I am in a small market (around market #150'ish). My station is smaller, ma and pa, but we have some HUGE advantages including being as local as local gets and we have MANY of the contemporary digital tools to support traditional ad campaigns that even some of the bigger stations don't -- and they have proven effective. Our engagement with the local market is second to none.
Our station has a smaller coverage and therefore smaller cume BUT... because we're less expensive, our local advertisers, in theory, should be able to afford higher levels of frequency that they wouldn't be able to achieve on larger stations with more cume. And we make the web, email, social media, texting, and other digital tools which compliment the spots EXTREMELY affordable too. After it's all said and done, a healthy order size for our station is around $1,000-$3,500 a month. It seems like SO many clients refuse to spend more than $400-600 a month and while we CAN do $400-600/month deals with more "open" day part schedules, my gut tells me to walk away from deals like that. Tiny orders like those, in my experience, often result in poor ROI for the client, and a piss poor commission for the sales rep, not to mention a bad reputation if the campaign is unsuccessful. Nobody wins. Additionally, I don't like teaching clients that we're a cheap medium. I want us to have a reputation for building successful marketing solutions which generate results and are more than worth the investment. And yes, I do provide client testimonials (written, audio, and video) and in many cases, my best clients are willing to send my newest prospects an email which gives praise to me and to the station and encourages them to consider working with us. Doesn't work as often as you think it would! The price objection still stands most of the time.
I use Manta to get estimated monthly revenues so we don't waste time on people who are truly close to broke... but there aren't too many local businesses in my market doing estimated annual revenues of more than $1 - $3 million a year. LOTS of folks falling short of the $1 million mark. If they're doing at least CLOSE to $1 million, I say we call on them. $1,000 a month SHOULD be a drop in the bucket for them -- but they don't seem to see it that way!
How do you handle the "Whoa, $1,000 a month is a LOT of money for my business. We can't afford this." objection. Would love any and all feedback.
It sounds to me like the problem is still in establishing value.
Have you tried calculating out an ROI number yet? ex: well, Mr. Car Dealer, if you gross a very attainable $1000 per unit, you would only need to sell 1 extra unit per month to pay for this schedule, and anything after that is gravy. Or: Well Mr. Client, if you make an average of $50 per ticket, you would only need to see 20 more clients per month to make pay for this schedule. That means only XX percent of our audience would need to walk through the door.
How do you do that for businesses where the average receipt is less than $30 and you don't have a ratings book to quantify listenership?
It doesn't matter the dollar amount -- if you know (or can find out, thank you google) that their average reciept is $20 and they make a 50% profit margin -- use industry wide numbers if you have to -- you can tell him that 100 new customers per month means another $2000 in his coffer and $1000 in profit, then ask if he thinks its a good investment. if he says yes, you just closed the deal
As for getting around the ratings, thats a bit trickier, either just dont bring up an audience estimate, or use an alternative measurement ex: We have 15,000 facebook fans, and those represent some of our most active listeners. If only one percent of those walk through your door in a month, that means 150 new customers.
Perfect! We do have a strong Facebook and Text Club presence. I will start using those #s.
We bundle advertisers together within same spot, called Radio Preferred, we reduce the spot cost but our net per 60 second ad is doubled, so we take $500 a month budget to produce $1000 a month income
I / We as a team are in the same situation. When you INVEST $1.00 in your business the average
return on that $1.00 is $3.00 to $4.00. That has been a proven percentage for over 60 years. Just lay that out
and see how smart and business savy the client really is. If they do not understand this then let them make the
conclusion to spend only the $400.00 to $600.00 and service that account as if they did spend the
$1,000.00 a month. When you prove them wrong they will bump up their marketing dollar with you.
Kent
Can you provide a real example too make sure I'm understanding correctly?
I'm in a small market too. I've found that many businesses don't advertise because they don't know how to calculate an advertising budget. I've used the Roy Williams method to establish a "comfort level" for the owner. This moves the buying process along. Like Tyler, also use ROI.
Alex, if you haven't read this Paul Weyland article, you might enjoy it:
Jack-- forgive me I have not read much by Roy Williams! What's the Roy Williams method for establishing comfort?
Great read! Live the Thanksgiving metaphor.
In my market I'm seeing stations give out client interviews with the jocks + huge spot buys on buy two get one free basis... at literally $200-$300 a month price points. i.e. -- putting them at the small table.
Alex, all three books in the Wizard of Ads series are available as free PDF or MP3 downloads at rhw.com
Alex, what you are experiencing is very common. Let me first address your comment on low frequency airtime schedules Full Reach. Many stations offer these campaigns to attract advertisers that want a low monthly investment, particularly very small businesses. Yet, they seldom offer any tangible results back to the advertiser. As Media Salespeople, it's our job to create cost-effective advertising campaigns. Consider that if the schedule doesn't perform, its not cost effective no matter how low the investment may be. Here's my best advice to you.
1. Do a proper Needs Analysis with each and every client. Drill down to find their true needs, not surface level ones.
2. Pool the resources you have at your radio station. They appear to be significant, especially for a smaller market.
3. Share the concepts of your strategy with your clients every step of the way to get their buy in before you present your proposal.
4. Ask for a sizable, yet reasonable investment based on the creative marketing ability of your strategy. Start high and work down. Don't be scared to ask for large dollars. Just make sure your concept is worth it.
5. Justify it by finding out how many client widgets are required to sell to make your concept financially feasible. This is what the client will ultimately be calculating to justify the decision.
6. Tell your clients who say "Wow, that's a lot of money for my business" this- I'd rather give you a creative marketing strategy based on your business needs for a larger investment rather than offer you offer something that probably won't work just to make a sale. That's how I do business with my clients.
Alex, I have never had a client in radio comment on high rate or monthly investment once they start seeing justifiable results. It only happens before they make the decision to proceed. I have repeated that phrase to many clients over the years. They usually smile and proceed. We need to put ourselves in the minds of business owners. They have all been burned before by Salespeople who over-commit and under-perform. They are spending their profit dollars with us and have a right to be apprehensive. Hope this helps. Good Luck
