PPM’s LESSON FOR TALENT: GET TO THE POINT!

IN AN ELECTRONIC RATINGS WORLD, THE DAYS OF LEISURELY CHAT ARE OVER

As Arbitron continues to roll out its Portable People Meter (PPM) wireless radio ratings technology we’re learning a few key lessons about how listeners respond to what they hear – and what makes them vote with their feet. Today, in Part One of a two-part look at what we’re gleaning from PPM ratings, a dramatic new truth for talent in all formats: Don’t dawdle – get on with it.

While Top 40 programmers have preached short-and-snappy for decades, PPM makes talent who get even a little too chatty pay a stiff price: less cume. And make no mistake, it’s a cume world now. No more diary-based recall methodology. The PPM simply sits there and logs what’s being listened to. As a radio station manager that means your stations – the only brands you have to sell – had better not be wasting listeners’ time.

Talk Radio The Doesn’t Blow Hot Air

This is especially true for talk radio, both issues-oriented and sports. Many a talk show host has grown up professionally listening to the kings of talk radio but that isn’t always good. The long-winded hour opens (or teases or churns) practiced by some of the most famous yakkers in radio became Old School the day the first PPMs powered up. Now, it's not only antiquated to cruise through a ten- to twenty-minute show or hour open, it's deadly.

Many program directors and programming consultants are now urging talk hosts to trim their opens and get into the meat of their shows many minutes sooner than they used to. It’s an issue for every talk host but especially so in sports talk. The nature of the format is changing from a-bunch-of-guys-yucking-it-up-at-a-sports-bar to serious discussion and creative entertainment. It’s no longer enough to have photographic memories for sports stuff; now sports talk talent must not only draw listeners in but entice them to stay throughout each hour.

For issues-oriented talk, talent has to have a clear road map not only of the hour ahead but of every minute in that hour. Yes, flexibility to jump on a story or ride a particularly juicy call a little longer are still important. But one of PPM’s crucial lessons is that programmers’ long-time habits of loading up the first quarter-hour are wrong: listeners stay aboard fairly evenly – and desert just as evenly – throughout the hour. Thus the need to get into compelling subject matter fast and keep it moving.

Why This Isn’t Just The Program Director’s Issue

As a radio station manager, you’re responsible for every aspect of operations, from sales through to the transmitter and beyond. But your key responsibility is to drive revenue. To do that, you must oversee your programming knowledgably. Which means you don’t get to say, “PPM? That’s the PD’s problem”.

Sorry, Big Cheese, but it’s yours, too. If you don’t understand the rapidly unfolding new world of PPM you run the risk of losing significant ratings because you thought everything was running fine, just like it did in the paper diary days.

With every market that goes on-line with PPM (or achieves “currency” with it, to use Arbitron’s phraseology) and with each fresh ratings report, more useful – in fact, fascinating – lessons are becoming available about how listeners use radio right now. Only by staying current with these new developments can a radio station manager hope to be able to work with program directors and consultants to survive and thrive in the brave new universe of PPM ratings.

Wednesday: In Part Two of our PPM update, a look at how the new ratings tech is dramatically changing what we thought we knew about programming.

EMPOWERING YOUNGER SALESPEOPLE

DRIVING REVENUE BY UNDERSTANDING TODAY’S YOUNG SALESPEOPLE

Many young radio account executives quit or get fired long before there’s a reasonable expectation that they will succeed. This is often because of some radio station managers' outdated views about how young people are wired in the 21^st century. The best way to empower younger sellers is to understand who they are and why they do what they do. This will be different. It won’t kill you. It won’t even seriously injure you.

If you want to hire young people and keep them you have to adapt to the way they think.. Here are some ways.

Knowing that they’re not shy about changing jobs based on money – don’t pay them straight commission or some other insultingly low “entry level” compensation. If you want them to act like adults, pay them adult wages. Of course, you’re going to compensate them based on performance but don’t price them into the revolving door the moment they’re hired.

Knowing that they’re social and peer-oriented – use this to your advantage. Start them out calling on people close to their own age, if possible. Let them establish business relationships that are comfortable for them now because, guess what? This generation isn’t going away. If you’re going for long-term growth, you’d better be able to get these people off to the right start. You’ll need to work with any of them who don’t know how to write proposals and leave phone messages in a businesslike way but, hey, we also know that they absorb education well!

Knowing that they work well together – why not let them work on projects together, perhaps mentored by an older sales person who gets what they’re about? Loyalty to the group is a big deal to these young lions. You can use that to keep them interested and valuable.

Knowing that technology is practically bred into them – listen to them when they have ideas (which they will) about how your systems could work better. And don’t shoot down ideas that aren’t practical or that you don’t understand. They’ll appreciate your consideration even if you don’t adopt their ideas. (Plus, what they suggest that doesn’t work might get your brain working on a variation that does. You’ll share the credit, right?)

Knowing that they need personal attention – give it to them. Spread it around, too, so your older sellers won’t feel left out. Some of them would rather just be left alone but that leaves more time for the ones who need some quality time from you. Praise them for work well done and reward them when it’s appropriate. And keep in mind that they not only want this but expect it in a relationship of any kind.

