MORE ON SMALL TOWN SELLING
Being in a large market, I am a bit handicapped on giving advice on small town sales. I had a very enlightening lunch with a media owner this week. We talked about that very thing.
If you want to offer any sort of campaign for the economic health of your town on your LPFM, consider 'Shopping Locally'. It's a tall order given the local business lacks the selection and likely is a bit more expensive but every sale is a gain and turns the tide a bit.
I was in the town where this media owner operates only 9.5 years ago. Seeing it on Monday, I was shocked at all the vacant storefronts. I got insight on what happened.
First, Walmart is now 30 minutes away or less in 3 separate directions. In the past 3 or 4 years both Family Dollar and Dollar General put up stores in the town. Now more than ever, folks are buying online from vendors like Amazon. And Dollar General and Family Dollar are filling in with smaller and smaller towns. They just don't need a big population to draw from.
There's more media around too. The biggest thorn is the aggressive selling of a shopper newspaper mailed to every address in a 3 county area. It is really tough to counter reaching listeners in the local area (the number being your best guess) versus a bulk mailing to 3 counties. The potential client has to be educated to even get to first base. The merchant sees 800 versus 25,000, not that 80% are out of the trade area and will never be their customer or that 90% of those mailed hit the trash can unread. In fact many small town papers have consolidated with the company offering buys for every town around at a group rate.
But that is just the second fight. Like LPFM with the limited reach in listeners, the small town merchant has the same limited numbers to work with. In a nutshell, the lines between profit and loss have always been uncomfortably close for the small town merchant that has to make it off their trade area, say of 20,000 against, say, Walmart's 100,000. If Walmart needs $5 profit from everyone, the small town merchant needs 5 times that. Simply put, every sale they lose to a national chain or online lowers that profit line closer to the loss line. Your finite customer base dwindles and cannot be replaced for every purchase made elsewhere. Compare any small town pre-World War II to the present. Once the highway system made travel easy, towns died and they mostly die more each day. And when the grocery store closes, you're in a world of hurt because Walmart likely sucks off the rest as locals end up grocery shopping there and then buy everything else there too.
So, what has happened is for the small town merchant, the line between profit and loss has come so close together, it's just not worth it. Or it is no longer possible to make a living wage.
This reflects in media. The national chains don't advertise. The small town merchant that could advertise has no surplus to advertise with. They resort to Facebook asking customers to share, knowing they can't control content and hope those they share with might become a customer. The price they pay is zero dollars and that is their entire advertising budget.
I know this sounds really gloomy but it is the reality. In fact this media owner who once pulled in about $100,000 a year 10 to 12 years back was down to $38,000 a year. Specifically this is a market of $36,500,000 in retail and service industry sales that has used radio and a 60 dbu of 6,200. And it is not getting any better. The sole reason the bulk of those dollars vanished is that customer went from buying from the local merchant to going to that national chain store or online to buy. In short, buying habits changed. The reality is advertising didn't make a difference.
So, to survive, the media owner cut expenses and features they once offered like live and local and local news. They got lean. In sales, they targeted the smallest of businesses, especially the part-time or hobby business. This media owner found if a business could spent a few dollars a week, although tiny, there were many of these and they stuck with you like glue. In short, they targeted the business that is in the same boat they're in and fully understand the need to support each other. For this media owner, these are the businesses too small for that big shopper to even call on because they could never afford to consistently advertise. For the rep at that shopper, they can make more commission at bigger businesses with the same amount of effort and work.
So where does this leave LPFM with a tiny fraction of the listening public the full power station has? It leaves you going after those in the same boat with you, taking small change, getting a bunch of them on doing underwriting, knowing it all adds up to the dollars you need. You own that market because nobody else is interested and your LPFM, being the good and decent station you are, gives special attention and access to the smallest of the small with actual trade area marketing.
It says something else: you had better be online too! Facebook and your own website along with radio are essential. If you can't offer all three, it is even tougher. Businesses believe they need to be online at as many places they can be.
It means selling cheap, taking what you can get and replicating that plan over and over again. You had better like people and visiting. And you had better be in the position of going to your underwriter versus out of town, online or the national chain for what you need whenever you can.
Really, it's an ideal fit. The little LPFM and the little business. Together you won't set the world on fire, just keep the fire burning for both of you.
FACEBOOK VERSUS RADIO
This might have happened to you. You go to see that small business about Underwriting and they say they don't buy advertising. They use Facebook to advertise their business. Is it just an excuse?
The answer is yes and no. The fact is many in business and many folks selling advertising and underwriting simply do not understand how marketing a business works. And also, yes, it is an excuse because it tosses the salesperson for a loop. Really, how do you answer that? Let's try.
Have you ever searched for a business or person on Facebook? Will you because the business asks you to? You're already in the business, so what's the point? After all, the only ones looking at that Facebook page know about the business. Facebook is a good tool to increase frequency of customer visits but not so good at bringing you new customers that don't know you exist.
So, your answer is: Facebook is a great resource. It helps to increase customer frequency. Media like radio helps to build awareness of your business among all those people that don't know about your Facebook page. In fact, if you watch TV or listen to radio, many smart advertisers use radio and TV to introduce the potential customer on where they can learn more about their business, whether it be the company website or Facebook.
If you do nothing but Facebook, you are preaching to the choir, not building your customer base until you tell those who don't know about you where they can find out about your business. Underwriting builds awareness.
This demonstrates the important of a station website and Facebook page. Your online presence has value to potential underwriters. And the FCC does not regulate content online. Underwriting rules do not apply online. Remember, the greater the number of places a business can be found, the better because each source reaches more people and that is the whole idea, to reach people. When you can offer a Facebook post, website listing and on air Underwriting, you really have something of value, even to the business that does not advertise but uses Facebook for all their marketing.
If you get the excuse, it might just be a way to throw you off. How you handle it will determine how interested the potential client is in hearing what you have to say. In sales you learn a business owner might try to baffle you with an excuse, to get you to give up on them, but if you have an answer they become intrigued and figure you must be offering something they should hear about. In other words, if you answer the excuse, you're worth the business owner's time and respect.
MAYBE A GOOD SALES IDEA?
Granted this was a station in a town of 40,000 that reached several smaller and ignored towns in the county but it is perfect for a LPFM is a more rural setting.
The reason we selected this was because it was easy. There was no copy to write. There was little follow through. It was so simple to execute a monkey could do it. And it was a breeze to sell.
These towns had their own schools. We asked either the head coach or principal to do a weekly call in on the morning show at a certain time and day each week, say, 7:20 am. If they couldn't do it live, they could call in and we'd record it.
We called every business in the towns where we did this. The biggest town had 36 businesses. In that town 30 businesses bought. In the town where I called on people, I got 32 of the 34 businesses (that town always felt slighted by the bigger town) and where my cohort in sales called on folks, she got every one of the 24 businesses to say yes and one even upgraded to sponsor the school's lunch menu each morning...yep 100% participation in a town of under 400 souls! Can't get any better than this and she even upgraded the bank with school lunch menu sponsorship for an additional $150 a month.
These towns ranged from less than 400 to about 850 in population.
The 5 minute segment had school news, sports and announcements. In fact, given the activity at the school in summer kept the program on 52 weeks a year. If the day fell on a holiday, like Christmas, it was missed.
This was 1992 and 1993 when we did this, but we charged $49 a month.
For that $49 you were mentioned 100 times in promos (we mentioned about 8 or more sponsors in each promo) and promos ran 24/7. The average was 300 promos a month at 30 seconds, so about 10 a day. Promos were a breeze: "Tune in every Wednesday morning at 7:20 for X town school's head coach for a summary of school news, sports and information you need to know. It's made possible by these community minded businesses...". In addition, we mentioned every sponsor at the start and the end of every weekly phone call. Yes, it was a long list.
I say we gave mentions. The mention was the business name only. If we had to clarify the type of business, we did so (ie:Tangelz: Tangelz Hair Salon or Miller Brothers as Miller Brothers Department Store or EZ Stop as EZ Stop Convenience Store). No phone number, address or such was added. These were small towns where locals knew each business.
The amazing thing was nobody cancelled and people weren't late sending a check. They were grateful to have the attention and they sent that check because it is so important to support the youth in small towns.
We played on the 'ignored' aspect. You see, if you are in that suburb with a local school that never makes the papers or has media talking, then you can give a voice weekly and every small business owner with a kid at the school or gets some business from the school will want to have their name attached. If you are in a small town and don't have much luck selling Underwriting, this might be your saving grace.
For the group of LPFM operators that don't care to shine a light on the marketing benefits of building awareness with Underwriting, you can try this and not lose sleep over it. You are providing a voice to a voiceless community and school that wishes to be heard and you get financially rewarded by businesses that want to be sure that voice continues. Those that said yes did so to support their community and school, not to make the cash register sing.
So, find that school, figure out that sweet spot that lets virtually all those local businesses participate and get started. Hint: talk to the local bank first. Bankers are known to make wise business decisions and most local businesses trust them with their money, so when the bank says yes, those that might be on the fence will be convinced by the bank being a sponsor.
By the way, at this station, a new start-up, we really trailed the heritage AM and FM in town as far as billing went. They got the buys and we were trying to get on the buy sheets. We found this plan gave us about 25% of our average monthly billing at that time. Best of all, it gave use the time to work the bigger fish and try to hook them. Even as we did, we never forgot the little guy that helped us and we continued the weekly features. After all, it was such easy revenue and required so little work on our part, why would we have ever dropped it?.
WHEN A COMPETITOR PLAYS DIRTY
It is likely going to happen. A competitor is going to tell everyone your station is nothing. When it happens, it is about like being punched in the nose with no clue it was coming. It is how you react that makes you the winner.
The first time it happened to me I simply didn't know how to react. The potential client repeated what the station had said about the station I worked for and I was like a deer in the headlights. I figured honesty would be the best policy. I said it was the first time I ever heard that one and I wasn't sure how to respond to the claim. Since this was my visit to learn about the guy's business. I asked if we could talk a little about his business. We had a nice conversation. I promised to return.
When I got back to the office I went to the station owner's office and told him what happened. We talked about how I reacted and he felt I did the right thing. He said I needed to respond properly. He had a nice little line that said "When a competitor has to cut down others to make themselves look better, just how good is the product they're selling?"
I modified that in dealing with this client because I felt my response better fit his personality. I told him that in response to the competitor's claim that I was a poor choice, I would only deal in facts because that was all that mattered. I told him I would never try to make myself look good by making a competitor look bad because my station deals with facts and facts do not need to be defended. I said it was my opinion my station and his business were a good match based on our earlier conversation and I apologized for the other station wasting his time on this matter.
