Radio Sales Café

This week's Friday poll question:

For the first quarter of 2010, does your station offer reduced rates? Why or why not?

Please post your replies below. Thank you!

No we don't and I'm not sure exactly why, but I can hazzard a good guess. I think offering lowered rates at any time is basically saying to the client, "My product just isn't worth as much as we normally charge." Case in point is all the furniture dealers in the area. They have so many sales throughout the year now that no one comes near their stores unless one is going on. They have conditioned the buyers to expect discounts at certain time periods throughout the year and, as a result, their stores are empty except during their sales. I'm a firm believer that one should set the rates and stick to their guns, adjusting only for inflation, recessions/depressions, and periods of growth. If your product is worth it, they will come and they will buy.

We always do a One Day Sale for the first Quarter. We never seem to have an inventory issue in the 1st Quarter so i have them do this every year. it puts somewhere between $60-75,000 on the books.

No. This is a bad habit that our industry got into - we tied our value to our measured audience and ratings. I would be hard pressed to believe that the size of my audience is diminished by 30% just because it is January. I sell Sports Talk - and our format maintains relevance and importance in the mind of our listeners regardless of the time of year - Pro, College and High School Sports are all part of the programming - and there is always something happening in the world of sports. But there is always something happening in the world of NEWS and TOP-40 and ROCK – people love their radios and the connection they feel with the personalities and artists and programming. There are still going to be traffic tie-ups and trips and errands. Typically, there is a "let-down" in spending after the holiday season - but that is the best time to be reaching out to consumers, making use of the most powerful medium in the world, and keeping the register ringing. People need things - to get their automobiles serviced - HVAC Systems repaired or installed - Homes remolded - pets groomed and trained - children schooled - significant others need to be shown appreciation (dinner out, jewelry, salon, spa) - there are so many things that people need just to function - and they will act on your advertisers' message. Many times, there is a strong push - like a one-day-sale or up-front sale - but that is usually focused on annual, multi-week commitments - not just boosting Q1/January revenue. Sell the VALUE of your audience - and PRICE according to your VALUE Don't discount RESULTS!

This is a question that causes battles.... those with "rate Integrity" vs those who do rate management. In our case, January demand historically is 60% of that in May and November, our two top months. February runs slightly less. So, yes, my rate for Jan and Feb are about 60% of what we charge for November and May. Also the first week of each month is lower demand so that week runs less too while the fourth week is higher.

How do I defend this? Simple. If you were to look at Room Rates in Laughlin Nevada (a gambling town) you would see that rooms at many times of the year are about $26. Many people will NEVER go there because they don't want to spend a night in a $26 room. So you know... these rooms compare with any $200 room anywhere else. BUT there is a week in April when these rooms go for about $300 per night. The reason? Very high demand caused by a biker rally each year. So the question..... should they rent the rooms for only $26 during the high times to maintain rate Integrity? Or should they sell for $300 every day to maintain rate integrity, no matter the demand?

Like Hotels, Like Airlines, Like every other demand based service, my rates go with the demand. This is far easier when you have rate management software, but it is easy enough to do if you just keep your eyes on inventory reports.

No we do not offer reduced rates. We feel it is very important for businesses to get off to a good start with their marketing. He who starts out the year strong, usually ends the year strong. So don't wait til 2nd quarter to get started. We work with the client to have a well rounded marketing plan starting at the beginning of the year. We even plan our station first quarter promotions for businesses to participate, and it's to the client's advantage to start early with the promotion.

We do, normally it's slow 1st qtr, so its a way to pick up new business

We do not. Radio past suggested that we were (to some degree) obligated to make rate reductions to entice business in Q1. (that still may so in some markets) Todays mindset for operators is most likely, and should be, one of quality and consistency. We do not employ lessor trained personnel, reduce the quality of programming, or turn down our transmitters because of first quarter. Our operation actually drives budget increases and rate hikes during Q1 as much as possible. Each market has it's own unique circumstances. Stay the course, build value...your team will win.

Yes, we are selling a 1st quarter package right now with reduced rates plus a bonus if they are the first, second and third client to sign up. It's a lot of fun to work on! We also have a 'marble' contest for sellers who sell them and each marble is worth something that we are each working toward.

We run promotions to motivate sales for our clients January and February, however we are not planning on discounting any more then normal for this time of year based on the present economy. Our sales reflect the same type of sales that our clients might have. We run Boxing week sales during the boxing week. We have Winter clear out sales while our Clients are clearing out their winter stock. Our numbers are up this past 1/4, and expectations are that they will remain to be up in the 1st 1/4 of 2010. We provide better News, Sports and Community coverage then our competition so therefore we have positioned ourselves to be the last media to cut back when booking your New Year campaigns.

We have live staff on the air all day, and we ensure that if something is going on in our market, you will hear about it on our station or website before you will hear it anywhere else. Therefore we are the first place to go for information. This makes their buying decisions a lot easier.....Go where the listeners are. We have from good sources that our competitors are down in numbers, while we are seeing strong months. Local Local Local. Seems to work for us. Ask the listener what they want, then deliver it. Once the clients see and hear that you are making changes to accommodate the market, who else would they choose. When the clients starts cutting back, we may make the cutback list, but not as deep as others medias.

All the best of the Holidays.

Russ

We held a one day sale last month with half off rates, the catch is that the spots must run between January and February. Our positioning for it is that we are helping clients advertise during a relatively slow time for them. I was able to obtain a few new clients and get some extra $$ on the books with clients who are currently on with us. I do see the disadvantage of trying to continue with some clients who bought at the lower rates when I go back to them with our normal rates. As a new account rep, it made it easier for me to get my foot in the door and establish a working relationship.

I have been in the business for 30 years and I believe any sales manager has to be Inventory Repsonsive. It is my responsibility as a Sales Manager to squeeze every dollar out of the inventory I have available. If your inventory is always sold out you have a different problem (your rates are too low), so I am assuming that every radio station has unsold inventory. That being said, I don't just throw out the rate card and start wheeling and dealing. If I have excess inventory on Sunday I might offer a deal to include Sunday's in your regular weekly buy. Or if January has excess inventory, I might offer a reduced price schedule to increase an existing schedule. I have heard many people say that if you lower your rate for a special, your clients will expect to get that rate all the time. I don't know. The grocery store that I shop at had bread on a buy one get one free sale last week. I am smart enough to know that I don't get half price bread this week. I believe most of our clients are far better at marketing (not advertising, but marketing) than we are. They are constantly grouping products and advertising sales to maximize revenue. And yet a Radio Sales Manager will tell you never to lower your rates or make special time sensitive offers because it will devalue your product. Market your station, be inventory responsvie, and maximize your revenue. Trust me, your clients are trying to do just that.

I like your Bread analogy!

We do not discount our rates 1st Qtr. However, we do have an on air auction where we trade merchandise for advertising. This brings in an extra $10-15,000 net.

Like most stations, we offer first quarter incentives mixed in with our fourth quarter schedules. What we will not do is drop rates (too hard to get them back up again). BTW: The first quarter isn’t as bad as some think. . . it accounts for over 20% of yearly consumer sales (the RAB chart breaks it out month per month).

For those clients that do not think first quarter advertising is worthwhile, remind them, the most expensive commercials of the year, air in the first quarter. . . The Super Bowl! A 2 Million dollar thirty second ad certainly supports the idea that it is important to keep your brand name out there!

We have a 1-day sale every year for our group (2 stations). We sell weekly packages for around $1,100. This year we booked close to $450,000 for Dec thru Q1 during the one day sale.