Clearly, communication is the key to managing and retaining younger sales people. In chapter 16 (Dialing In Goals And Expectations) we’ll look at how precisely describing what you want and carefully listening to what they want is a tremendous factor in keeping this generation away from the revolving door.

As Generation X becomes a more mature slice of the employment pie, the so-called Millennials hit the work force. What do they want? I read the results of a survey taken by that iconic bastion of pop music, MTV. It listed friends, family, technology and health as things that are most important to this group. No, this doesn’t foretell a return to the Fifties with iPods added. It’s just the normal swing in values from one generation to the next. Understand it – and profit from it.

This article contains information form my new book, The Zero Turnover Sales Force: How To Drive Revenue BY Keeping Your Sales Team Intact. Grab your copy at your local Barnes & Noble or Borders or, if they’re sold out,  at http://www.amazon.com/s/ref=nb_sb_noss?url=search-alias%3Dstripbooks&field-keywords=Zero+Turnover+Sales+Force&x=20&y=15

EARLY CHRISTMAS FROM ARBITRON: RADIO AUDIENCE IS UP

MORE DIVERSITY, AFFLUENCE, EDUCATION – AND TEENS!

The Greek Chorus of naysayers that has been intoning the erosion of radio will get a collective muzzling next week from Arbitron. Its soon-to-be-released RADAR 107 National Radio Listening Report not only shows that radio listening is actually up – 3,300,000 more overall weekly listeners 12+ than last year – but that, far from deserting radio, younger listeners are turning to it in large numbers.

And for those who sell radio advertising, there’s money all the way through the new nationwide listening survey.

RADAR 107, a year-long measuring stick of network radio listening, covers 54 individual radio networks and calls itself “the standard currency for national network radio ratings”. Since so many stations now rely on networks like Westwood One, Dial Global, American Urban Radio, Premiere and the rest for all or part of their daily programming, this is an important – and uplifting – study.

Let’s jump into the advance numbers. Don’t worry, the water’s fine. Really fine.

The Kids Are More Than Alright

Particularly gratifying to those of us who never bought the argument that radio has become too un-hip for younger listeners in the iPod Era is this little gem from the Report:

            Teens aged 12 to 17 continue to embrace radio broadcasts with

            an average weekly increase of 365,000 versus last year’s report.

There’s also great news for stations that want to embrace young Hispanics:

            More Hispanic Teens aged 12 to 17 are tuning in to radio versus

            the same period a year ago. This demographic group increased

            (by) 177,000 average...listeners a week, year over year.

The growing number of Hispanic Teens in the radio universe can only be a strong signal that radio continues to offer something for everyone.

Strength in the 12-17 demo is far more important than it used to be. Where even an enormous teen audience was once thought fit only to be sold acne medication and Coca-Cola, that bunch is now far more affluent. And, of course, the habit of regularly listening to radio continues after the teen years.

Diversity Continues Strong

I’ve seen the advance numbers and they’re impressive. RADAR 107, which will be released December 13^th, shows radio’s array of formats appeals to a strongly diverse spectrum of Black and Hispanic listeners.

The categories of Black and Hispanic Adults 18-49 produced the most impressive gains against last year’s numbers, up 165,000 Black listeners and a whopping 834,000 Hispanic listeners.

Overall, the RADAR Report says that radio reaches 93 percent of Black and 95% of Hispanic listeners 12+ on a weekly basis.

Radio Reaches Educated, Upscale Adults

Radio’s favorite “money demographics” are healthy, too. Consider what the new Arbitron report says about these advertiser must-haves:

• College grads 18-49:  radio delivers 96 percent

• Adults 18+ with household incomes of $75,000 per year or better: radio reaches 95 percent

• And radio reaches, on an average week, a supremely bankable 96 percent of 25-54 adults who are college graduates and have household incomes of at least $50,000

RADAR (Radio’s All Dimension Audience Research) 107 includes data from 40 Arbitron PPM markets on a September-to-September year.

Here’s the bottom line we should all take from numbers like these:

Radio’s audience is not only growing – it’s doing so hand-in-hand with new technology.

Stop worrying. Go sell something!

MONDAY SALES BLAST: REAL-WORLD SALES GOALS

UNREALISTIC SALES GOALS LEAD TO SALES FORCE TURNOVER

We’re at that time when sales projections are being put together for the next month, quarter and calendar year. These numbers can cause all kinds of problems and misunderstandings between station ownership, management and the sales force so I’d like to share some information from my new book, The Zero Turnover Sales Force: How To Increase Revenue By Keeping Your Sales Force Intact. (Available at your local Barnes & Noble and Borders or, if they’re sold out, from Amazon in hard cover or Kindle versions.)

(End of cheap plug. I thank you.)

Sales budget numbers come from somewhere but sales people are often mystified as to where this might be. The source doesn’t always seem to reside within our solar system. So much frustration and unhappiness are created by wildly unrealistic monthly and quarterly sales budgets that some sales executives say it’s a significant cause of turnover.

Here’s the truth about unrealistic sales goals: they’re not goals, they’re wishes.

They’re the numbers that corporate wishes would come flying onto its books. They’re the numbers that their lenders and stockholders and partners wish would happen. If you look up synonyms for wish you’ll find entries such as dream, desire, crave and pine for.