In saying this I simply elevated myself over my competitor in his eyes. My credibility went up a few notches.
We explored their claim. They said they had the most listeners. The truth is they likely did but they were mostly under 25 years of age. My station was the adult station and his product for exclusively for adults. I suggested listener numbers mattered less than the right listener that could be your customer. Our target was adults over 25. I told him his business was targeting adults over 25 years of age. He agreed. I said the number of listeners is not the question but the station with the over 25 year old listener he was trying to reach. He knew my competitor was the rock and rhythmic end of top 40 and my station leaned more adult contemporary with local news.
We wrapped up our talk and were talking in the reception area when the salesperson from the other station walked through the door. The business owner was asked a quick question by an employee. As he answered the salesperson from the other station began to berate my station to me. The owner of the business heard this. As soon as he finished answering the question, he looked at the salesperson from the other station and told him to leave and not return until he could act like an adult. The fellow exited.
I felt compelled to say something. Maybe I should have stayed quiet. I said I gathered their salesman was frustrated, making lots of calls and not getting many saying yes. He said maybe so but that's no excuse. He told me he looked forward to working with me. By the way, I sold him a local news sponsorship, ideal for his business.
This scenario only happened once in all the places I called on over the years. It was so rewarding to see the other guy being told to leave. I faced the same question quite a few times.
The point of this is to offer a solution for an answer to the claim your station doesn't have the listeners. You don't need to answer that question because it doesn't matter. Results do. And only results matter. It's your opportunity to rise above it all and be the station the client wants to work with, if for no other reason, you don't play dirty.
By the way, a few weeks later a client said a competitor claimed I had few listeners. I smiled and said it amazes me how people with try to tear down others to make themselves look good. Then I changed the subject. It was never mentioned again.
LPFM RATE CARDS
I was curious. What are LPFM stations charging for Underwriting? The best answer is it varies. Because many LPFM stations do not have people involved that worked dealing with business owners each day, very few stations have what I would term an effective rate card. Few have any packages. There seems to be little thought given cost versus audience. I tend to be an advocate of the customized plan for each business fitting their business to the attributes of the station best suited to their business. To do this, there is no 'one size fits all' rate card but a variety of packages in several price ranges.
Mr. O. K. Walters pays close attention to the numbers. He looks at the total people reached and the typical percentage of that number that listens to his format choice. Then he compares typical time spent listening to calculate a probable number of listeners that hear the Underwriting each time it airs.
In Mr. Walter's package, he determined many local businesses purchased a certain size ad in the local paper in his service area. The monthly cost of this small ad is the basis of the cost of his Underwriting Package. He so wisely chose a monthly dollar amount that works for virtually every business, then the number of Underwriting units was determined to offer comparative if not better value for the dollars spent.
Of every LPFM media kit I have seen, there is either a flat rate per unit with a potential discount for a larger number of units a month or year. Way too many stations offer two credits or three in a specific show once a week as the only option.
SOME ACTUAL RATES
A few stations offer a package. Mostly it is an Underwriting unit that is not defined but airs hourly for an amount per week or month. I say 'not defined' because you aren't told if you get a mere mention of the business name and maybe phone or address or a full Underwriting unit. The popular rate is $50 a week.
Rates are all over the place. In a tiny town it's $100 a year for Underwriting. The station runs 3 Underwriting units an hour. Usually they have 12 underwriters so each Underwriter is heard every 4 hours around the clock.
In a community of about 2,000 one station charges a flat $6 but offers a 10% discount if you buy more than 3 per day.
Another station charges $15 during the day and $10 after 7 in the evening and they only reach about 2,000 people.
Another station serving about 2,000 charges $20 a month for one Underwriting unit every 6 hours around the clock. They have about 36 takers.
Of LPFM stations I have seen, those reaching about 25,000 to 40,000 in their 60 dbu charge much less. One station offers 2 units a day, social media, website banner ad and their name on all printed material the station hands out for $1,400 a year. Add a third spot a day for an additional $575.
I like a town of about 7,500 that charges $2,299 a year for 4 units a day, 7 days a week. They offer sponsorships of news, farm reports and other features. What I like is they offer options like a commercial station. That is good because the business owner only views you as an option for getting the word out about their business. They don't distinguish between commercial and non-commercial. If we try to make ourselves different we reach a point we are misunderstood and the business owner opts for what they understand. The key here is speak the business owner's language. It is no different that explaining something to a child. You put in some thought to how you explain it so they can grasp what you are telling them.
A station reaching about 6,000 sells 6 units a day, 24/7 for $1,250 a year.
One station serving about 500 only sells by the hour. You can buy one hour every day of the week (the same hour or varying times) for $250 a month or $20 per hour as a flat rate.
A Christian station offers program sponsors (Focus on the Family, morning show, etc.) for a minimum $1,000 a year. It doesn't matter if you choose a once a week show or a daily 4 hour show, the rate is the same.
Another Christian station runs 3 features 5 times a day Monday through Saturday running 6 am to 7 pm. We are talking a community calendar and things like this. $100 a month gets you a short unit next to the feature (you get 18 a week).
Some satellite Catholic LPFMs offer big frequency for a tiny price: 12 at 15 seconds or every other hour, 24/7 for $75 a month, minimum 6 months. Another offers 10 to 20 thirty second units a day for $1,100 a year. It seems it doesn't matter the population served. As explained to me, it worked for one station very well, so everybody is following that model.
I like a full power non-commercial Catholic station's Business Card: 2 a day for $50 a month. You are bunched in 3 clients per unit. You get a fill in the blank: Joe's Auto Repair on Second Avenue in Pleasantville. No street number and no detail.
A Christian music station for $20 a month gets you the business name and your physical location or the phone number if you don't have a storefront. If they need to add wording to describe what the business is, they do this to clarify. You can get up to 24 a day. They each about 10,000. The average buyer gets 5 a day for $100 a month. Here's an example: "Garcia's Mexican Grill at 423 Highway 100" or "Joe's Mobile Auto Repair, 226-9988".
An oldies station reaching about 6,000 charges $3 per Underwriting unit of about 20-30 seconds. Minimum 15 spots. They do really well, over 700 units sold on average each month. The average client spends $75 a month.
A non-commercial full power that has a county survey to prove they have about 4,000 unique listeners offers mini-underwriting as they term it. You are lumped in a unit with up to 4 others. It is technically a 10 word spot as you would count a classified ad (a 10 digit phone number is 1 word and 423 Main is two words versus the audio 4 words). Each unit is adjacent to a newscast or some other desired programming. You have to buy an annual plan and you get one a day for about $135 a month. Their 20 second unit is $27. They have very high Time Spent Listening: 4,000 listeners times 7.5 hours a week. These guys are the only local station with the only local news. If you ever wanted to hear a great local station, this one is a 10 for me. I am very impressed.
Another station at about 11,500 people in their coverage charges a graduated rate: 20-25 seconds, minimum 20 units: $4 each. At 51 units the rate drops to $3. Buy over 100 and it goes to $2 each. They're the only station I have seen that actually has defined online and on air package deals. Mostly you get 10 to 20% off on a package. They get that radio is not just radio but that listeners are online, on Facebook and read email.
There's the station that offers 10 second units: 3 a day 6 am to 10 pm at $1,000 a year. This station targets two towns of about 1,500 population each.
I like this successful NPR affiliate: about 45,000 in the service area and they have documentation of about 1,900 regular listeners at about 4.5 hours a week. Sponsor a newscast or feature, depending on the time $15 to $25. Packages: 2 per day Monday through Sunday 6 am to 7 pm $8 per 15 second unit. But buy 2 a day 6 am to Midnight and the price is $4 each. All units play at different times each day. You can buy by the week. They average $10,000 to $11,000 a month in billing. Running the numbers, they charge about 12 cents per listener that hears each Underwriting spot. They have add-ons for online.
There is one station that single spots their 5 second underwriting units at $1.40 each. They super serve a small town. The typical station around there charges about $5 for a 30 second and $7 for a 60 second commercial. They have 7 units an hour scheduled and they can play 6 am to 10 pm. After 10, they are bonused. The town is about 2,000 with about 15,000 in the county that is mostly covered by the LPFM.
If you really want to do some figuring here, the key is to charge what most businesses can afford monthly. Whatever you offer, the total price is what matters. If that's $25, $50, $100 or $200 a month, you need to be in that sweet spot. From there you need to run numbers. You might not know how many actually listen but I'd start with that population in your 60 dbu. Next I'd look at programming. Look at Nielsen Ratings in the big city near you. How does your format do? Let's say it is classic rock and the classic rock stations combined have about, say a 9.0. If you can get the 'time spent listening', great. Likely it is about 2.5 hours to 3.5 hours a week.
Let's run an example: You hit 10,000 and 9% listen to classic rock. You have about 900 listeners. At 3 hours a week, that's 2,700 listener hours. Now divide by 7 days. For ease, let's say 400 a day. Given 2/3rds of listening is 6 am to 7 pm, take 2/3rds of 400 and divide by 13. That gives you roughly 10 listeners hearing any Underwriting unit you air 6 am to 7 pm. A fair rate would be around $1 per Underwriter unit.
Let's say the 'sweet spot' is $60 a month. I'd offer 2 units a day 6 am to 7 pm, 7 days a week for $60 a month.
That 'sweet spot' will come to you. Peruse other media. See what businesses are spending. At some point it will dawn on you there is a popular size ad in the paper, etc. that many people buy. Ask the media outlet the cost and compare it to what you have for listeners (your educated guess). That price is your monthly rate and you now determine how frequently you must air the Underwriting to be heard by the same number of people.
Caution: Newspapers include out of county readers in circulation and consider each paper read by several people. A paper touting 6,000 readers might really have 2,000 subscribers and only 1,000 in the county, so that 6,000 becomes 1,000, the figure you use to figure how many units of Underwriting you offer for the same dollars.
In October the US Postal Service requires all Newspaper Class postal permit publications to publish a breakdown of circulation. It is called "Statement of Ownership, Management and Circulation". You get total printed, how many go out of the county, how many are in county, how many are sold at newsstands and how many go by other classes of mail. The in county and newsstand figures combined is the number you want to use to compare. Most of the 'other classes' are to ad agencies and non-subscribers.
TWO TOWNS LOSE THEIR PAPERS
I offer this analysis to demonstrate the 'business' and 'operating' end of media. In essence, your LPFM is an audio version of that weekly newspaper every day.
I know these towns. I've met the publisher and spoken with her a few times. You might say I had a little insider information. It has been nearly a decade since I was in either of these towns.
