Radio Sales Café

I'm a long time sales person so I have my opinion on this one but I'd enjoy hearing your thoughts on who a client belongs to and why. I thought this would be a great way to get the week going for all of us.

This is an interesting question. I come from this on all side, having been an announcer, a salesman, a GSM, a SM, GM, and owner. Lets look at each of the parties and make the determination:

Radio Station Owner:
This person is responsible for identifying a marketing area, and either building or buying a station. In any case we are looking at at least $1M per station by the time you are ramped up. The owner is expected to provide a usable signal, proper engineering, payment for ASCAP/BMI/SESAC as well as the payments to the FCC for spectrum fees. The owner is responsible for providing all business services including but not limited to bookkeeping, traffic, billing, tax returns etc.. The owner must maintain a facility that is suitable for a sales staff to operate from as well as for air staff and others. The owner is responsible for promoting the stations and the radio business in general to the community. The owner may be required to provide Internet service and possibly even cell phones and computers. The owner must arrange for and pay for training for sales people, keeping them ahead of the curve.

The sales rep:
The sales rep has basically a free franchise. When they start work they are usually covered earnings wise for a period of time as they get up to speed. They call on businesses under the signal and form the business relationships that allow them to get the message about what the station does to the prospects. They create advertising and take care of paperwork and collections. They need to be training themselves constantly to keep up with an ever changing marketplace. They need to provide reliable transportation and a business wardrobe, appropriate for the place they are working.

Now as to the splits:
The Radio station, once a rep is established, gets about 80 cents on a dollar. From this the station also must pay their part of the reps SUTA, FUDA and FICA as well as whatever part of employer contribution is to either retirement and/or health insurance. This usually adds up to about 26% total remuneration. After that, the radio station must pay everything shown above to keep the business going as well as any financing costs associated with starting the business. The rep pays for their car, gas and auto insurance.

The rep may consider that since the radio company is getting 74% or thereabouts that the station is in debt to them. But while the rep walks off with their share, the ownership is looking to end up with maybe 20% NET after all of the payments have been made. In reality, most radio stations may show a margin that is higher, but this is usually EBITDA. When everything else is poured in, the radio station these days has far less.

The rep can at any time leave for another job. The radio station owner cannot. The radio station rep can work in some other industry in town. If the radio station owners fails, he is packing his house looking for another place that needs a radio station owner.

Now considering everything set before this, I dare say that while the rep is an important part of the equation, the radio station owner is the one who brought the most chips to the game and has the most at risk. The rep is well paid for their contributions, but in the end it is the owner who has invested in the market, and they retain ownership of the account list.

That's my opinion... I may be wrong!

I would agree with 99% of what you've said. I do, however, feel it is important to instill that 'sense' of part ownership by the sales rep. After all the prospecting is done, all the self-training, drive time, energy and putting yourself out there, the sales rep has a lot of themselves invested in bringing that client to the owners table. I like your analogy of the 'franchise'. I tend to think of my list as my business within a business and I treat my clients as though it is my business I am running. With that being said, though, as soon as you walk away from the owners table, you walk away from the clients too!! End of story.

That's an easy question. All clients belong to the radio station....not the sales person. Sales people may come and go, but generally the station remains. If there was some way for the client to pay the salesperson and then the sales person commission the station...well, maybe then the sales person could claim "ownership". Here's a better question.... who's client is it...the sales person at the station or the advertising agency who sends you the business? I have my own rule on this matter. If I worked the account before the agency became involved it's mind and the agency is just a middle person. If the agency brings a totally new client or business to the station, they "own" the client and I'm just the middle person.

On the surface, this is a no brainer, the accounts belong to the the station and the station has the final say in who services the account.....and that is where it gets complicated. As already stated, the AE works for the station as well as for the client and as long as the account stays current, in good standing and all is well, the account should remain in the hands of the AE responsible for "mining" the account. However, what do you do in the case of personality conflicts, dissagrements etc, between the client and the AE.... or a request from the client to have someone else service their account? Then the GM / Owner needs the wisdom of Solomon to discern what is in everyone's best interest.... but in the end...what is best for the station.

