper bills - only slots for credit cards.

Take into account music venues or types of events you're playing at - for instance, if you're playing on a college campus, virtual tipping is critical. I'd even argue that if you're playing to an older audience you'll want to have an online tip jar since over 40% of them won't have cash on hand.

3. Their Cash Isn't For You

This one sets the tone on why you need to go digital with your tips. For people who carry cash, the majority of them have it for emergencies or small purchases.

Only 10% of people that carry cash, plan to use it for tips

In other words, if people are choosing whether to give you a $5 bill or keep the cash because of an emergency/buy a King Size Snicker's, you're going to lose that battle almost every time.

4. Given the Choice, They Wouldn't Choose Cash

The vast majority don't want to use cash - regardless of what the expense is. That includes nearly 60% of people who prefer to use debit or credit. The most revealing part of this specific stat is why people choose to use plastic over paper.

It's all about convenience

Over 50% of people that use a card cite ease and convenience as their motivation. If the majority of people would rather tap their card or phone to pay, it only makes sense that you as a musician tap into that for your tips.

5. People Are Quitting Cash

58% of consumers plan to stop using cash completely after Covid-19. This shouldn't come as a surprise after Covid-19. We all spent so much time away from cash, forced to adopt new ways to transact, that many of us have gotten used to the convenience and hygiene of contactless payments.

If you love your pickle jar and have invested hours into decorating it, no worries. Don't toss it out. I'm simply suggesting that you should add a virtual tip jar to your lineup.

If you're hesitant about bringing your tip jars into the 21st century, let me put some concerns to rest.

The Silver Lining to An Online Tip Jar

Your band gets a bigger bump in tips while improving your fan experience. Can cash say the same? Here's what we mean exactly.

Increased tips

A virtual tip jar allows your fans to donate money with the touch of a button, no matter where they are in the world. And when people do carry cash they will typically spend less - according to the smart folks at MIT, consumers are willing to pay 83% more when using a credit card vs. cash.

Non-cash transactions remove the mental barrier of spend, typically leading to a higher payout.

Convenience for fans

With a virtual tip jar, your fans can donate money quickly and easily without having to carry any cash on them. For live streams, what are your options anyways?

If it's an in-person performance, your fans no longer have to leave their seats or table. And who doesn't like to be lazy?

If someone did want to tip you, but didn't have cash - they would have to go to an ATM most likely - which is the absolute worst chore at a show. Oh and by the way, ATM use is down 32% as of 2020.

Track donations

With SongMe you can track how much money you are making in tips and see which songs or performances are generating the most donations. Great for those who want to nerd out on the data.

You can even see the first name of who donated. This is important because now you can give a quick shout-out to your top tippers, which we all know leads to more tips.

Increased reach

A virtual tip jar also allows you to connect with fans who may not be able to physically attend your performances. This means that no matter where in the world your fans are, they can still support you and your music.

What are your options?

I'm sure you know about Venmo and Paypal - and while they are tip solutions, they weren't built for musicians. For an artist, they are too transactional. It's more than just receiving some cash. You need something that builds a relationship.

That's where SongMe comes in.

SongMe is an app that acts as your virtual tip jar for any show - and then some. You can promote your music, interact with fans during your show, and get extra support as well. It's a free online tool/app for musicians, their fans, and venues. Here's the skinny.

Promote your music and shows

Use the app to share your music catalog and your schedule - your fans can follow you on the app and see when and where to catch your show.

Fans engage with their favorite artists

Any fan can jump into the app and check out what's in the playlist, make their own requests (and add a tip onto the request) right from your catalog - all in real-time.

Thank you very much for the tip

You can choose to accept or decline the request in the app - choose to accept and the tip money teleports right into your account. If the request is for "Sweet Home Alabama" and you've already played it 5 times that night, simply decline the request.

Use the data

You have access to all the data from every show - you can see what was requested - what was accepted, declined - and start to look for patterns and trends to improve your show, fan engagement, and ultimately build up that virtual tip jar of yours.

We know it's challenging to earn as a musician - make it easier on yourself by making it easier on your fans.