The publisher ran not one but two newspapers. One is a big enough job. You have school board, city and county meetings, lots of school events, lots of local clubs and groups and plenty of businesses to see to sell advertising. And that's just one town. Now double the workload. You can bet this is not a 40 hour a week job but rather a 7 day a week job. There's no week off for a vacation at a 52 times a year paper, much less two. And if you do take a week off, it's without pay.
The work doesn't change if the money is good or if there's not enough. Sure you can get a little help here and there and if the money is flowing, maybe a part-time employee or two.
It's not the number of employees that spells your success but rather your skills at doing it all. And even with employees you add more to your plate.
These aren't big places. One town is just under 1,600. There are just over 2,900 in the primary coverage area. The second town is just under 1,400 with just under 3,300 in the primary coverage area. In short, there's not enough people served to have fulltime employees if you want a paycheck that might be equal to the average employed person in the area.
The retail sales is barely more than 25 million dollars in the town of under 1,600 and almost 11.5 million dollars in the town of just under 1,400. There are 176 businesses.
Sure, the publisher might have awakened one morning and said to herself, "I can make the same money for a 40 hour work week with benefits and a paid vacation". Imagine time with family, kids, husband and just doing nothing without something looming on the horizon. It is a pretty sweet image after years of hard work not matter how passionate and driven you might be.
She was a success. She had the personality to do this. She is warm and friendly. She is smart and not a push over but had the delicate dance of power down pat. She could be heard without ruffling feathers. She knew how to get what she needed without stepping on toes. In the culture of one town, she knew how to befriend without selling out. In short, one of those towns was still run by the ancestors of the original settlers, so such a town usually had the 'good ol' boy' style of government where local person does good is celebrated but an outsider is watched like a hawk and not given a break. She knew the ins and outs of being just enough 'good ol' boy' without selling out, if you will. Plainly put, one slip up and you're done.
When I was exploring towns for a possible LPFM she warned me one of the towns would embrace me with open arms and the other town wouldn't. She lived in the town that wouldn't. I am grateful for her insight.
From what I could gather, she was pulling in around $1,260 a week in ads. She had around 1,100 subscribers producing about $36,300 a year. I'd say she was taking in almost $2,000 a week including subscriptions.
That's not much money. She had an office off the square in downtown. I'm thinking at least $1,000 a month including all the utilities.
Like most small town papers, they used a printer. Consider the cost of printing and then the cost of postage to mail the papers and you easily swallow up all of the subscription price, likely a little more than that. At a bare minimum you are talking a good $48,000 going out the door. I'm guessing here, but I suspect that all said and done it cost about $75,000 a year to operate. That leaves about $36,000 less taxes and matching social security for a salary. Take home is about $2,100 a month. Much of that $500 a week is mileage.
These printers are big operations with high volume output. You see, you contract with them and you are designated a time and day each week. This is your time on the press. Don't meet the deadline and you pay but get no paper. You meet their deadline so the support staff can set it all up. You use a program on your computer that they use. You email the edition to them. They print, usually fold and for most, address and assemble the papers in the way the post office requires for the Newspaper class postage requirements. It's fast too. You might have a deadline of 3am on Tuesday and you'll have your paper ready for the post office before 10am on Wednesday delivered by FedEx with that by 10 am next day charge you add to the printing fees. Your edition is on the streets by noon Wednesday.
The thing about printing is the cost is more about the set-up rather than the quantity printed. You might be able to print 10,000 of an 8 page paper for the cost of 1,000 of a 16 page paper. So, she had to make her typical 10 page at 1,100 copies work for her to make the dollars work.
To accomplish this, the front and back page were exclusive to one town. The inner 8 pages were news and ads that were of interest to both towns as they were only about 18 miles away as the crow flies. She told me that by doing this, she saved $550 a week on printing. In other words, if she printed 2 unique pages with 8 common pages she saved $550 over doing 10 unique pages for each paper. Thus, between the two papers she paid setup on 12 pages versus 20.
My point is she shut down both papers and took a job in a related field. Why? Was it the long hours without a rest? Maybe it was. It might have been the economy.
If you know where to look, you can find sales figures for businesses. I looked her papers up. At one point they did $120,000 combined. In one year they did $63,000 combined. That is a huge drop.
Let's dig. I find it interesting that the banks in the towns, including surrounding towns (almost every one) had their banks change hands. In every instance it was not a local bank buying out a bank in the next town but rather the bigger banks gaining a new location. If a bank is in trouble, the FDIC really likes a big bank to step in because they can absorb and honor a bad bank's obligations without much more than a bump in the road. The bigger banks are akin to a chain store, even if it's just regional.
If you drew a triangle between the regional shopping hubs, these two towns and one other have newspapers. For this publisher, she shut down her papers but the third town sold theirs to a new publisher.
So, why did the banks sell and the newspapers fail or sell all around the same time? My answer is a localized economic crash. I can't find that crash but it appears very likely this is why the papers closed up. All I can see is the only national chain in either town is a Dollar General store that opened in each town shortly before the papers folded. Dollar General sort of does what a Super Walmart does in a bigger town. It takes the mom and pop to the edge. You see the Mom and Pop store has a very slender profit margin in general and a 10% drop in business can kill that business. Even so, I do not see a big change in the businesses operating in either town, so maybe the impact was not that bad.
Now there's an opportunity in both towns that paid $5 a column inch for ads and about 550 in each town that paid $30 a year to get a local paper. The average advertiser was spending $60 a month.
Those are not terrible figures. Sales is about $1.795 per $1,000 in sales spent in the paper. With almost 50% of each paper going out of the primary coverage, that means a combined 550 copies out of 2,650 households.
What is good is about $2 per $1,000 in sales spent with the paper or radio station. Circulation is considered good at about 20-25% of households. So, she was about 10% lower on ads and slightly above average on subscribers.
Please note these are not dead in the water towns full of abandoned buildings. These are vibrant communities with active Chambers of Commerce and most every building maintained and rented in downtown.
THE COMPARISON SHOPPER
I got an email from a LPFM Operator trying to convince a client to buy Underwriting on his station. The client began comparing the station to the area print offerings, namely the local weekly newspaper and a 5 county Shopper. He wonders how to get beyond the potential client's objections.
As I have stressed, Underwriting Sales means you need to know who your competitors are, what they do and what they offer. It's like going to battle. You don't send your forces out there without knowing who your enemy is and without a plan to win the battle.
First, you need the October edition of the weekly newspaper's Statement of Publication, ownership and circulation the Postal Service requires each Second Class (aka Newspaper Class) postage holder to print in their publication. Buy a copy of all those October editions! The detail shows in county, out of county and via other classes of distribution counts for the past 52 weeks and the week closest to filing. This demonstrates the actual circulation. I'll show it to clients.
Why is this important? Here's a true example: town of 5,000 in a county of 20,000 claims 6,000 readers. The form shows that the paper really has 2,000 subscribers. Of that about 850 are in county and 'by other means' is about 200. 950 go outside the county. This means 1,050 are either mailed in the county or purchased, say, at the convenience store. The form dispels the 6,000 and brings it to the reality of 1,050. Out of county is everywhere else in the world, so those 950 don't truly matter to the advertiser.
For the 5 County Shopper, the circulation number might be 25 to 30 thousand but typically this is the press run. These are either mailed via the post office or available to pick up, usually free, at various retail outlets. For mailed copies, people in the direct mail business are pretty happy with a 1 or 2% return. In other words, if 1 or 2 out of 100 turn in to buyers, they're happy. What this tells me is a well targeted mailing list hits 1 or 2%. A shopper goes to every postal customer so logic says that 1% would be wishful thinking. How many mailed copies are trashed without reading?
Consider those publishers that simply set them out are spouting press run, not the number of copies actually distributed or actually read by people. That number will always be much less.
Consider the 5 county reach. If the business is selling a product or service also available in those other four counties, how many will leave their county for, let's say, that oil change for the car when it can be done just down the street? My point is the business is paying to reach thousands who will never be their customer. Remember media charges by reach. The more you reach the more you pay per column inch.
This leaves you with one important point: trade area. The most efficient use of advertising dollars is spending on venues that target the local trade area of the business, typically within 8 miles of the business location. For many businesses it is 3 to 5 miles.
Considering this, why spend to reach 5 counties? Why pay the weekly paper to reach about 50% of their readers that are beyond your home county. Both indicate a higher cost to acquire a customer and a sale.
Your LPFM is likely not in a position to state the size of your listening audience but logic prevails that if you can show the business owner your LPFM provides local information that attracts local listeners, you have a convincing case for why that business owner should delegate some dollars to Underwriting on your LPFM, perhaps by buying a smaller ad in those papers he likes.
I must stress that you never make the client appear to have made a bad decision. You do not want to make out that the print options are bad. What you are offering is an analysis of what the client spends to acquire a new customer or a sale and how you believe it will take fewer dollars with your LPFM because your listeners, all of them, are right there in the business owner's primary trade area. You are there to educate the client on options. I'd even point out that a business with a larger trade area (say a car dealer) or a multiple location business (say a franchisee with locations in all the nearby counties) is a better candidate for that shopper than a stand alone business.
If you take the time to analyze all of this, to know your competition, then you can present a compelling case. I should also point out, targeting the right business is crucial. LPFMs are perfect for Mom and Pop businesses.
While time consuming, one should monitor cable TV, local websites, newspapers and other radio stations, commercial and non-commercial, to see who is advertising and how. I like to keep a running chart of who is spending what and where. It creates a record to demonstrate who advertises when and where. If you'll get their rate cards, you'll know how much they spend as well to give you a ballpark on what a client can budget for your LPFM. If you see by that chart they always buy in March, you can be the first to pitch a March schedule. It is much easier to get a yes from an active advertiser than it is from a business that never has used local media to advertise.
STATION POLICY AND UNDERWRITING
When I was brought in to sales kicking and screaming, I learned a few things right from the start. The two biggest lessons were about integrity and not biting the hand that feeds you.
My situation was jumping in to sales from programming and on air work. It was a new world for me, wearing a tie and dress clothes every day even in 100 degree heat. But that was just the visual.
I learned integrity is all you have. You must be beyond reproach with the client and the station. If you say it, your words are golden and they always come to pass. There is none of this "I tried the best I could". There was no room for not crossing every "T" and dotting every "I" and doing so exactly as you said it would happen.
You had to learn how all of that tied together and apply it across the board to everything in your life. You see sales is based in trust. You cannot sell if you cannot be trusted without a doubt. That's where your integrity makes you or breaks you. If you personally don't pay your bills on time or the police get called when you and your wife have a spat, that affects your sales in a town of say 50,000 or less. All of that figures in the trust factor or integrity. You must be known as doing the right thing personally and professionally.