Nowhere will you find doable.

           

You have to stand your ground on sales goals. It’s unfair of the higher-ups to foist unrealistic numbers on you and it’s wrong for you to hammer your sales people to attain them. That will only lead to complaining, frustration – and resignations.

Or to the ultimate indignity: being fired for not hitting numbers that are completely unrealistic in the first place.

Sure, be aggressive with your projections when it makes sense. But tell your bosses in no uncertain terms that you and your sales force know the market, you know what you’re doing and what you’re capable of. One job of a radio station manager in a corporate environment is to be a bulwark between the insatiable appetites of directors, shareholders and financial partners and your revenue producers.

To build a Zero Turnover Sales Force, the numbers have to come from this planet.

When you talk numbers with your sales people, be explicit about what you expect. Some sales executives like to use percentages and ratios to create sales goals. This often leads to misunderstandings. For instance, you might want a new sales person to write fifteen percent more new business each of the next three months. Fifteen percent of what? The current billing on that account? The budget for that sales person? The total number of accounts? The amount of new business contacts? The fillings in your teeth – what?

Better to specify a monetary figure. Translate that fifteen percent into a figure, write it down and have your sales person sign off on it. Now there’s no question about whether that goal gets hit: the numbers will be there or they won’t.

Every business needs sales goals. But make sure they’re attainable, mutually understood, real-world goals and not just another wish on Santa’s list.

MAKING MONEY ON YOUR INTERNET STREAM

MONETIZING CYBERSPACE REQUIRES BACK-TO-THE-FUTURE THINKING ABOUT YOUR RADIO SIGNAL

How do you get your radio? Eighty years ago, it was through a big console with a meaty speaker and beautiful wood cabinetry. Forty years later it was a transistor radio in your pocket or beneath your pillow. Twenty years ago: Walkman. Of course, car radios have been around since the 1930s. More recently, radio signals have been streamed on the Internet.

What’s the next primary device for radio listening? Your cell phone.

For an increasing number of radio listeners, cell phone reception of an Internet streaming signal is already the method-of-choice for daily listening. As more mobile device manufacturers roll out radio-friendly phones, iPads and whatever comes next, the number of people whose primary means of listening to the radio is their mobile device will increase exponentially.

Cell phone instead of transistor. Apple iPad in lieu of Sony Walkman. Blackberry rather than PC. Should this matter to local-market radio broadcasters? Sure. Because now we have more ways than ever to make money with our signals!

First, we have to get over the old way we think of our signal: console to AM or FM transmitter to radio receiver. Sure, that’s still here. It’s robust, mature technology and it isn’t going away for a long, long time. But even if you put out only one signal, consider what you can do with it now that you never could before:

• Extend your coverage area out to infinity
• Turn an AM daytimer into a 24/7 stereo station with exactly the same online coverage as a 100,000 watt FM
• Add print, photos and video to your output along with your radio programming
• Broadcast multiple events—even entire formats—simultaneously 

The last item is where it gets really good: You’re not limited to one “signal” per station anymore! With Internet streaming, you can have as many signals as you have programming and advertising to place on them. Of course, you can create multiple signals for HD, too, but this has many drawbacks, starting with the fact that very few consumers own (or can even find) HD-capable receivers.

With Internet streaming, you’re tapping into cyberspace, baby—a wonderful depthless Wonderland where almost every citizen of North America and Europe already resides.

That all sounds wonderful for big-money, big-group operations. But how can a local-market station justify streaming its signal? Where are the opportunities to turn that Internet stream into a raging river of profit? Diversity: Offer more than one Internet stream. Call them WXXX-2, 3, 4, whatever, or anything you like. They’re your streams. You can run anything you want on them.

For example:

Play-by-play sports

With one signal, you’re limited to one live game at a time. What if you want to cover more than one area team? What about playoff time when you might well be able to sell half a dozen games a night if you only had somewhere to run them?

By offering multiple Internet streams, WXXX-1 (streaming your primary over-the-air signal) can cover the local team. WXXX-2 can simultaneously broadcast another game. WXXX-3 an additional tilt. You're no longer limited by your single over-the-air signal. And since nearly everyone has some kind of Internet access, every fan can listen to the game of his choice.

Seasonal specials

At one my first stations, we made a killing selling and recording high school chorus Christmas concerts. A lot more could have been aired if we had had the time to run them on our one and only signal.

Long-form news and special events

Don’t want to devote time to entire city council, board of supervisors or other meetings? No problem: We have a signal for that—on the Internet.

Niche Programming

Two formats come immediately to mind: Bluegrass and Polka. Both are wildly popular with their loyal fans. Both are also pure poison to programmers. Streamed on the Internet as fulltime formats or weekly programs, they’re moneymakers, often attracting sponsors that wouldn’t otherwise be available to you.

Specialty rock and country formats and all varieties of talk lend themselves to Internet programming separate from a station’s regular offerings, too.

What about local schools? If your high school or community college doesn't have a radio station or Internet radio, let them have a good chunk of one of your streams. You'll be amazed at the variety and quality of programming they'll provide.

Four Key Ingredients For Profitable Internet Streaming

You’ll need all four solidly in place in order to turn a profit.

