Thanks Lynn,
It's great to hear at least some stations take their inventory seriously.
Why not do the same on the other 6 stations? I know bonuses are hard to wean from but why are they desirable? Because, deep down, the client knows the extra spots will bring more listeners to the door.
If Lynn is like us, the total inventory does not vary but the amount sold does. Rather than air a PSA in an empty slot, some stations will bonus ads to get the buy. I am not a fan of bonus ads and have not found that they help me get the buy.
Personally, I think the personal connection of radio with the listener makes advertisers (often listeners as well) more willing to ask for a better deal. After all, we are their "friends".
I've found storytelling a tremendous tool to beat down objections or make a point. "I had a client who once thought...)", "a co-workers best customer..." Storytelling is engaging, makes a point that the client arrives at themself, and is not offensive.
Lynn,
Congratulations! Based strictly on the supply-and-demand situation you describe, you've made a strong case for raising the rates on your two stations that are "habitually 'out of stock'" as you put it. Booking schedules early simply puts more pressure on the supply. Charging higher prices (completely justified by your "sold out" status) would free up inventory for those willing to pay the freight. An advertiser who recognizes the value of those stations' audiences to his business would likely choose to pay more for continued access to those listeners.
Echoing Andy Havens' comment, why don't you have the same inventory "problem" on the other six stations? The answer, of course, is that the demand isn't as great for these stations as for the top two.
Do all your salespeople sell all 8 stations? Or do you have people or teams representing different stations or combinations of stations? All other factors (programming, marketing) being equal, the only remaining variable is the sales effort. Buying resistance can be overcome by raising the number (or quality) of "asks" or it can be lowered by giving away bonus spots. The former involves a greater investment of time, effort, and money (adding salespeople, training, supervision, etc.); the latter creates a different set of problems but may involve less hassle.
Not having the problem personally, it's easy to be an armchair quarterback. :>) Admitting this, I'd tend to favor not giving away airtime but using it for PSA's, station promos, charitable donations to community non-profits, etc., reducing the supply a bit while trying to increase sales-driven demand.
The use of a grid rate card at one time in the industry addressed supply and demand.Most software is price prioritized.Being a hired gun, I always have to demonstrate why it is that the station was me on board.I get top dollar and the client is assured best placement,I do share tactics. Rod is right, sales training is paramount for the station to be sold out, at the maximum price the market will allow.
I'm in too, Mike..please share! Thanks. Great Topic and debate.
Not nice! No way! Sales Rep generally work very hard to get sales/sponsorship for stations.
IF it is necessary to discount to make the sale...why reduce commisions? Any reduction should be at the Sales MGR's expense, they are not the main ones on the road.
Simon! 
Interesting, Jack. I like!
I hope to get my program, JAMAICA SPEAKS, "out of stock"! We are moving/starting on a new station on Monday, 3rd Sept. to increase clients, range, revenue, listenership, visability, etc.
Our program caters to the business leaders, movers and shakers of the economy of Jamaica. We are a morning talk show thats discuss the news, current affairs, persons in society, etc. Our show is widely respected in Jamaica with Top Host Panelists.
I am the ONLY direct Sales Rep to the program; other sales rep are contracted with the Radio Station to sell on our behave(the program) if they so chooses.
So we have an excellent product, how do I market/sell it to potential sponsor without discounting too much and devalue our product/brand?
And be ahead of my "competitors"(station Reps) and other station Reps? Any answers to these two concerns? I'm also new in Radio since June 2012.
I enjoy my work and is progressing but open for improvements/suggestions.
What a great group of responses, ideas and passion. Obviously a good question. I'll add my few cents to this debate:
An ad space that goes unsold is exactly like an unsold airplane seat, an unsold hotel room or an unsold ticket to a Red Sox Game. However, a sold out Hotel, Baseball Game or Airplane may be the sign of poor pricing (too low). When you climb on an airplane, you do it knowing that not everyone in coach paid the same to get that seat, and you know the people in First Class may have paid even less for their seats. Wait.. that sounds wrong doen't it? The First Class cabin may be full of people who paid less..... ???