The other big thing is you don't bite the hand that feeds you. Any information shared with you is always for you to know and nobody else, not even a co-worker or even your boss but especially not another client that might be trying to one up the client that shared.
My boss had two major rules: you could not have two clients in direct competition with one another. If you are working for your client's success, they deserve your best. When you have two competing clients, somebody gets less than your best at some point and that information you have tempts you to help both clients to compete better. In the stock market they call it insider trading.
Second, we put local first. This sounds worse than it really is. It is more insular in respect to doing business. I'll explain. Let's say you are in a small town with a local Ford car dealer, a Chevrolet car dealer and a Toyota dealer. You eagerly take money from all three. You refuse business from that Chevy dealer that is not local. The only way you take money from that out of town Chevy dealer is when your local Chevy dealer won't buy from you.
I call this refusing to bite the hand that feeds you. But is it wrong to say no? The answer is you do not have to accept every customer that comes your way. You have the right to choose who you will deal with.
This policy sounds very 'good 'ol boy' but it is not. It is all about how folks think. The prevailing thought is local businesses don't mind competing with those in town on their local radio station, in their local newspaper, etc. They get the impression you really do not support the town and local businesses when you allow outside competitors. To some you are just plain greedy.
It is perfectly fine to sell an out of town business offering a product or service you cannot buy locally.
I worked a station doing local outside sales. This station had some telemarketers selling cheap packages in the big city 60 miles away. As I called on businesses, I got fewer substantial sales because the station I worked for allowed outside businesses to compete. There was a line in the sand. Pretty much the nearby towns, say, up to 20 miles away, were okay but beyond that was off limits to us based on the mindset of the town.
The station retooled the sales department and restricted those big city telemarketers to selling the specialty businesses and those that didn't always advertise in radio. Ironically they sold just as much from the big city but the car dealers didn't hear the big city dealers on our station, for example. Those sales we were losing came back almost instantly, especially after explaining we had redirected the salespeople in the big city.
The move was a goldmine for us. The local business spent 4 to 5 times as much per month than any order from the big city. Even more than the dollars, the perception was our station was 'for' the community, not 'against it'.
As a rule of thumb I try to keep a rep from having two direct competitors on their account list and my policy is always to sell local first and look elsewhere only when the local business will not buy. In my book, local radio means local clients. I see the station as sort of the audio chamber of commerce, supporting our town and supporting local business. The guy down the street will feed you and feed you well if you work for it but never bite their hand in the process.
A final point: When our station had a salesperson quit, I had to service two competing grocery stores. Luckily, both stores had their own niche, but that did not make it easy. I had to double-check myself to be sure my suggestions were not based at all on the confidential information I knew from the competitor and I struggled to answer my own question if each client got my very best. I recall I tried to guide each client to feature what made them unique. Had I not have a few years in sales already, I would have had a much tougher time. That's why I suggest a salesperson not have two direct competitors as clients.
Having two competing clients is similar to a situation I knew of where a friend had been close friends with a guy and a girl that became husband and wife. The wife would cheat on her husband from time to time. My friend knew this by her own admission to a trusted friend. Unfortunately, the husband, also this guy's close friend, suspected as much as he confided in my friend. My friend was perplexed. He chose to withdraw from them until they could work through their issues, keeping the secrets to himself. In the end, he found it impossible to be really close friends with either one. This is somewhat like working with two direct competitors. How can you allow one client to take a path you know will not work because you know what his competitor has up his sleeve?
DEATH OF A HERITAGE NEWSPAPER
It had been a staple in the town for about a century or more. They never missed a weekly issue, ever. It was the first media for this town and was well read for generations. A few weeks ago, they closed the doors for good. This is in a small town, the county seat, a population of about 3,400. Unlike big city papers, the small town press is enjoying increases in readership. In this digital age, small town papers are immune to the problems of their big city brothers.
It was not circulation that hurt the paper. They had a big subscriber base. From the best I can tell, about 60-65% of the households in the county paid to read the content. That's well above average.
The paper was the official Public Notice paper for schools, cities and county, something of substantial value when selling a paper. It's guaranteed income. These entities are required by law to print their notices in a publication of general circulation and pay by the word to do so. In fact, to be such a paper, you need good news coverage to earn the bulk of newspaper readers. This paper was, hands down, a living history of the county on a weekly basis. These guys were doing it right.
So, why did they close? Let's look at the market: locally you have an AM & FM radio station. They're both good small market stations perhaps leaning a bit too much on satellite delivered music programming but full service in spite of that. In other words, like the LPFM, they work within their means and try to not sacrifice quality.
In more recent years a second paper appeared. Owned by an upstart in another county where they take on the heritage paper there, this hardworking group has set up shop in several towns in three counties. Their's is also a quality publication but the subscriber base is only about 500, a mere 25% of the heritage paper. They shave off some ad dollars for sure but not more than 25-30% of available print dollars.
The big threat came from the economic climate and "shoppers". The big thing in print now is the free shopper that is mailed to homes, every home. Many spout circulations in the range of 25,000 over several counties. The rates are much lower per thousand because they don't pay a news staff to report news.
In fact, if you print a paper, you usually lay it out with a popular piece of software and email it to a print shop who assigns you time on the press. The better print shops will even print mailing labels and bundle for the post office. The rates for printing are mostly for page layout, not the paper and ink. You can print 25,000 for maybe double what it costs for 2,000 with the same number of pages because of the set-up. About 10 years ago I knew a guy that did a 12 page tabloid monthly. He learned it only cost 50% more to print 5,000 instead of his usual 1,000.
Economically, postal rates are dirt cheap for every household. You can see why. Every zip code has so many entities getting mail, so you provide the post office with a piece for every entity getting mail and the delivery is real easy, no sorting.
People are shopping elsewhere. This is a big factor in a small town. If you buy it on Amazon instead of that shop on the square or if you go to the Super Walmart in the next county or that Dollar General on the outskirts of town, those dollars do not go to the local merchant that can no longer compete on price with this competition. Every dollar they miss means less they can spend in town and the closer they get to closing up.
Even worse is when the local merchant is lured by that every household in 3 counties pitch from that shopper or maybe that rival paper. Every dollar they spend sends their local paper closer to the brink. And nobody notices except the folks at that local paper. They sell the news and localism but the merchant is lured by low column inch rate and big supposed readership. The merchant never thinks of that 25,000, maybe 2,500 are actually not trashed unread.
Then, like in this case, the competition has filtered off enough dollars to destroy any hope for a profit for the hometown paper. Maybe they go to fewer pages and rely more on reader contributions to fill pages. But this is life support. Readers get the coverage has been affected. They see the paper as just not as good as it once was and quit subscribing. At least this paper didn't take the one foot in the grave path. When it was evident the dollars were gone and the train had already left the station, they went out on top after trying to find a buyer to carry on the legacy.
So, what did they do wrong? Maybe nothing. Maybe they figured their good product and heritage status would save them. Likely it was sales not communicating the right thing. Had they sold trade area advertising and pointed out the lure of reaching so many was wasting money reaching those that would never be their customer it might have changed. Maybe they should have worked more on the importance of buying locally and reminding readers when they spend at home they actually keep their quality of life and their town healthy. If nothing else, it doesn't hurt.
This is really a lesson for all media, even your LPFM. You have to sell local, trade area, hometown and the importance of communicating how to keep the town healthy and flourishing. Small towns everywhere are standing at the edge of the cliff ready to be pushed over the edge. Everybody needs to be aware of this and how their simple actions can keep that fall from ever happening. A few towns truly know this and walked away from the cliff. The real lesson is act now before your town or your LPFM is teetering on the edge. You can never be comfortable with where you are. If you are the competition takes a bite every time you look away. If it can happen in this town to it's heritage newspaper, it can happen to you..
DONATION VERSUS ADVERTISING
My critics have it in their mind that if the Underwriter sees Underwriting as achieving results their LPFM has evolved to the point they are the evil corporate radio station. I simply cannot connect the dots to get there.
First, Underwriting benefits the Underwriter. Simply put it happens by merely airing the Underwriting on your LPFM. If you don't want the Underwriter to benefit either make sure your programming is so terrible nobody will listen or broadcast it in a dead language nobody alive understands or simply don't run Underwriting in the first place. Those are your only options to not benefit the Underwriter.
That same person will say it is wrong to imply the Underwriter will see a benefit. After all you are non-commercial and not for profit. I don't get that. Non-profit means you simply don't produce a profit on purpose. The only way you can be commercial is by breaking FCC Rules. The truth is much of advertising's power is through building awareness. Underwriting does this. Flat out commercials do this. Both benefit. See the above paragraph.
Donations are gifts. The difference is that a donation conveys all benefit to the recipient of the donation. That's the very definitive result of a donation. If you give a birthday present to a friend do you get benefit? No. The gift or donation is given for their benefit only. Asking for donations means you'll get the least money the business thinks it can get away with giving because with a donation, any amount is acceptable because you both realize the giver gets no benefit. Donations, in a nutshell, mean you get the least money.
Let's look at listener fundraisers. Who does not offer a benefit to get more dollars from each person that gives. Give this amount and get this premium. Give more and the premium gets bigger. Simply put, the premium is the benefit received for the amount given. It's no different from buying an item from a for-profit store: you give me this much money and you get this product. Yes, even Public Radio has long ago figured out donations don't work but selling benefits do by selling premiums with the premium being that benefit.
So, back to Underwriting. Selling the benefit is selling the obvious and selling the result that will happen regardless of the mission of the LPFM. It happens independently of your programming and style of operation. It never has and never will dictate any programming or operating status (meaning because Underwriting produces results it has no influence over what your station is but rather happens because of what your station is). In other words, results happen because you remained true to your mission statement and mode of operation.
And Underwriters do not, as commercial advertisers do not dictate programming. They are there, in both cases, because they are buying the audience they want to reach. An Underwriter and Advertiser is only concerned with one thing: staying in business. If they feel they are helped by being on your station, they continue. If not, they cancel. It has nothing to do with programming being altered to suit them. I've been in radio for 40 years and I have never had an advertiser or underwriter try to dictate programming or even ask. I have had them ask me if they could sponsor a certain feature or segment because they liked it and saw that as an advantage for them.
So, go out there with the understanding the most important function of advertising is achieved through Underwriting: building top of mind awareness. Understand Underwriters will benefit by merely being heard by your listeners. Understand that reality does not change you, the station or make you evil. Instead you are smart enough to figure out it neither cheapens what you do nor changes what you do. In fact every yes from a client says you're on the right track and shouldn't change a thing. So, leave the defeatist attitude behind and go out there with both eyes wide open. That Underwriting will happen because you remained true to your mission, not because you are expected to alter it for the Underwriter who will never ask you to in the first place. To quote Family Guy, it's like buying in to volcano insurance in Rhode Island is you think otherwise.