1. Promote – Cross-promote aggressively between your over-the-air signal and your stream(s) and on your main website.

2. Legitimize – Thanks to the efforts of Google and other major online advertising providers, local retailers are now being made aware of the value of online advertising. Let them know this isn’t second-best or something provided as a bonus: It’s legitimate, targeted, advertising that works.

3. Sell – Commit your sales force to selling the Internet stream(s). Remind them that they can include print ads as well as audio. Video, too, if you have the production capability. And don’t cut commissions just because it’s Internet streaming—pay the full load!

4. Be consistent – Don’t just try streaming for awhile. Your Internet offerings must be available over a significant period of time if they’re going to make money.

Plant your flag in cyberspace and wave it proudly—and profitably—by looking at Internet streams as extensions of your brand. And at mobile devices like cell phones and iPads as the new transistor radio/Walkman/PCs of radio listening.

LAGGARD BEWARE: “NEW MEDIA” ISN’T NEW ANYMORE

WHY AN INTERNET PRESENCE IS CRITICAL FOR EVERY STATION

There is an oft-told tale—probably apocryphal—of England’s tenth-century King Canute, who set his throne on the shore and commanded the waves to cease. They didn’t. The story is usually related to show what a boob Canute was for trying to alter the inevitable. But historians believe that Canute knew exactly what he was doing: showing that no leader, however powerful, was immune to progress. Enter the so-called new media, which isn’t very new any more, and the radio station managers who think they can do without it.

We don’t have to look back more than a few decades to find a couple of major radio groups that surrendered their FM licenses to the FCC because they saw no value in them. Some stations that did keep their FM transmitters lit up continued to broadcast in mono, though listeners and the record industry demanded two channels. Now, in an age when iPods and streaming media receivers of every kind dominate the media landscape, some radio station owners continue a Canute-like approach to Internet streaming.

That attitude will lead to intentional drowning sooner rather than later. Here’s why:

• Streaming on the Internet is how listeners will come to you more and more over the next few years.

• More than that: In the next 15 years, many stations think they’ll actually have more listeners tuning in from cyberspace than over the air.

• A recent study by radio equipment manufacturer Wheatstone reveals that over 61% of standalone stations believe they will have more listeners via “new media” by 2025 than those who tune in traditional radio receivers. Almost 55% of group-owned stations feel the same.

So, what’s the kicker? Those new listeners, stations believe, will not turn to PCs, Macs and laptops for their streaming audio.

For many stations, the streaming future appears to be through cell phone apps. Almost 20% of stations responding to the Wheatstone survey felt that was the media their listeners will primarily turn to within the next 15 years.  Others still cling to the hope that HD radio will be the future transmission standard in the US. In addition, mobile phone manufacturers are embracing radio streaming in their devices and within a very short time, it will be hard to find a cell phone that isn’t radio-friendly.

What, then, is a station that doesn’t even stream on the Internet to do? Start right now.

The technology that permits you to stream your signal is now robust and costs are reasonable. Performance rights fees will finally be settled—someday—although covering commercials voiced by AFTRA talent has been a concern. Still, for many non-streamers, these are minor matters. Local-market stations have no concerns about union talent. That leaves performance rights fees for music stations as a cost factor. That’s why we sell advertising: to cover costs of doing business.

I’m astonished at how many radio station managers still consider selling ads on their Internet streams to be difficult and not worth the effort. Also those who virtually give the time away as part of packages sold for their over-the-air properties.

Get this: In the brave new world new media—much of which is over two decades old, incidentally—you no longer have a signal. You have a product. A brand. And thanks to streaming technology, you also have more ways than ever to monetize your efforts!

Consider:

• Traditional commercials air on your RF signal
• You can choose to also air them on your stream OR sell different spots entirely, thus doubling your inventory
• Now you have visual ads to sell, too. Not just banners and boxes but video, just like TV. You are now the local Howard Stern—King of All Media!
• It’s easy now to air two OR MORE completely different program “streams”—one over the air and others on the Internet—with entirely unrelated material AND advertising (for example, CHR on the air, high school play-by-play on the Internet). Lots of stations do this already; automation makes it easy.

The only real drawback to maximizing profit potential on your brand is your vision.

Fifteen years isn’t much time when a hard-charging technology like Internet streaming and the devices that can receive it are concerned. Do whatever you can to get your programming on the Net. Then look at it the way station owners viewed their AM-FM combos in the 1970s: combine programming when it makes sense, split it when that’s more profitable.

WEDNESDAY: Ways To Split Your Internet Programming to Create Multiple New Advertising Streams

MONDAY SALES BLAST: EFFECTIVE RIDE-ALONGS

TURNING A MORNING WITH A SALESPERSON INTO A

MUTUALLY PROFITABLE EVENT

You do go out on calls with your salespeople from time to time—don’t you? I ask because in a time of dwindling staffs and overworked managers, time to accompany salespeople one-on-one seems to be a fading commodity. Whether you have a sales staff of twenty or two you’ll never get a true feel for how your station is being represented unless you hit the streets with individual salespeople. That’s the first trick to ride-alongs: simply doing them. The second is to make them worthwhile, which is where many managers miss some golden opportunities.

Contrary to widely-held belief, the purpose of a radio station manager's ride-along is not to check up on the salesperson. The numbers will tell you whether a person is really making the calls he claims to be making or seeing the decision-makers she should be seeing.