Years ago when I was training all over the country every week, I flew one airline as much as possible. Why? Because they gave me "Value Added". I was given a card to get into certain waiting rooms at the larger airports. I was handed certificates for Dinner. I was upgraded to First Class nearly every time I flew. Why? Because rather than just try to score one $600 ticket from me, they were giving me value added to get most of my $30,000 plus per year travel budget. Same is true of the Hotel chain I stayed in. I can tell you where the best suites are and no, you cannot rent them. But road warriors can because this was the value added these hotel chains gave to me to assure that I, as a heavy buyer, would keep all of my business with that hotel chain.
Neither of these businesses gave me these "gifts" for free. But niether did they ask my budget. They kept track of me and rated me. Anyone who goes to a casino regularly understands being rated. That is when the free rooms come, and the free meals and the free drinks. (And no you are never going to be RATED playing the Penny Slots).
So now let me ask you THIS question: I call this airline to get a flight. Am I EVER told the flight is sold out? NO. NEVER. That is when you get to the airport and hear that the flight is overbooked and they start making offers to get people off. THAT is my value added. When I call the Hotel and it is SOLD OUT... is it really? Or did they have a few rooms held in reserve just in case? (They always do).
Now lets look at rates: If you ever come to Laughlin Nevada, a small gambling town about 90 minutes South or Las Vegas, Nevada you would find 11 casinos. You would find some of the nicest hotel rooms there are. Big, clean and beautiful. This week you can get one of these incredible rooms for about $26. If you come back in April, the same room is $300. Why? Supply and Demand. The last week in April there will be about 50,000 motorcycles in town and they can get a ton for rooms. But...but Chris... what about... RATE INTEGRITY???. Seriously? Holding your rates when you are 25% sold? Does that make sense? Likewise do you then hold your rates when you are 110% sold? Or is it okay to move them up THEN?
Here is where I come from: If someone out there is waving a $100,000 annual budget in front of me in my market of 230,000 (county) then guess what? I am going to first do an ROI calculation... (Not how many people are reached but how many widgets I have to move), then I am going to figure out the copy to get that deed done, and then I am going to figure out a schedule to MAKE that happen. The "rate" be damned. The rates will be what the rates are to get that job done.
Finally: When I pick up the phone to an agency, I KNOW THEY ARE GOING TO MENTION VALUE ADDED. So I LEAD with it in the conversation. In my rate card there is a Value Added GRID: (Spend XXX per week get XXX) etc. It is right up front for all to see. Then I build a bit more into my rates so I have something to give back to the buyer so THEY look good in front of their customer.
Now that I have pissed off half of the GMs and all of the consultants and everyone who taught me radio I'll tell you this is just how I do it. It is just my opinion.
PS: Want the ROI calculator? It's at www.FreeRadioTools.com
PS: Want to see a great Rate Management solution? When you get to that site, fill out the contact form and ask for it.
I can see why your owner/manager is resisting to your giving 2-for-1. A straight up carte blanche on this is just not a good idea.
Agencies: generally are looking for (a) 20% bonus spots on schedule - these can run M-Su 6a-12m, (b) sponsorship of news, wx, (c) website/social media i.e., logo on station website with link, email blast, multiple facebook. Place a c lear value on whatever you put in. If it's a schedule, run a 'bonus' schedule separate from the buy so they see what they got and can communicate that to the client. They're interested in CPC - cost per commercial. Look as value added in this case as maintaining rate - bonus improves CPC without effecting rate.
Direct: bonus spots/value added is a negotiation tactic and must be used judiciously. To earn bonus spots the client has to provide some concession as part of the negotiation... they agree to run 1 year instead of 6 months, they agree to a higher frequency ($) for their sale schedule, et al. They give to get. This is something they understand as retailers and service providers. They do it all the time with their customers. So every presentation is 2 or 3 levels - the more they buy, the higher the frequency, the more 'bonus' you are able to offer as incentive to do more. And the bonus can be geared to the client - overnights for a 24-hour gym, weekends for a restauirant or retailer.
Your owner/boss is more likely to approve this kind of bonus planning because it generates more client activity - you're not bonusing to get business, you're bonusing to reward business.
Bonus. No Charge. Added Value. Remnant. It's all the same. They are asking for something free. Can I get a free desert with my dinner. Only as a special promotion.
Same in radio. there has to be a reason. A "Quid Pro Quo". I can give you what you want but I need a 26 (or m52) week order. Or Cash-up front.
What does the radio station get in return. It's a fair question.