THE SEARCH FACTOR
For a long time now I have been pushing the combined efforts of on air with online presence as your Underwriting Package.
The Radio Advertising Bureau has a September 2017 study to back up the trend I have been noticing. Radio drives people to businesses via online presence.
First, the restrictions in language used in Underwriting units means some of what a client might want to say cannot be heard over the airwaves. As the FCC does not restrict content except over the airwaves, your website can act as a tool for the Underwriter to get that message across.
71% of consumers use online searches to begin the 'buying process'. 74% say they went online to consider a purchase. These figures come from the RAB.
The study went on to say 29% of the searches were driven by radio. In other words, the search happened due to what they heard on the radio. Here's your evidence: radio is the gateway to the online virtual visit to that business. 29% of listeners will, in essence, seek out your Underwriter online.
This is huge. But so many are so ineffective in doing this. Now, let me ask you, when you get an Underwriter on, write their message, do you actually introduce them to your audience, sharing what they do and how to find them? Why then, don't you do the very same thing at your website even if they have their own website? More information always beats less. And, my goodness, think about the listener for a minute. Just having a dedicated page with mirrored information plus what you can't say for every Underwriter on your website is a no-brainer, even if they have a dedicated website themselves. Lots of times you're spouting off phone numbers, addresses and such over the air without making it easy for listeners to grab that information. Send your listener to YOUR website to get that address, phone number, website and additional information on your Underwriters. Make it a part of your package!
www.rab.com: look for Radio Drives Search.
Online presence is the savior for the Underwriter that chooses to view your station as a place to gain new customers. Likely they want to say what you cannot say on the air, so the online portion solves that issue and this study demonstrates the marriage between on air and online is how a great deal of consumers use various media to determine who they buy from..
TURNING A NO IN TO A YES WITH A DIFFERENT TWIST
While the instances I speak of were from commercial radio, the same applies for non-commercial stations. The concept is how you deal with the business.
As you make your contacts you will discover a few will be receptive to you but many won't be. Their reasons are many but there are simply some businesses that just cannot afford to Underwrite. In fact, for some, other media venues are simply more cost-effective. You might even find some who are convinced radio doesn't work.
Instead of writing off all these people, start thinking how you can incorporate them with the businesses you are successful in selling. Can you create a way to get something for your time for your listeners or station benefit outside Underwriting? Chances are you can.
Perhaps a client is running a special promotion where you can tie in that business that said no. Maybe it is a gift certificate for a station promotion. Maybe it is a service or product the station might tap in to for making that station function more successful. A bit of thought might do the trick.
I knew of a Mariachi band that was short on gigs (but would never buy spots to get gigs) and a flower shop doing such a low volume they could not afford us. I did have a restaurant wanting to do a big Valentine's Day promotion. My two 'no' clients became the perks for my 'yes' client. I arranged for the flower shop to place on of their employees at the restaurant to offer every lady a free flower (some got roses, others carnations, etc.). I got the Mariachi band to perform in the restaurant and go around to tables to serenade folks. It was a very successful night for the restaurant that needed a way to stand out among competitors. The band ended up getting some gigs and the flower shop got some new customers. My regular client got that something special from my station. In short, all came away really appreciating the station. In fact, the 'no' businesses loved that my station was willing to try to help them without pulling out their checkbook. They learned radio worked and felt it was wise for them to include my station when it came to marketing their business. And they told their friends.
In other words I tried to make lemonade from lemons. I urge you to think this way. Try to bring on the 'no' clients by using them to benefit your 'yes' clients. I call this time management too. I had lots of time invested visiting all those 'no' clients to locate those 'yes' clients so I wanted a bit of payback for the time invested. I utilized this countless times and I even rounded up a couple of new clients I had never visited because of the goodwill on behalf of my station. Simply put, it was a win-win for all of us.
A LITTLE ABOUT WHAT TO ASK FOR
A question that pops up frequently is how much do I ask for in dollars from a business I see about buying Underwriting?
I have mentioned sites like Manta and Dun & Bradstreet that let you see what businesses are out there in order to help you figure out some good candidates. In most cases you will see the estimated annual sales listed for the business. Dun & Bradstreet is better on this than Manta.
Please understand I am simply ballparking and nothing beats asking the decision maker. Consider my ballpark to be about like a call to a flooring store saying "what will it cost to replace my carpeting with tile floors in my home?" There is no true answer until specifics are known. But you can say most homes run about $X but it varies greatly.
So, how about an example: John's Appliance Repair does $100,000 a year. Since in most markets radio commands about $2 to $2.50 per $1,000 in retail sales, I'm guessing $2,000 to $2,500 a year. Given this is for all radio stations in your market, it also includes all those businesses that do not buy radio. I'd think we can ballpark this client in the $150 to $200 a month realm. Please understand you have to ask to really know for sure. In fact, I ask, "Can you tell me what you'd be comfortable spending each month so I can bring you some ideas that match your comfort zone as far as your budget goes?" They might just surprise you.
If you wonder if this is essential, let me say it is! Certainly you'd rather have an Underwriter buying $200 a month than $30 or $40 a month and you might just get that $200 if you do your homework, especially if you'll just ask.
I was working at a station in one city that pretty much was lucky to get a client paying us $300 a month at that time. I go to see a client that is starting a quick oil change business. I get sent to his advertising person. I ask the person what their budget is so I can create a customized plan for them. She tells me she has allocated $2,500 for radio. Gulp! Had I not asked, I would have pitched about $300. I went back talking about how I was the radio station right in their trade area and I would create a big splash with sponsorship of several foreground features and a concentrated frequency of units leading up to and through the grand opening day. I got all those dollars. Keep in mind I was fighting it out among Arbitron rated stations. Eight in all. Why? I was the only station that pointed out I was right in the local trade area of this new business. She said everybody else pitched the whole city but I pointed out the local Chamber of Commerce Report, local weather, local PSAs and even two churches in the area that did Sunday programs. For her I was the only 'good' choice in radio. My station didn't show up in the ratings. I won by being local.
The worst thing you can do is undersell a business. Why do the same work for $50 when $500 is on the table with your name on it if you simply ask the question "what can you comfortably spend each month if I bring you something you believe in?" Don't make the mistake that one size fits all. Your pitch needs to match the business you are seeing. Take the time to learn and gather information by asking questions. Then you can get what that business thinks should be your fair share.
UNDERWRITING is SALES and ADVERTISING
Before you throw me under the bus, let's define sales: an agreement between two qualified parties to exchange goods or services, frequently for a monetary amount. Therefore, if you contact a business owner, and say, you offer an Underwriting announcement per day for one month for $30, you have conducted sales upon the successful conclusion of the agreement.
The mere act of seeing a business to attempt to convince them to exchange monies for Underwriting is Sales.
Underwriting is Advertising. Advertising is the means of communication to potential users of a product or service. Advertising includes television, radio internet, newspapers, magazines, mail, direct selling, posters, sponsorships, clothing, signs, billboards, colors, designs and people. Commercials as they are called on radio is only one form of advertising. Advertising is the act of building awareness of a product or service or a company offering products or services.
There is a negative reaction to both words: sales and advertising, among LPFM stations. Those that complain engage in sales and advertising. Yes, every single station. The root issue is that you think by being a non-profit organization it is somehow wrong. The truth is you have a government defined code of actions permissible and one of those rules is you cannot make a profit. You are allowed to advertise and to conduct sales.
Here's a really odd fact: only FCC regulated media owned by a non-profit and designated non-commercial are not allowed to sell commercials. If you run an internet site, newspaper, magazine, etc., you are allowed to sell advertising without restriction.
If you promote yourself or attempt to fund your station you are engaging in sales and you are advertising.
If you offer Underwriting you are selling advertising. You are not selling commercials but you are indeed selling advertising. The mere mention on the air and elsewhere of an Underwriter is the act of advertising. The intent of Underwriting is to publicly acknowledge a supporter of the station. In fact, you would be most happy if those that hear the acknowledgement choose to become a customer of the Underwriter, the act of producing 'results'. It is okay if an Underwriter gets results. It is not a bad thing. It is not evil. In fact by producing results, the Underwriter might just stay a supporter of your station from here on. If you feel you must avoid this you should not ever offer any Underwriting of any sort.
I am not defining sales and advertising. I summarized several definitions found online. If you differ in my opinion, I strongly suggest you see how the rest of us define these words by doing a search defining the words. Simply put, you might be thinking commercial and misunderstanding just what selling is.
The fact is most LPFM stations cannot manage to support themselves by listener donations only. In fact most Public stations cannot do so and those that do have a lengthy record of doing so. You can bet they sell the idea via advertising the fact the listener can donate dollars, that old car or even put the station in their will. In fact a very select few can operate perpetually without a dollar coming in because listeners from prior decades donated so generously that the interest pays for the station but those stations have been around for several decades.
UNDERWRITING FOR YOUR LISTENER
We know radio is fast paced and there's never enough people to do everything. Since that's the norm, we have to be careful.
When it comes to Underwriting, you need to know your audience well. It's a must. By knowing your audience you narrow your businesses you seek out for Underwriting. Plainly put, some are just not right for your listener. That payday loan company might not be right for that program targeting a higher income audience just as that financial planner might not be a good choice for that program that targets a 12 to 24 year old crowd that lives in the moment more often than not. Be selective.
By knowing your audience, it becomes less about what the components of the text are but how the listener perceives the message. By knowing the audience well, you write the Underwriting message to 'talk their language' when it comes to the listener. This is crucial for repeat business.
The wording must fit the style of the programming. You're sure not going to write a spot with a bunch of slang for a classical station where the listener expects a more formal delivery because they might perceive the business as 'uneducated' and will certainly not feel the business relates to them.
We get so busy in radio we sometimes only center on what they client wants to include and forget to write the message in a way that is most comfortable for your audience. It should sound exactly like a listener telling another listener about the business.
EXPLAINING UNDERWRITING WITHOUT LEGALESE
An Underwriting Credit (aka spot) should be, per the advice, not rule, of the FCC be 20 seconds or less. The FCC says the longer the spot, the better the chance you will violate rules.
YOU NEVER WIN WITH CRITICISM
One of my early lessons in sales was the agreement that all media options are good and viable or they wouldn't exist. That does not mean they are not utter failures for a certain business. You might think direct mail is akin to tossing dollars out an open window but it actually does quite well in the right circumstances. The same can be said of radio and every other marketing medium.