The real value lies in educating the manager about every client who's on the station.

It’s important not to make that ride-along call too early in the sales relationship, too. Certainly not on the first Client Needs Analysis visit. Probably not on the follow-up call when a proposal is first presented. Somewhere in the vicinity of call number three or four, when the relationship is maturing but still fresh enough to identify opportunities or issues, is perfect.

In this Monday Sales Blast, I’ll reveal three reasons why you should block out a few hours every few months to make calls with each person on your sales staff—and one temptation to avoid at all costs.

1.  Meet new customers/put a face to a name

You score major points with new clients when you accompany your salesperson on an early visit. Bringing “the boss” along just to say hello and show an interest in the business says two critical things to a new customer”:

• Your business is important enough to the station that the manager is taking the time to meet you in person
• Here’s the person who runs the station—you can take any problems straight to the top if you have to

There’s plenty of value to you as the radio station manager in getting to know your customers personally. When account lists are reduced to printouts of who-spent-what and how long it took them to pay, you take yourself out of the sales loop in a meaningful way. Look at your lists: Would you know some of these people if you ran into (or over) them today? Would you know any of them? What their place of business looks like?  What vehicle they drive?

If not, you need to get out of the station.

2.  Catch things your salesperson might not notice

You probably have been in the business a lot longer than most of your salespeople. Which means that your eye may observe opportunities or potential issues that your salesperson will miss. Things on the upside such as expansion of the customer’s physical plant or display space, which signals new products and more need to advertise.

Potential issues you might uncover include age and condition of inventory and fixtures that may speak to cash flow problems. And what about the training and attitudes of the customer’s employees: could they create customer service issues that even the best advertising campaigns can’t resolve?

3.  Provide an extra push in closing a sale—when appropriate

If your salesperson is having a problem getting a new client to “yes” or is unsure about how to handle a problem, your presence can make all the difference. Simply by showing up, you add an air of authority to the proceedings: you‘re the boss, you know the most and you can solve issues, perhaps even on the spot.

You also cared enough to make the effort. How many other stations can say that?

One thing you should NEVER do on a ride-along

Another way you can pitch in is to present a specific part of an advertising idea or proposal.

Warning, however: You are NOT there to take over the sales call!

If you’re going to be part of a presentation, you and your salesperson should work out in advance exactly when you’ll enter the discussion, what you’ll contribute—make it brief yet significant—and when you’ll step aside.

The salesperson needs to handle the presentation, not be stepped all over by you. You’re extra ammunition. Aim, fire, then step back.

A valuable manager ride-along boils down to three things:

1. Taking the time and making a number of calls
2. Orchestrating the involvement you’ll have in each call
3. Doing your part—then stepping back and listening

Lift your eyes from those sales call sheets and account aging lists and go out with your salespeople.

Oh, and if you carry a list yourself and think you’re so damn good—have them ride along with you sometimes, too!

AFRAID TO ASK FOR CREDIT REFERENCES?

TO AVOID COLLECTION HASSLES, INSIST ON CREDIT REFERENCES

Almost unique among small businesses, some local-market radio stations are still hesitant about asking new accounts for credit references. I understand the reasoning: business is harder than ever to come by and stations would rather take a chance than annoy new customers about their credit. That approach may have worked for decades. Now, it’s asking for collection problems. That’s because, in the present economy, the old “If they won’t pay you in 60 days they won’t in 90” has been supplanted by a new universal truth: 

Net 30 Has Become Net Whenever.

I was discussing this with a station owner recently. He said, “It’s fine for some stations to do credit checks but that would be suicide in this market”. (That’s what everyone says about every market, by the way, but let us continue.) “The local business people pretty much know each other. We know who’s a deadbeat and who isn’t.”

Really? Do you

• Read your customers’ balance sheets and have access to their bank accounts?
• Know all their professional and personal financial details?
• Have an accurate update on their personal credit scores?

Of course not. But while personal ethics may say that none of that is any of your business, if you’re going to sell them radio advertising, it definitely is.

We’ve all spent years patiently explaining to the unknowing that no, we aren’t selling “air”. We may be ON the air but what we’re selling is advertising—the wisest business investment ever and the only thing that will absolutely bring customers to them, if it’s done right. Selling “air” is worthless unless one is in the oxygen tank business.

But if you don’t value your product enough to insist on the proper business relationship of “product ordered” and “product paid for”, you’re automatically devaluing the time on your station(s) to nothing but the price of air. Which is free.

Look at it another way: If you walk into an appliance dealer and ask him to let you have a washing machine based on your word that you’ll pay his bill in thirty days, do you think he’ll go for it? Of course not. No matter how well he knows you that washer won’t clean a fiber of your clothing until you’ve crossed his palm with cash, a check, a credit card or a credit application—which will be checked and approved before the machine is delivered.

This is how business is done in even the smallest towns. The dealer knows that. You know that. No one questions it for a moment.

Yet when stations sell advertising based only on a contract (or, even worse, a verbal order) they’re saying “My inventory isn’t worth as much as yours so I don’t have to worry about being paid for it.”