With over 18 years in the industry, I have been on both sides of this scenario for various reasons. Sometimes it was a personality conflict between the existing AE and the client....sometimes it was my personality and the client.....sometimes it was station policy regarding advertising.....and sometimes it was unrealistic / unfulfilled expectations that were the core issues.

Fortunalely, I work for a very wise man who more often than not sees the real issues in spite of the smoke screens and in the end, I have always aknowledged and honored his finak decision as onwer of the company. Otherwise, I would be running as an independent ad agency and not working for him.

That's my take.

No one owns the client...if you are an AE, the clients on your list are your responsibility. It's your job to help them achieve their objectives...by doing so you create a revenue stream for yourself and the station. The station, your employer, controls the client list, because that is the way it, account management, currently operates in most markets large and small. Bite the bullett, if you build a relationship based on trust, most likely the client will buy from you and management will reward you. I too have sat on both sides of the sales and management desk, and this is one mans opinion.-

Client belongs to the station. Because they are a customer of the station's products.The saleperson may have indeed sold them well, however isn't that their job? Salesfolk are sub contractors...They would not be working with the client if they were not employed by the radio station. I understand we as an industry preach...nay scream that it is about relationships and those are personal...agree, however at the same time... ultimately who has the power and ability to correct or fix any client concern. If they so choose, the station can rebate...no charge...give them a complete "do over" on a radio champaign. A situation gets "hairy" a salesperson can bail ...who has to clean up the mess...THE STATION. Pay your salespeople well for doing their jobs well...However they handle the accounts as representatives of the station...not the owner.

In my humble opinion? The client doesn't belong to anyone. The client has the right to choose both the account representative and the radio station. If the client isn't happy with the account executive calling on him/her, the client can call management and ask for a different rep. In the case the client has a great working relationship with the rep, but the radio station isn't working, they most likely would not continue to invest money on that station. If the station works and the rep leaves? The client will continue to advertise on that station because it gets results! Today, developing a relationship with each advertiser is critical. Equally important, are the results each client generates from each station during these economically tough times.

I started as a sales person and am now a sales manager with an account list too. I beleive that the client belongs to the station. Yes, sales reps are required to cold call, prospect and build realtionships with businesses.. But the station supplies all the tools, regular ongoing sales training, and pays all the business expenses, including employee benefits. So yes, the clients do belong to the staitons.

It's very simple. The client belongs to the radio station and all advertising $$ spent. When the rep. leaves, the client is reassigned to another rep ....up until the last day of employment (or whatever is arranged), the rep can go out and collect as much as possible for their last commission check, then it's all over for them. The station's Sales Manager or G. M. has the right to take a client away from a rep, so the client must be the property of the radio station.

Interesting question. I would like to believe that client lists belong to the station while client relationships belong to the sales person. But, if an advertiser buys a particular radio station it's b/c they believe it's the right fit for them and the right outlet to deliver their message. I find it interesting that stations' GMs / GSMs sometimes fail to recognize this dynamic. How many times has your GSM tried to steal a rep from your competitor with the hope they will "bring their list with them." Occassionally it may work. On rare occasion does a client follow an AE from one station to the next.

One wonders how a client would react to a station or salesperson telling him "you belong to me." Most advertisers I know would scoff at the idea that either entity "owns" them!

Technically, there are three distinct relationships involved (station/rep, station/client, client/rep) - all essentially voluntary, subject to the terms of their respective contracts. The question as you pose it, Jeff, is an internal matter describing the relationship between the station and the salesperson, right?

Practically speaking, the station through its management usually reserves the right to assign specific accounts to its salespeople. Even in companies where salespeople are doing a lot of cold-call prospecting (as opposed to working with assigned accounts), hopefully management will have some sort of structure in place, to keep sales reps from stepping on one another's toes, if nothing else.