The biggest reason to stay positive is the client. I like to relate it to religion. There was a guy I knew that got deeply involved in his Church. In his mind everybody else was on the interstate to hell and had it all wrong. When he had blasted me with this one too many times for my patience I told him if right was all about telling people they were wrong and going to hell I wanted no part of it, that he was driving me away, not closer and making me out to be a fool.
And if that client of yours just spent a huge chunk of change on direct mail that you feel is a waste of money, don't offer your opinion. You job is to show your client your option might be a better option. I never make them think they made anything but a good decision, a calculated gamble that just didn't work out this time. I even say every marketing medium is good or it would go away. The trick is exploring marketing venues to seek out the best ones for their business.
I sell the merits of what I offer, not the pitfalls of what I don't offer. If I have to shine my light on the pitfalls, then just how good is my option. I was told if I had to cut down a competitor to make myself look good then what I offer just isn't that stellar in the first place.
I never tell my client they were wrong or made a mistake. Instead I sell my positives in hopes of winning them over. In fact, if my friend had taken this approach with his religious beliefs, I would have listened. He would have had a chance. If he sold the merits versus telling me I was wrong, I would be much closer to that yes.
Selling is about being smart and helping without making that person you're helping think they aren't the smartest guy in the room. The fact is, they might just be but haven't learned why radio will work for them until you came along to help them understand just why that is..
SHOULD I SOCIALIZE WITH MY CLIENTS?
I think I was influenced more by my situation when I got in to sales: a small market and I was so poor when I started I had to pay a couple of things on credit card. Extra cash was not an option. Thus, my station didn't have a budget for socializing and I sure couldn't afford to.
As time moved on I did and it did not end well. In fact I concluded once you hit the friend zone, you got fewer orders and were asked for favors the station management didn't care for.
For my experience, I developed a rule: when a client thinks of me they think only business. Don't get me wrong. I know my clients personally and they know me personally but that is rooted in talking at their business or seeing each other at spots like the grocery store, community event ot chamber mixer, not over lunch, not over drinks, etc.
I learned that people buy not because it's just a good proposal but because of other reasons as well. I had a friend that turned me down on a great idea he finally took me up on. I really needed the sale at the time but my friend said he just didn't have the cash to spend. The next day he bought the newspaper from a new sales rep at the paper because he knew she 'needed a break'. In other words it was easier to say no to a friend but harder to say no to a struggling new sales person. If I said sales had been off that month instead of selling the merits of my plan, I might have gotten a yes but as a friend, it was easier to say no.
Sure, I talked to clients. A five minute trip to the grocery store might extend to 30 or 45 minutes by seeing my clients shopping as well. If I see them in a restaurant I'll say hello and maybe pay for their meal.
From a social media perspective, I stay away from lots of personal opinion when it comes to religion and politics. I just don't go there. I don't use 4 letter words or anything that someone might think is taboo as far as public knowledge goes. I stay out of fights and don't bully online. Some of my clients might think less of me if I do. I do not know exactly what image they have in their mind of what I am but if anything, I want them to think of me as a nice guy that has their back on marketing ideas to make them more successful. And I'm not talking just radio. I recall one client where I suggested a reverse ad in the paper and a much smaller ad (reverse is black background and white print to make it really stand out on the page). That's not rocket science but rather recognized 'tricks' to get more from your ad dollars.
I approach my sales job as a marketing expert. I'll talk cable TV, direct mail, print, online advertising and even business cards. The idea is to bring value to the client and build the perception I know what I'm doing. In short it gives my client a greater confidence in my ideas I bring them that involve marketing on my station. In their mind, because of what I know, I wouldn't work for a poor performing station but rather a successful marketing venue.
And, yes, you have to educate yourself on other advertising venues, knowing their strengths and weaknesses. You can't just make this stuff up because your client might act on your words so those words need the backing of fact. If you don't have integrity, you won't last in sales. You'll be found out alarmingly quickly.
MY COMPETITION IS TELLING LIES ABOUT MY STATION
The issue is who the client trusts but thank goodness they tell you. And what a compliment the competitor gave you. That they are so threatened by your hard and effective work, they have to try to cut you down. You are certainly doing things right. But how do you respond?
Here's what I would say, looking the client straight in eye: You know, I am hearing that a lot. You and I are both in business. Our plates are full doing our jobs well and making customers happy. We really don't have the time to worry about what our competitors are doing. In fact, if we think about the comment, I'm reminded of something my Dad said. If you have to cut down your competitor to look good, what you offer must not be that great. Considering the comment my competitor made is not truthful, I would question their integrity. I prefer sticking with what's important: offering a great product and making my customers happy. If the comments give you cause to doubt that statement, I hope I may prove to you by my actions your doubts are unfounded.
A big part of sales is just letting things work out in the end. We know deep down the bad guys really don't win although they might appear to be winning at the moment. A person that resorts to criticism of competitors never gets ahead but moves on at some point. The ones that always win in the end are those who stay focused on providing the better product and making the client happy. Yep, you are going to have a good number of battles, many that leave a mark, but you'll win time and time again as others follow in the footsteps of the first loser.
And I want to make this clear: if you are always having to deal with this sort of issue you are the winner already. If you weren't, you wouldn't matter and nobody would be trying to best you. Nobody sets their eyes on tenth place, they want to win and beat out who is #1. With #1 comes the competition always nipping at your heels. Just remember, stay steady on what you are doing and don't lose focus because that is what got you to the position you find yourself.
THE ADMISSIONS OF A SALESMAN
I was posting on a radio advertising site when a memory from January 1991 flashed in my mind. I'm a positive thinking guy but that does not mean I am immune from getting down thanks to sales. January 1991 was a big learning experience for me.
The prior December I had billed about $13,500. My commission check, if all paid on time, would be $2,700. To put that in comparison, my typical check was $1,400. December had me with a smile on my face I could not hide.
It was the first Monday in January. The sales meeting was a pep talk about grabbing the dollars now while the getting was good. My boss spoke from experience and underlying was the positive attitude part knowing a dismal month of sales was ahead, in fact, a whole bad quarter. He knew everyone had spent their wad of cash before December 31 and were hunkering down.
I took off at 9. I had 15 businesses to call on that day. I knew I'd get some 'no' answers, so I arranged my list so I'd call on those I just knew would say yes to begin my day. If I could get a yes, it would reflect on my attitude as I visited those that were more likely to say no.
By 11 am I was near the end of the list...3 to go and not a single yes, just a come see me next month. I had already thought how impossible it would be with $1,700 on the books for January if I couldn't get some sales. There was rent, food, car expenses and such and $1,700 wouldn't come close. In fact $4,500 wouldn't cover my bills at 20% commission on collections. Anyway most of that $1,700 was agency business that didn't get paid fast.
Business 13 for the morning was an office equipment company that began last year amid stiff competition. They were certainly making inroads and holding their own, but they could never spend much. The lady I dealt with was a sweetheart. I could convince her to say yes but my mind would not allow me to sell her something I knew she'd regret buying. I always felt if a client would buy in the heat of the moment, I was not doing the right thing. I wanted a level-headed yes versus an emotion driven feel good now but bad later yes.
I recall driving into the parking lot and then a parking place where you could see her inside, a vacant parking lot and not a customer in sight. I just knew she didn't have any money to advertise. I pulled out of the parking place, never getting out of the car. I decided an early lunch was in order. My balloon of hope had been popped. I was sure I wasn't going to come anywhere close to finding almost $3,000 in billing.
As I prepared lunch at home it dawned on me. I had to make the client say no. I couldn't get a 'yes' until I asked. I reflected on how I didn't push the last few clients because I was scared of hearing the word 'no'. I was doing the absolute worst thing I could possibly do.
After lunch I went back out and I got one yes from a client I had just 'chatted' with. It was a small order but it was better than nothing: $150 instead of the usual $300. Finally at lucky 13, the office equipment business, I stroll in. I'm greeted with "Boy am I glad to see you. I need to buy some advertising." You see, January was the month many of the contracts for office equipment renew. The normal $200 a month order became $800 within about 5 minutes. We explored co-op dollars. She called some reps and got them involved. Glowing, I went back to the office to get the ball rolling. Then she called. She got her rep for one company to kick in some unearned co-op dollars and she upped the order to $1,200. (Note, an account executive can sometimes wrangle some unused co-op dollars about to expire from one client that doesn't use the monies to one that will).
A bit later I called on #14 and #15 that day. Number 15 was a car stereo shop, a least likely to say yes client in my book. They bought $300 because so many kids got cash from relatives for Christmas they might spend that money on a new sound system for their vehicle. My mind never considered this.
When I went home at 5:30 that afternoon, the first Monday of the new year, my sales had gone from $1,700 to $3,350. And it was all because I realized I had to do the right thing for myself and stop fearing the 'no'. I had to get in my head that until I asked for a yes or no, a client couldn't say yes.
By the way I wound up at about $4,700 for the month and every dollar past that first Monday was tough to get but I stopped fearing no so people could tell me yes. I didn't outshine any other salesperson at the station or set any records, I just kept calling on my accounts like anybody else. Isn't that the definition of crazy: doing the same thing but expecting a different outcome?If so, I was crazy in January 1991. The thing that made January 1991 and that first Monday memorable was it was the day I stopped fearing the word 'no'. As a boss would tell me years later: every no gets you closer to a yes. He's right. Sales is about numbers. The yes is out there, you just have to get all those that say no out of the way first.
So many have asked about sales and what I have researched, I figured I had better start a page. Most people ask how I have the time to do this and simply put, my current radio job is for all intent and purposes, caretaker of a radio station meaning many days nothing happens but I have to monitor and be ready to act if something goes wrong. So, the trick is to keep myself entertained all day.
For those that know me, I have been on the sales and management side of things since 1987. It was a rough start but a fun ride where I learned much about myself and people in general. I was fortunate to have great teachers to influence me. I'm certainly not a great salesman, but more the slow and steady sort of guy where my clients are intensely loyal. To me, loyalty trumps the quick sale. I prefer think long term.
Your fifteen to twenty second message is easily retained and frequently tells the listener more than the commercial. We only air a few such messages an hour and for added impact we identify you as a supporter of the radio station our listener loves. Why? It makes you a friend, almost an endorsement from the station, making it easier for our listener to chose you..
LOOKING AT RATES FOR UNDERWRITING
When I talk to Low Power FM stations and Public Radio stations I am always interested in what they charge for Underwriting. Naturally I am looking for unique ideas and trying to gather if they are maximizing their asset, the radio station. First, some are really inventive and some are downright too cheap.