Today more than ever, successful radio stations operate as solid business organizations, even if they’re operated by only one person. There are several ways to get paid for your advertising, all of them standard business practices. In order of preference:

1. Cash or check up front—with a discount, if you like
2. Credit card—the business’s or the owner’s, whatever
3. A completed and approved credit application
4. A signed statement right on the advertising contract that the client personally guarantees payment

If you use a credit app in a smaller market, you need basic info from three creditors: Business name, accounts receivable person’s name and phone number. Then, before one second of a commercial appears on your air, someone needs to call each of those references and politely ask: “We’ve been given your name by _________ as a credit reference. Can you tell me about your experiences with them? ”

Businesses share this information all the time. It’s routine. Most of the time the answer will be positive. Once in awhile, though, a red flag will be raised. When that happens, you have to go back to the customer and say, “We’re going to need payment up front for now, just to get you started. That’s our policy.”

And it is your policy, if you want to get paid in the current fragile economic environment. The cold fact is that any business owner who bristles at the concept of applying for credit or paying up front is absolutely going to be a problem down the road—and it will probably be a pretty short road.

MONDAY SALES BLAST: THE ONLY WAY TO FIRST-CALL CLOSE

A CLIENT NEEDS ANALYSIS CAN ALSO RESULT IN AN IMMEDIATE SALE—IF IT’S DONE RIGHT

What’s the first thing we always tell rookie salespeople when they’ve dug up a brand new client? Don’t try to sell anything on the first call! Do a Client Needs Analysis (CNA). Then return for a second call at which you’ll present a thoughtful, well-prepared and attractive advertising proposal. And that’s exactly what they should be doing. But what if—in the course of that CNA—your salesperson could actually set up a close for that very call? There’s one way to do it

Remembering A Cardinal Rule of Interviewing

Before I reveal how to bring home business after only one sales call, let me first establish an important ground rule: Your salespeople must never create a situation in which the client can say “no”.

I can’t think of anything less productive than going through the trouble of finding, approaching, meeting and conducting a CNA with a new client—then hearing “no” before that first face-to-face encounter is over. At all times, your sales team should keep in mind something that radio interviewers have known for decades: Never ask a question that can be answered YES or NO.

How do we avoid this unpleasant response? We construct a simple yet effective fill-in-the-blanks question instead.

The One Question That Can Produce A Sale The First Time Out

The first-call trial close I suggest belongs only one place: at the very end of the CNA. Ask every other question, clarify every fact, first. Then, as the last thing in the face-to-face fact-finding, ask The Question. Nowhere else!

Here’s The Question:

“If you were to go on the radio right now—today—what would you want to say?”

Throw it out there and shut up. There’s no way to answer “no” to The Question. So just sit there attentively and make the client answer.

If what comes back is “I don’t know”, your salesperson should run back through some of the key information gleaned in the just-completed CNA. This clarification can prove invaluable for the next call.

ON THE OTHER HAND: If the client responds with something specific like, “Our service department is the biggest in the area and they’re all factory-certified” – Bingo! Your salesperson just set up the client to set up his own sale.

Respond by repeating and emphasizing the words the client just spoke:

• So they’re all factory-certified?

• And nobody has the size service department that you do.

• That’s pretty important, isn’t it?

• You know, I was going to get back to you in a few days with some ideas but what you’ve just told me—why don’t I get something written and email it to you this afternoon? On the air tomorrow.

The client’s next response will probably be “How much?”. To keep the momentum rolling, your salesperson can respond with: “I’ll write up two or three different plans and we can talk about them. Right now, let’s just get going on the message you want people to hear.”

At the very least, your salesperson has a motivated client and a quick turnaround.

And if the client is so excited that he wants to do a deal right then, whip out the appropriate form and sign him up! But don’t just take the order and run. That’s the kiss of death and the cause of an enormous amount of client and salesperson turnover. Make it clear that this order will just get him started with a well-planned schedule of radio advertising.

Even though that new client gets on the air right away your salesperson should augment that first-call close with the same well-crafted, CNA-based follow-up that would have happened even if he or she hadn’t been so clever on day one.

TUESDAY: DON'T BE SHY ABOUT ASKING FOR CREDIT APPS OR PAYMENT IN ADVANCE.

BUYING A STATION: “McLEOD’S RULE OF THREE”

THREE MUST-HAVE INGREDIENTS FOR A SUCCESSFUL STATION PURCHASE

There is nothing simple (or cheap) about buying  a radio station, regardless of its location or financial health. In today’s market plenty of stations are for sale at prices that look inviting. But there’s a trap here for the over-enthusiastic. It will spring if the three most important factors in buying a station are overlooked.

It’s easy for first-time buyers to fall into that trap, too. That’s because, despite the down economy and proliferation of new media, the prospect of owning a radio station still carries a certain glamour, a bit of sizzle. And why not? When you turn on the station, wonderful sounds gush forth. It’s cool. Which is why when potential partners—especially non-broadcasters—consider joining a station buying group, one of the first questions they ask is: “What is your format going to be?”

My answer: “I don’t know and I don’t care”.

Establishing a station’s brand with its format is certainly important. But in the early stages of the hunt, it really doesn’t matter very much because format is one of those ingredients that you can always change if it doesn’t work.