Occasionally (hopefully infrequently) a client may request a different rep be assigned to work with him, usually because of some perceived incompatibility. My own experience has been to deal with such situations on a case-by-case basis, and to try to resolve any conflicts as fairly as possible. Ultimately that decision should be based on what the client believes to be in his best interests. Right or wrong, he's paying the tab.

That said, each client relationship begins with a blank sheet. Over time such a bond may be forged between the client and his rep, especially if that rep knows his business and has assumed the role (and responsibilities) of a consultant, a trusted adviser, and has established a track record of bankable results for his client, that any discussion of who "belongs" to whom is moot, because all parties are enjoying the benefits of that relationship.

One last thought:

On the question on the table, how would the following companies answer this question:
IBM
Microsoft
General Dynamics
Merck
Google

The client belongs to the station and the station grants the salesperson the right to do business with the client on the station's behalf.

I'm sure owners and managers have their particular view of this question, but as a sales person mine's just a tad different... I'd have to say it really depends on the sales persons style and technique I've seen many a client follow their sales person... if the sales person has proven to be a real asset to the clients company.

Now if the sales persons effectiveness has been marginal... then yeah- the client belongs to the station. But--- if you're really good...

He who finds it, mines it, makes it prosper... will often take it with him (or her)

in my humble opinion.

As long as you represent the station, that client is the station's. If you leave the station, does that client leave too? If your station is working for the client (getting results), then I would suggest that the client belongs to the station. You might get that client because you are charming and full of ideas, however, if you are not getting results, that client will stop spending money on your station. Leave the station for another station and see if the client follows you. They might, until the results come in. In reality the client belongs to the client, not the station nor the salesperson and results create the bottom line.

A client or list of accounts is the property of the station. The sales rep, account exec, account manager, brand specialist (I know, none of us could figure that one out either) is an agent of the station who represents the station to the client...manages the account for the station...specializes the station for the client. Always has been...always will be.

I have read all the posts, and am surprised at how many people think the sales person has at least partial ownership in the client list. This is not a complicated question. The client list belongs to the station. Even if a salesperson has prospected the client, the sales manager can switch the account to a different rep if he or she believes the new rep can get more money from the client. It is the sales managers responsibility to make sure every client produces maximum revenue for the station. That's what we get paid for. I know account assignment (or re-assignment) can be a difficult job sometimes but again, that's what we get paid for. As far as agency business goes, we are a small market and 85% of our business is local direct. All the agency accounts are house accounts. The client can't choose who they want for a rep either. I have found that some clients want an old friend to call on them because it is easier to say no. Again, the sales manager has to assign the account to the sales person that can get the most revenue from the client. Sometimes that is the rep the client wants and sometimes it is not.

I'll have to add it probably depends on the size of the market... having worked in a small market radio area for some thirty years I can assure you that I've seen a mass exodus of clientele with a couple of reps I've known. All I'm saying is that - it does happen.

Now, that being said. I'm not one of them... but have been in the wake of some very possessive AE's I can tell you that it does indeed happen... irregardless of some moral high ground some of you may maintain...

Looking back it may be because of the quality of sales reps that were left behind... did I just say that out loud? Nah- that'd be too harsh.. and perhaps self incriminating.

I haven't played in the big leagues where there are actually - gasp - copy writers... and layers of sales managers for this or that... we're small potatoes out here... not exactly thick with talent.

But love Radio!

To those belieiving that the the client belongs to the station. Have your station go messing around with clients on an agency’s list and see how fast it takes to lose the accounts.

There are cases when an agency buys around the station and the station goes directly to the client. This usually does not work for the station. The result is (if the agency is a heavyweight) that the agency retaliates by cutting budgets or pulling their other clients off your station. This is along the lines of the cliché about tugging on Superman’s cape.

The basic radio philosophy is that all advertisers belong to the station . . . . agencies come and go, but the station is always there. It is a very costly philosophy, when it does not work. . . .