No matter where you are, you shouldn't be charging $50 a year for an Underwriting spot 7 days a week. You need to run the numbers. Let's say you let a sales person get a commission for each sale when they bring in payment. Let's say that is 20%. On a $50 sale that is a mere $10 for making numerous calls on a client and potentially several copy changes within a year. Can you imagine how many accounts you must have to make it worth anyone's time and effort? And there is a limit to the number of accounts you can handle. In fact, I'd say about 30 active accounts is the maximum if you intend to keep them on the air. You can bet other sales people are after your client and will win your sale by simply out servicing you if you don't stay top of mind with the decision maker. At 30 accounts, that's just $300 a year for what is easily a fulltime job based on 20% commission on collections. Are you willing to put in 40 hours a week for $300 a year in your pocket, buying your own gas to visit these clients day in and day out?
On the other end, you can be too pricey. I know one station that is in a remote community and only has about 800 in their coverage area. They charge $10 per Underwriter Spot. Considering their eclectic format would not be of interest to more than about 5% of the potential listeners at best, it is easy to see why the rate is considered 'too much to pay'. I'm sorry but once or twice a week is not going to give any client any benefit other than another choice versus tossing cash out the window. The typical business can only afford about $80 a month in this town based on what I see in reported sales. So, if they developed a nice $80 a month package with say, 2 mentions a day on weekdays or once a day 7 days a week, I'd bet they get lots of takers.
Many LPFM stations are run by religious groups. The national average is 3% of the population listens to Christian radio. I suspect we can double that for what is termed 'Bible Belt' states and maybe a bit more for more rural settings where weekly services might be more of a tradition or weekly social activity. Even so, you really have to look at the numbers. When your entire reach is only 6,000, the maximum potential for a Christian station might be as much as 360 people. But wait, we are talking a station that is a specific denomination. And the station is not a music oriented station as the vast majority of Christian Radio Listeners tune to Contemporary Christian music stations. So, let's say 50% listen to the music station (and it is a rare location that doesn't have one in your area). Now we are at 180 potential listeners. Remember this station has a mainline denominational stance but in the 6,000 in the coverage area there are 6 options for mainline denominations like Presbyterian, Catholic, Lutheran (ELCA and a more traditional option), Baptist, Christian (Disciples of Christ) and Assembly of God. In this area some 540 people are on the attendance rolls for the denomination the station targets. At the very, very best case scenario, the station might have about 100 listeners, a generous amount in my mind and I'll give them that because they do some local non-religious programming too. Even so, I doubt you'd run out of fingers counting listeners at one time on both hands and that is in peak hours.
Simply put, this station is ending up empty on Underwriting because they charge $25 per Underwriter Spot and $100 to sponsor the station as a Day Sponsor. It's likely fewer than 10 would hear the spot so that means $2.50 to reach a person at best. What does a stamp cost? The numbers just don't work but their logic was the amounts were in synch with amounts the sponsoring church received when asking for donations. The problem is Underwriting is ongoing. People don't donate $25 every day, or $100. For the business community, you need that magic amount of dollars they can afford to spend monthly.
GETTING CREATIVE is always fun. As we set out with our Low Power FMs, we really need outside the box thinking. Taking their cue from commercial radio, one Public Supported Station offers naming rights. Their studio is the X business studio. The weather is from the X business weather center. The community announcements are from the X business community calendar. There's no spot, really, just an annual fee to earn the right. Charges vary from $3,600 to $10,000 depending on the market from the stations I have seen that do this. To compare, the $3,600 station charges $2 a spot for a monthly Underwriting package. The $10,000 station charges $100 a month for 1 Underwriting Spot daily, 7 days a week.
I love this concept of naming rights and expounded on it to include community announcements and weather. It's so simple and easy to execute. Simply put, it might be "your hometown station, this is K or W ??? LP, Anywhere, broadcasting from the Joe Blow State Farm Insurance Studio". A nice little dedication plaque for the door to the studio and appreciation plaque for the business does the trick. For that yearly sum, they get mentioned hourly in the recorded Legal ID at the top of the hour. How about this: "The Hometown Forecast from The First National Bank Weather Center calls for...and it's 62 at the First National Bank. One weather provider offered a remote sensor the software would receive so the temperature was really from that remote location and identified as such. Any PR oriented business is game for naming. Maybe it is the local power company that sponsors the community calendar and in return you build a 4 by 8 foot cork board, protected from the elements, where people can post community announcements at the sponsor's location. Heck, you could even call on the direct sales independent representatives that will post there and maybe get an extra underwriter or two. Even the weather and community announcements are so easy. Just schedule one community announcement and one weathercast each hour. 15 to 20 seconds is plenty of time for each feature and all you do is open with the sponsor getting the naming rights. My goodness, it might be a nice, say $15,000 or more a year from this alone.
THE RIGHT PRICE? So, what do you charge? How much is too much? What is too little? As I have stated before, look at other media in your area. If the newspaper charges $20 a week for a 4 column inch business card size ad, guess what, $20 a week is a good price. You have third party documentation many businesses can afford $20 a week. When a business advertises, what do they pay other advertising venues? Ask! Remember, a good rate is in the ballpark with other media and close to what other options charge a client. Too expensive means a solid no. Too cheap and you have no value to the buyer and become a "throw a few dollars out to get you to quit bothering me". In the ballpark gets you respect and value. Affordable gets you many more yes responses.
The response I get to the above is "we really don't know how many listen or what is a fair price". I understand that. Nobody really knows. Sure you can get a clue but there's lots of guessing even in rated markets, so it boils down to being simply liked. You see, if the client likes you and feels you are with them on trying to help, the number of actual listeners and price are not that crucial. If you make it a subject you talk about then it will be.
Here's a lesson learned. You'll need to read between the lines, but it demonstrates how centering on price and listeners can go so wrong. You need to center on the relationship and simply let radio do that magical thing it does. I was new to sales in a small town of 3,000. The Dairy Queen had lunch specials and they weren't on the DQ menu. Once a week it was cornbread and beans, all you can eat for, then, $2.99 including the drink (this was 1980). The franchisee had never bought radio and I was told to try to get her on. We agreed to about 15 spots advertising the cornbread and beans lunch at 99 cents if you said radio to get the 99 cent price...$2 under the regular price. Seeing the full parking lot that spilled over to the street, I was thinking she was certainly going to opt for a regular schedule.
I asked about how radio did. My problem was I asked how many paid 99 cents for their lunch special. The answer was NOBODY! The owner talked about running out of food 30 minutes before the lunch special ended and how she couldn't recall a busier lunch run. Instead of these facts, she felt radio didn't work because nobody demanded the 99 cent price. Had I gone in and asked how her customer count compared to the previous week, I believe I could have won her over. As a footnote, why, you wonder, nobody demanded the 99 cent lunch. The answer is radio is passive listening. In other words, you were likely doing something else when you heard the commercial, so when you got to Dairy Queen you likely felt you heard 'it' wrong that maybe we said $2.99. So to eliminate any embarrassment nobody demanded the 99 cent lunch, assuming the staff even knew the code word for the 99 cent special was the word 'radio' that the passive listener might not have even retained in the first place. I also learned code words generally don't work. It was a costly lesson since I enforced radio didn't work for a client who could have become a day in and day out advertiser.
TRADE AREA ADVERTISING
I was speaking with an LPFM operator the other day. His is a suburban radio station. He has great programming and a local DJ that is a household name, so to speak. He has tons of listeners as well. You'd think sales would be a breeze. That is not the case. Sure he has had some come forward to sell for him but they never back up what they say they can do with actual orders. We looked at his media kit.
It dawned on me that we didn't have that zinger that makes his potential clients sit up and take notice. We think we have it now. You see, when you are in a big city there are many possibilities for advertising and all of them are pretty much out of the financial reach of the single location business that does not have an advertising agency making buys for them.
Sure, the local paper has a local section each week where the city is pretty much divided into four quadrants, allowing local merchants to buy ads only for their quarter of the city but those quarters are pretty big. It might take 90 minutes to get from one end to the other taking the major streets. The cable TV company does the same. Then there are subdivision monthly newsletters that you can buy but their cost per thousand is high even though they are very good choices for the mom and pop business.
So, what does this LPFM really sell? The answer, and this is the key wording, Primary Trade Area Advertising. It is a fact that the single location business gets virtually all of its customers within a few miles of its door. The approach is why should a business pay to reach those who will never become your customers? That's like tossing your money out of the window. His LPFM is advertising right in the neighborhood. The business does not pay to reach people that do not matter. As a result, the ability to make more impressions at fewer dollars and the fact the ears that hear the message are in the Primary Trade Area really gives the presentation a swift kick in the pants.
Sure, it is Underwriting to us, but for the merchant it is advertising and any business worth their salt knows a few things like the best advertising you can buy is advertising that makes people think of their business when a person needs their product or service. Even more so, the regular mentions do that little extra by making the merchant familiar to the Primary Trade Area residents. Familiar is big, really big. Familiar also means superior to the competitor that does not advertise. Thus, making the listener aware of the business and what they do and doing this day in and day our rather frequently creates a mental image of the business being successful, good at what they do and are better than their competitors the listeners don't hear about.
So, if you need an oil change you are not driving 25 miles but instead but down the street. If you are going out to eat, you are likely choosing a restaurant right in the neighborhood. If you are buying car insurance, it likely the agency down the street. So this LPFM is selling the business to people right down the street or right in the neighborhood, the Primary Trade Area.
As Underwriting does not allow comparative statements, price and item and such, it does let you know who the business is and what they do along with contact information. With advertising, the hearer makes some mental decisions. The mind processes the information offered and then complete the mental picture by, what I call, connecting the dots. What I mean is you embellish the information and we tend to think positive. So, when details are omitted, the mind fabricates details and they are virtually always positive. Thus by simply saying who you are, what you do and how to contact the business, the mind makes assumptions that usually exceed the impact of any competitive wording. Have you noticed the best never has to brag about being the best? In fact it is the competitor vying for their position that compares themselves to the best.
On a side note, please make it clear that your job as the LPFM is only to bring people to the business. Your job is not to convert them to customers. That is their job. I had a guy that sold water filtration systems. His pitch was about all the contaminants in tap water and words like cancer and poison were thrown out. The price was a bit on the high side. Many people told him they'd lived there all their life in the town and drank the tap water all their lives with no issues. In other words, the product was too high priced and the pitch was wrong. I had to have that conversation about bringing people to him was what we did and it was up to him to sell them. He started with "my advertising didn't work" but once he realized he had been flooded with calls, it dawned on him it was the pitch and price that needed work. Advertising did what it was supposed to go. It generated leads. He just couldn't convert them to customers.