There are three elements in the success of any station that are true make-or-break items. Two of them can be changed but not without large investments in time, money and blood pressure. The first, though, needs to be in place up front.

I call them “McLeod’s Rule of Three”.

The One-Two-Three Punch That Makes Or Breaks A Radio Station

Here are the three most important factors to consider when looking for a radio station. If these aren’t covered you’ll be looking up at the world from the bottom of a very deep well:

• MONEY
• MARKET
• FACILITY

Let’s take a look.

1.  Money

Fact: You’re going to need more money than you think you will. Maybe a lot more. It’s the nature of business acquisitions that expenses will pop up everywhere that were not apparent at first glance. This will be the briefest Rule of Three because it’s pretty black-and-white. Either you have a well-thought-out business plan or you don’t. Either you have more money than you think you’ll need or you don’t.

That said, there’s always the question: How much is enough?

Unless the station(s) you want to buy are pumping out solid cash flow month after month and their market looks like it can sustain and grow that level of business, the expenses of buying the station are just part of what’s needed. There are also operating and capital expenses. Simply put, operating expenses keep the lights turned on and people in the building. The capital budget is for equipment, construction and other things that will sustain and improve your business.

Twice the money you think you’ll need is not extravagant. Even more is prudent.

2.  Market

This means the size, location and economic health of the station’s primary service area. But it’s more than that. Put bluntly, there might be a reason you can afford to even look at that station right now, which is probably that it isn’t performing well financially. Does that mean it’s under-performing? Or is that the best it can do?

Knowing the difference can make you very happy or very broke.

If the station is under-performing financially, does its market-of-license have the potential for a turnaround? You’ll never perform more important due diligence than this. In an economic slowdown it’s more important than ever to ask hard questions and take long looks at any market you’re interested in entering.

You have to dig for the info you need. The local Chamber of Commerce is not your friend here. For it, the area is a corker of a business opportunity with a wonderful outlook—and did we mention the schools? Grab some brochures if you like but look elsewhere for hard, actionable economic information.

Many states have economic development departments or something similar. They’re good sources of hard information concerning an area’s population trends, spending habits and capabilities and employment. The U.S. Census Bureau is a fount of valuable demographic statistics.

Get your hands on as much information as you can. Dig deep. It’s vital to get a firm grip on how a market is trending. Yes, times may be a bit lean right now in the local business community but how should they be in three years? In five? In a decade? That info is at the heart of your business plan. (You do have a formal business plan, right?)

Another key element in deciding on a market’s viability is good old boots-on-the-ground personal observation. I know investors who only want numbers and don’t want to be distracted by how the place looks, how well the business district and residential neighborhoods are kept up, whether there are hiking trails or lakes. Not me. I want to meet the place in person.

A few days on stakeout duty will tell you a lot about your potential market. If the business district is attractive, it means a strong shopping environment. Remember, you’re going to live or die on that retail community. Chatting with business owners will tell you a lot, too. If they’re talking about the future in positive terms, that means a lot. Ditto if it’s nothing but gloom, despair and agony.

If the market doesn’t look like it will produce the level of business you need, there is always the possibility of upgrading or moving to a nearby market that’s healthier. It takes time, money, engineering and the FCC but it can sometimes be done.

Which brings us to:

3.  Facility

How well does your proposed radio property cover the market? If your stick is close or your wattage robust, you’re good.

If, like lots of FM licenses that have been granted over the last thirty years, your City of License is either a podunk hamlet or nothing more than GPS coordinates, your challenge is greater. Here is where a consulting engineer is worth his weight in gold. Same for actual in-person monitoring. Don’t trust coverage maps. Many operators have found that just because their signal contours appeared on a coverage map didn’t mean they actually had meaningful market penetration.

Simple rule: Go there and listen. If your FM signal is “fringe” or your AM swims in static, you’re going to struggle against all the nice clean signals in your market.

BUT THE BROKER SAYS THE STATION HAS BEEN UPGRADED!

Great—probably. A number of stations on the market now are listed as having recent upgrades to transmission facilities, studios or both. That’s a common way to improve a property’s value at sale time. Upgrades could save you time and money. OR create headaches if they aren’t done right. There’s a reason a station under-performs. It could be the economy. It could also be the current ownership!

Apply “McLeod’s Rule of Three” to any station acquisition you’re considering. There are good deals out there right now. In fact, this is one of the best times in history to buy a radio station IF you know the right questions to ask going in.

It’s like when a savvy investor asks a broker, “Okay, this stock is cheap. But is it a bargain? Does it have value?” You can always play with the format later on.

MONDAY on The Monday Sales Blast: How your salespeople could close a sale even though they’re doing a Client Needs Analysis!

ALL-CHRISTMAS FORMAT’S SURPRISE DEMO

BING AND HIS BUDDIES’ MOST ENTHUSIASTIC FANS ARE—WHO?

I recently spoke with a friend who has been an air personality—a terrific one, I might add—at a major market soft AC station for many years. This station does very well year-round and, like many of its format ilk, plunges into an all-Christmas music format around Thanksgiving. In fact, it’s already starting. What’s newsworthy about that to me and to radio station managers in any format is how the station’s demographic alters when White Christmas and the rest begin to roll.

