How to Raise the Bar on Local Client Budgets
by Paul Weyland, reprinted with permission of RBR.com
These next few weeks are critical for radio and television reps trying to lock in 2011 local direct ad budgets. The question is, even in a recession, are you asking for enough, or are you leaving money on the table? My sister-in-law Mary owns a frame shop in Kemah, just outside of Houston. Her work is imaginative, tedious and exemplary. Her clients include astronauts, doctors, attorneys and petroleum engineers. She complained that she had never increased her prices because she was afraid she’d run off clients. I suggested that perhaps her paranoia was unjustified and she experimented with a 20 percent price increase. She lost two customers she didn’t want anyway because all they ever did was haggle over price. None of her other clients even noticed, or if they did, they didn’t complain. So, in reality the rate problem was all in Mary’s head. If you have trouble asking for more, consider that the real problem might be no further away than the end of your nose (that’s actually a long way away for me!).
Almost every week I sit with local direct clients and help them come up with a five-year marketing and advertising strategy. It’s interesting to observe how these business owners behave when you ask them for real money. They usually squirm in their chairs and then lean forward, as you now have their full, undivided attention. Why? Because like the client’s other vendors, you’re asking for a real commitment, not chicken feed. Suddenly you have a psychological advantage. And guess what? Not one single client has died or gone off into hysterics as we discuss the bigger budget.
So, why is it so difficult for some sellers to ask for the big bucks? I just got off the phone with a television sales rep who called me looking for a creative angle for a local client. We came up with a great idea and the rep was excited about presenting it. Then he said, “I’m calling the client right now to find out what his budget is.”
NOOOOOOO! When you have a client interested in a great new way to manage his public discovery, it’s YOUR job to recommend the budget. Aim high, not low. Base your recommendation on what it would take for your client to own his product/service category on your station. Kick-butt creative, combined with frequency equals results.
There are two kinds of people, those who come up with ideas and those who consume the
ideas of others. Big ideas are worth big dollars. Ask for more. Give yourself a raise.
A local home improvement store (45 percent gross margin of profit, average sale $300) has a new idea from his local television station. Without scripts, he shows people how easy it is to snap together a new hardwood floor. His new tagline is, “See? It’s easy! You can do this!” Other commercials show the people how to install a dog door, how to add ceiling trim, etc.
He supports his commercials online with step-by-step instructions. And, he tells the people that if they don’t feel like doing the project themselves, he has a list of qualified and honest contractors that will do the job for them. The client loves the idea and he understands the value. We explain the weekly cost. He squirms a little in the chair, leans forward and we come to an agreement that far exceeds what he’s ever spent in the past.
A homebuilder (gross margin of profit 20 percent on an average sale of $200,000) in a popular retirement area loves his new creative strategy. On radio he tells empty nesters that it is okay to downsize. A smaller home (under 2,000 sq. ft.) but packed with amenities is the new “cool”. He explains the benefits of getting rid of staircases. No more maintenance. He talks about the unnecessary cost of heating and cooling empty rooms. He even helps them sell their existing homes. When it’s time to talk schedule cost he sits up and leans forward. But he doesn’t balk because he understands, based on the ROI that the calculated risk is so very small.
Support your suggested cost by calculating return on investment. Just use the client’s gross margin of profit against his average sale, so you know how many new customers per “X” thousand dollars per week spent per week your client would need to generate to achieve break-even and beyond (or purchase my ROI calculator, The Mediator™ at www.paulweyland.com ).
Don’t forget that gross margins and average sales stay consistent regardless of market size. So smaller market stations have the right to ask for more as well. The important thing is that if you don’t get into the habit of asking for more you’ll never get more. So, ask, ask, ask.
(source: Paul Weyland is a broadcast sales trainer, author and front-line “hired gun”, directly talking to local clients on behalf of broadcast stations. He can be reached at 512 236 1222 or by going to www.paulweyland.com. Read his book, Successful Local Broadcast Sales, available at bookstores or online.)
