From the Corner Office – February, 2011
February 3, 2011
There’s an adage that goes something like this: What’s the first thing you do when you find yourself in a hole? Answer: Stop digging.
Radio is slowly emerging from the hole that we found ourselves in during the Great Recession, but we’re not yet back to our historic revenue levels. Then again, whole segments of the economy can say the same thing. Our hole does not look anywhere as daunting as, say, the housing industry’s hole, which will take years to liquidate the overhang in their market. While radio has bounced back, especially compared to some other media, we still have a ways to go. Progress will be steady and slow, reflecting the forecast for the overall economy. We have to have faith and patience that the healing will continue.
Unfortunately, many in our business have not adopted this forecast; they continue to keep digging at that hole they find themselves in. They look only at the short term – agency avails shrinking, buyers demanding better and better costs per point, and PPM measurement showing declines in station TSL. What’s a manager to do to make his or her monthly revenue budget? It surely must be first quarter when many radio managers are dropping rates, reworking packages, throwing in no–charge spots, and running a sales contest. Does anyone really think that will get us out of the hole? Or will it simply devalue our unique and wonderful medium?
I believe strongly that the answer lies in going back to the fundamentals; we must invest to grow our businesses locally, which means introducing more people to the effectiveness of radio advertising. We cannot sit back and expect our national reps to provide us the growth that they posted in 2010. We have to make the contacts and the calls necessary to introduce new businesspeople to radio and sell them on the benefits of our medium.
I am not talking about the cold calls that come from the newbies checking the newspapers or yellow pages; those days are long gone. Each station needs to have a strategic plan for its selling effort, a plan to make time for developmental selling on an organized and ongoing basis. We must believe enough in our medium to have regular business conversations with prospects. Will this strategy put business on the books for next week? Maybe not, but every salesperson can agree that a well-qualified and well-educated prospect can develop into a very fruitful long-term client. It takes time, attention, commitment and salesmanship.
We can no longer think only in terms of the month and the quarter; it really is killing us. Nor can we be held hostage to ratings estimates in a world that is moving quickly to real time measurement of engagement and results. That means that we must focus on the results that we know radio can and does deliver. We need to lay out concrete plans to our sales managers and account executives that show we are willing – and able – to deliver measurable results for advertisers.
We need to reframe how we talk about our stations and their audiences. We need to stop digging by using outdated terms that set us apart from the growing digital world. Let us embrace and compete in the new marketing reality. What would happen if we stopped talking about cumes (a radio word if there ever was one), and started talking about the 500,000 unique visitors to our stations in a month? Radio has scale; we are big and we move listeners to respond. We can and do move product each and every day. Why do we continue to focus our competitive energy in beating the daylights out of other radio stations and sellers? We’re just digging deeper. Let’s stop.
The challenge is to grow the medium’s top line and we can do exactly that. But we have to have a plan and we have to devote the necessary time, skills and resources to that plan for it to have a shot at success. Solution-based selling is not a mystery in the radio business. We have account executives who make very good livings doing exactly that. But we have far too many order-takers who shy away from the challenge of conceptual, results-oriented selling. They may be experienced employees with a record of success prior to the Great Recession, but they are holding us back from engaging in the challenge of 2011.
Likewise, sales managers who shuffle lists of tried and true clients among sellers, hoping for a different result, need to stop digging. We rely on sales managers to recruit the right mix of talent, make the assignments, and attack the marketplace on our behalf. If a sales manager today does not have a well-thought-out strategy for new business development, they are doing their staffs and their stations a true disservice.
And there are those on the product side of the business as well who need to stop digging. Program Directors who spend all their hours attempting to devise tactics to game the PPM in hopes of getting an edge; who ignore the station’s digital assets, or worse, do not believe that they are part of their job. These folks need to step away from the shovel and stop digging. Look around and recognize that your listeners are deeply involved with new and captivating media choices that make your programming tactics look old-fashioned by comparison. Put your mind in gear; take a calculated risk and breathe some fresh air into your radio stations. Stand up and be accountable for putting the crackle back into your programming. And recognize your obligation to work with advertisers as well; no longer can we stand by the separation of sales and programming, like church and state, when our competitors in new media are innovating with customized and integrated solutions that speak directly to consumers on behalf of the advertiser. Stop digging.
I understand as well as anyone that the pace of change has accelerated for the radio business and the challenges come fast and furious. But the way forward is not to cling to our past glory, hoping for a miraculous return to it. The way forward is to stop digging and start climbing out!
I’d love to hear your thoughts about this; drop me a note at AskPeter@greatermedia.com.