Want to take a guess at what consistently turns out the be the most enthusiastic and appreciative age group for Chestnuts, Rockin’ Around the Christmas Tree and all the rest? (No fair if you already air the format and have discovered this yourself.)

According to my friend, the soft AC jock...it’s Generation Y.

This demo is loosely defined as people born between about 1986 and 2000—in other words, 10 to 24 years of age. The children aside, what my friend has observed is that listeners in their late teens and early twenties—definitely not your average soft AC P1 demo—flock to the all-holiday format every year about this time. Yes, the same bunch that normally listens to everything from Death Rock to Keith Urban loves to hear the good old Christmas classics, at least for a few weeks out of the year.

Why on earth would this bunch, which was virtually raised on iTunes, get excited about the same old holiday retreads? Ask the air personalities who work the format.

In this case, my friend’s view is that these kids welcome holiday music as a pleasant change from their usual instant-gratification diet of iPod fare. Perhaps, too, a little touch of homey normalcy to an age group that may be the most heavily-scheduled, stressed-out bunch in history. (I have an 18-year-old. I'm right in the thick of it.)

That prompted me to cruise over to the iTunes Store and see what was cooking for the holidays. A lot of holiday music, that’s what! They’re offering a package of up to 20 Christmas and holiday song downloads free for a week. It’s called iTunes Holiday Sampler and includes artists such as Sarah McLachlan, Amy Grant—and who wouldn’t want to fire up We Wish You A Merry Christmas by Weezer?

Not to be outdone, Amazon is also offering some free holiday music downloads through its MP3 store.

So, obviously, Gen Y has plenty of holiday ho-ho available for its MP3 players. But the news to me was that they’re also ready and willing to actually listen to the radio (and to a station they might well never sample otherwise) to help get in the holiday mood.

Which, of course, is solid platinum for sales.

Let’s see, with soft AC (the most common format employing the all-holiday music format, though by no means the only one), we have:

• A large core of steady, loyal listeners already in place
• Incredible TSL numbers, much beloved by Arbitron’s PPM
• And a hefty side dish of unexpectedly young listeners who sample the format

Give me a list, I’m hittin’ the street!

I still don’t go for lighting up the all-Christmas format even before most listeners are lighting up their holiday displays. As I wrote some days ago in this space, it borders on overkill, which will dependably kill an otherwise valuable format. But my friend’s observations about the attraction of Gen Y listeners to the format does make it a solid temporary format—providing no one else in your market is doing it, of course.

There’s only so much room for Bobby Helms.

THE BEATLES ARE ON iTUNES: IS RADIO’S TURKEY COOKED?

WITH THE ”FAB FOUR” ON BOARD, APPLE EXPECTS HEAVY DOWNLOAD ACTION FOR THE HOLIDAYS—WHAT DOES THIS MEAN FOR RADIO?

Prior to 10 AM EST yesterday (11/16/10), Apple’s iTunes music download store contained many power groups and most of music’s iconic names. But one group whose music customers could never download was The Beatles. Now, they can. The Fab Four’s music is available in the iTunes store for the first time and it’s likely customers will burn up the bits grabbing everything from individual tracks to iTunes albums to the entire Beatles boxed set between now and Christmas. For radio station managers, the development again raises the question: “Is owning a radio station going to become the equivalent of owning a livery stable? The answer: of course not.

Apple’s iTunes venture has certainly changed the way music fans acquire their tunes. All it takes now is a couple of clicks, a credit card and an mp3 player and nothing but favorite tracks will spew into those little white earpieces all day long. No further need for music radio, right? That’s what a persistent Greek Chorus of radio’s naysayers intones. It’s easy to jump on their bandwagon and some in the industry have already done so.

Not the smart ones, though.

LOOK AT THE LAST 80 YEARS

Eighty years ago radio was cutting-edge technology. It provided instant (as soon as the tubes warmed up) and free (at least in the U.S.) access to entertainment and information. No technology since has been able to kill it off.

Talking movies didn’t do it.

Television didn’t do it.

Color television didn’t do it.

Movies on VHS and DVD didn’t do it.

The Internet didn’t do it.

The radio industry hasn’t even managed to kill itself off, although some might say it has tried.

iTunes won’t kill it off, either. Not even close.

WHY RADIO IS ALWAYS IN PLAY

Look at what iTunes can do that you can’t:

• Offer millions of tracks on demand
• Get paid directly when someone downloads one

That’s a lot but that’s all.

Here’s why even music freaks who load hundreds of tunes on their iPods consistently say they still turn to radio:

• Entertainment, as opposed to just music—meaning interesting, funny, relevant air personalities and program material
• Information—you can’t download up-to-the-second news, weather and traffic information
• Companionship—any idea how many people are listening to your station(s) right now because they have no one to talk to, are ignored or just plain bored? The number is huge

So here’s the question: What have you done to make your music format relevant? Is it entertaining beyond simply playing the music?

Do you provide local news and other information, not just recorded community calendars and PSAs?

Can listeners tune in someone who sounds like an actual person or is it Segue City with liners in between?

THE MANAGER’S BOTTOM LINE

No music download system—no matter how customized, no matter how convenient—will replace radio providing that radio keeps itself entertaining, informative and companionable. iTunes can’t be that—only your stations can.