9-9-2013
The reason we get so many ?chicken poop? orders from local direct clients is because there is a chicken in the room, and it?s not the client.
As a sales rep, you?ve got to ask yourself how you come up with the amount you?re asking your client to spend. What is that amount actually based on? Who really sets the low budget bar? Is it the client, or in reality is it you, the rep, recommending the chicken poop schedule?
I asked a sales rep in a medium-sized market radio to give me a proposal significant enough to help a friend of mine weave his product into the fabric of the format and subsequently into the fabric of the listener?s minds. She sent me a computerized report that suggested 15 commercials every other week. I was surprised and so was the client. Surprised actually, because we had expected her to try to sell us many more commercials. We had also fully expected to be on every week, not just every other week.
Why did the rep just assume that we wanted such a thin schedule when we felt that we had communicated something much larger? She said she had done it to reach a certain frequency goal that she had fixed in her mind. She also indicated that what she was pitching seemed like a big order for her station.
In this case, she was the one with the rate resistance problem, not the client. I wonder just how often that really happens at radio and television stations all over the planet. And how much are we really leaving on the table?
?Shy? budget proposals present a real revenue problem for you and your station. But they also pose a serious problem for the client because they might not get the level of exposure they really need. That, combined with weak copy, causes clients to say they tried broadcast advertising and it ?didn?t work.?
I watch salespeople talk to local direct clients on a regular basis and I see the recommended budgets. They are typically what I would consider low -- in most instances, about two-thirds lower than a client could actually afford, based on his average sale and his gross margin of profit.
Let?s say the client owns a furniture store. The gross margin of profit, after the cost of furniture, runs 40-45 percent. The average sale is $600. So the question is, how many $270s (45 percent of $600) would the store have to sell per $1,000 per week in advertising? The answer would be less than four. Per $5,000 per week spent on your station, the answer would be 18 or so. Per $10,000 you would have to deliver less than 40 new clients per week.
If you CUME say, 50,000 listeners per week, the 40 new customers would represent less than .09 percent of your total audience. .111 percent of your audience would represent 55 furniture customers, each spending $600. If you could attract nine new paying customers per day, Monday-Friday, with a deep-sell commercial and a kick-butt schedule, the client would realize a 49 percent after-advertising cost return on his investment. Not bad. I think I?d take 49 percent on my money any day. Even in a tough economy, that seems like a good calculated risk.
And, what is the value of one new customer that your station could bring to the client over a lifetime? I have spent thousands at my favorite furniture store. I have spent even more at my favorite grocery store. When I smoked cigarettes I dutifully spent at least $7 dollars every single day (smokers don?t take weekends off) at my favorite convenience store.
Gross margins of profit and average sales stay pretty much the same, regardless of whether you?re in a large, medium, or small market. So, don?t be shy in smaller markets about asking for more.
The business person is used to talking big numbers every day, except with you. He or she is routinely making large investments in inventory, materials, labor, software, tools, and space. We?re talking many thousands of dollars per week from many different vendors. The routine exception? The radio or television rep.
When you ask a businessman for real money, you get their undivided attention and their respect. I know because I?ve witnessed it over and over. The client typically fidgets in their chair and then they lean forward, their eyes riveted on yours, fully engaged. Decision-makers are usually much more interested in investing their time in learning more about a proposal that calls for a real investment in treasure. Chicken poop proposals, not so much. The client is competitive. Give him the consideration of what it would take to win over your audience. Make it big and juicy.
When clients ask if you have any ?packages,? perhaps you could say, ?Yep. We?ve got good, better, and best. Best means that you absolutely dominate your category. Better means you?re a contender for dominance, and good means that at least you?re in the game. Let?s take a look at what it would cost to own the category and what that could mean to you.? Make sure that your ?best? is expensive enough to at least rate the attention of a busy and distracted decision-maker.
If you?re not asking for real money, ask yourself why. If you?re turning in chicken poop orders, maybe it?s because you?re the chicken. It?s up to you to set the minimum standards for a decent schedule on your station. Go high, you can always come down if you have to. Take the risk. Don?t underestimate what the client might be able to spend, especially when he learns how to calculate his risk. What?s the worst thing that could happen by pitching real money, especially when you have a brilliant creative idea to back it up? ?No,? would be the worst thing. I?ve never heard of a media sales rep being murdered for asking for a decent amount of money.
Oh, and by the way, do you know what they call that white stuff in chicken poop? Well, that?s chicken poop, too. Why did the chicken cross the road? To see his friend Gregory Peck.
Paul Weyland is an author, trainer, and a local direct resource for radio and television stations. His books "Successful Local Broadcast Sales" and "Think like an Adman, Sell like a Madman" are available in bookstores and online. He can be reached at www.paulweyland.com or by phone at 512.236.1222
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