APPLES AND ORANGES
Pricing your Underwriting puts you on the road none travel. In other words, your situation is unique. When you compare other advertising venues in your area you must consider their reach versus your reach. When the full power commercial FM reaches a potential of 100,000 but you only reach 10,000 with your LPFM, you cannot charge the same as the commercial FM. Why? First, you are not selling 60 second commercials and second, you don't reach but 1/10th the population.
So, you think, "I'll sell at dirt cheap rates". Think before you decide this. Let's say you are buying tires for your car. You walk in and the clerk says "We have this very good tire for $80 but if your budget won't allow, we have this $8 tire". What is your impression of the $8 tire? We all know 'you get what you pay for'. Certainly the expectation of the $8 tire is very different from the $80 tire. But here is the deal killer for you: it takes about the same amount of time and expense to sell the $8 tire as it does the $80 tire. So, by comparison, if you're selling what would you rather earn commission on, the $8 or the $80 tire?
Price your LPFM Underwriting by population reach and what you think might be the percentage of the population that might listen. In fact, you might look at some websites, say the National Association of Broadcasters and Radio Advertising Bureau to get an idea of what percentage of the population prefers what on the radio. In other words, you reach 10,000 and 12% prefer classic rock and you are the only classic rock station, then price yourself at 1,200 listeners, for example. These are not real numbers, just pulled from thin air for demonstration purposes. My point is if the price is realistic then you get your fair price and the merchant will assess value to your advertising option. The cheapest means the merchant expects nothing and they likely felt sorry for you and decided to throw you a bone..
In 1992 I was in Kerrville, Texas when Kerrville was much smaller in population and number of radio stations. The radio dial was pretty simple: In Kerrville you had KERV AM and sister KRVL FM (Nostalgia on AM; Country on FM) and KITE FM, the station I worked for with Lite Rock. You had the barely received Bandera FM playing Contemporary Christian and you had KFAN FM doing Americana along with local full service country KNAF AM in Fredericksburg. The area was about to explode in a few years and already seemed huge to folks that had lived there 10 years earlier.
KITE FM is the new station, not quite a year old. I can say many things about the owner, some good and some bad but I'll refrain because good or bad, whether hindering or a positive force, it doesn't matter as your job is to sell and produce results for customers.
As the Sales Manager, I wanted a small, concise and factual media kit that did not overwhelm clients or salespeople who felt they needed to skip some parts or rush through it. In my mind the media kit needed to slip in to a letter size envelope and be easy to navigate.
Using a foldout 8 by 9 jacket with flaps to fold my pieces of the media kit cut in proportion to permit 4 pages in each of the two slips with each headline visible when assembled correctly with cut-out for a business card. I took some photos.
I admit I like this media kit not so much because I created the content but it's size, information and overall presentation. You see, I want my customer to know what the market is and what my media does, how it does it and how I am unique and of value. The idea is to demonstrate we are a better or logical choice for ad dollars. I want the client to know it is not his/her company and mine, but he/she and myself utilizing my influences to bring greater success for my client. Selling advertising is personal and takes a relationship where you both understand, respect and trust each other. Your client needs to know the way you make your living is by working for the good of others. In other words, I have a paycheck if I can help you make more money, gain news customers, position you as more of a winner among competitors. In other words, rates are not the subject or concern but making a positive impact on the client's business is the goal. This sets you apart from competitors and makes you less of a salesperson and more of an expert that is offering knowledge to grow the business and maintain it's edge among competitors. The result is, you never reach the argument over rates because the subject is results. There's nothing easy about results but that's where the loyal customer is found and certainly not in beeing the cheapest. You don't sell packages but plans that match what the client can spend and are customized to created the results needed to create a repeat customer. Here's a look in pictures:
SOME BASIC THOUGHTS
CALL IT WHAT IT IS
What are you selling on your Low Power FM? Are you selling Underwriting or Advertising? I know we cannot sell commercials. I'm talking about how you present yourself to the business owner.
As an experiment, ask the average Joe what the difference is between Advertising and Underwriting. At best, you might get: Underwriting is what insurance companies do but likely you'll get a puzzled look and a No. You see, it is a radio term, sort of like a stopset or quarter hour maintenance.
Radio terms are just that. So Underwriting is a radio term we adopt because the FCC uses it to distinguish between the advertising commercial radio offers and what public radio offers. And Underwriting IS advertising. If it wasn't, why bother, just grab the money and say thank you. If it is advertising, then we acknowledge the support by telling who the supporter is, what they do and how to get in touch. Why do this? Because it is advertising the business and you want and are allowed by FCC Rules to try to benefit the supporter.
So, why call it Underwriting? Why not opt for calling it "Top Of Mind Awareness"? Isn't that what it is? By running the Underwriting spot are you not making an impression in the listener's mind? Since the business owner doesn't know what the heck Underwriting is, use a term they know.
It is simply crucial that your potential supporter be spoken to in terms they know so you can get across a clear message. For example, I describe a vinyl record to an 8 year old as like a CD but it's bigger and it is black.
I spend my hard earned dollars on things I attach a value to. I pay the price commanded because I get value back from the purchase. If you need a car for transportation, you are going to buy a real car that runs and will do what you expect it to do. The value you get is the ability to go from point A to point B. Well, how about you buy this picture of a car? It's in color. Pretty cool, huh? You're not going to because it does not offer you any value for the price paid.
Okay, another example. You hit the grocery store a week before Christmas. There's the friendly Salvation Army person ringing the bell as you walk in. You buy the week's groceries and pay, say, $200. Why did you spend $200? The groceries will feed the family is the reason. That is the benefit. It is worth the $200 because you get value for your money. Now, are you going to drop $200 in the kettle at the front door? Why not? Is it because you get no value for making that $200 donation? Might you throw in a few dollars instead? The answer is maybe a few of you will. You will give a couple of dollars because you do not receive any benefit or value from the donation but tossing in $200 is out of the question, right?
When you go to business owners to sell Underwriting, your success is based on the 'value' or 'benefit' the business receives for the price paid. If they see this value, they are willing to pay for it simply because they benefit. When you sell underwriting as in help our little station and we'll mention you on the air, the business owner thinks there is no value or benefit so they surmise the smallest dollar amount without seeming too cheap that will get you out of their office. Why? They do not perceive value or benefit. The value or benefit moves from them to you.
The point is, your Underwriting must have a perceived value and benefit. You could walk out with $200 or you could walk out with a $5. For example, everybody at that restaurant is laying down money to get a benefit from it called lunch. It is a good value to every person there. You leave and at the street corner is a guy with a sign. Of all those cars at the stoplight, how many give the guy some change or a dollar? Not many, right? Why? You do not have any benefit or get any value from doing this but that $9 lunch was paid with a smile.
Your LPFM station sells advertising that builds awareness and instant recall for the business so you are selling a defined benefit that has value to the business, so they will pay for that. If you ask for cash without a benefit or value, most will say no or offer the least money they can. Worst of all, selling advertising and getting donations takes about the same time except I can almost guarantee you'll walk away with 10% of the dollars you could have for your time if you ask for donations.
If you need to buy a book, do you go to that mall bookstore miles away, fight traffic, find a parking spot, walk through a mall to the store that might or might not have it in stock or do you jump online and make a couple of clicks and buy it? When you introduce Underwriting it is as difficult as the mall bookstore.
Underwriting is a radio term. The public does not know what this means. To even refer to the term is opening a can of worms. Now you need to educate and chances are they will still be confused. Heck, we are and we are in the business. If we don't get it entirely how can the business owner who never heard the term? You'll wish for a time machine so you can start over.
It is your job to fit the Underwriting Rules and it is not the business owner's job in the first place. When you start talking about all those rules, the business owner is not interested. Let's say you go to buy a new car. Let's say you want a Mustang, in red and with leather seats and killer sound system. You get to the salesman that says I can't sell you that but I have this nice Ford Fiesta with cloth seats, in white and the standard radio option and that is what you're going to buy, period. In fact my boss says I can only sell these Ford Fiestas, so you must buy it. Is there smoke coming from your feet as you make a mad dash from that dealership? Why then, do you do this when you sell Underwriting?
You see, you can't walk up to a horse and say water. You have to lead the horse and maybe it will drink. You see, you need to sell the benefit and value of underwriting so the business owner will want to drink. And not just drink, but want that bottle of ice cold water you have versus that beer or Mountain Dew you cannot offer them. You cannot leave the option open but sell the benefits and value of what non-commercial stations are allowed to broadcast. So you don't say you sell advertising but that you sell awareness, branding, top of mind awareness advertising that simply says who you are, what you do and how to get in touch.
I really like it to relate to something the business owner knows, so I choose business card. I sell business card advertising that basically says what one finds on a business card.
The business owner should never know the details of what is allowed and not allowed in Underwriting. The best way to reject the request is to say that is not the type of advertising we sell. You might wonder why.
It is true that dangling the carrot and pulling it away is an amazing sales tool. When you pull away the carrot, the potential buyer only wants what they cannot have. Maybe it is our competitive spirit but they start to sell you on why they deserve what you took away. When I'd get calls about airtime at a station that sold daily and weekly blocks of time to programmers, they'd say my hourly rate was too high and if I'd drop my price they would say yes. I'd inject "Well, let's talk about your program because I'm not sure you'd be right for our station". Instantly, the fight was over winning my approval for their show and price per hour was no longer important. You see how that works?
So, when you go to sell underwriting, clearly explain it in terms that the business owner knows and in a way that demonstrates a value and benefit. Once they see the value and benefit, some will want to exceed what you offer, but when you say you are sorry but this is the only type of advertising your station offers, you pulled away the carrot, then can explain how important this sort of advertising is and try for a yes once more. I think every business will say awareness is the most important function of any advertising and underwriting is just that.
PUT ON THE BUSINESS OWNER'S SHOES
Okay, I know you're excited about your station but your excitement is lost on the business owner. When you go in to the business owner you need to craft your words to match their frame of mind and thinking. Why are they there? To earn a living, right? That's the mindset of the business owner and it should be. So talk to this person where they are. How can your station help them succeed more? How can your station make life a bit sweeter for them? What are their problems and issues and how can you counter these with your station? Plainly put, talk to them about how your station does this. And here's a big hint: playing 10 in a row every hour is nonsense. Sure, it might help your station keep listeners and mean more hear their underwriting but rather talk about things they can relate to.
So, what does Underwriting do? Underwriting says who you are, what you do and how to get in touch. That is a plain and simple message. Name one business that does not see value in increased awareness, Now let me ask you if you opened a business down the street from a school and the school said you could come down and tell every person in every seat in that assembly hall for graduation ceremonies who you are, what you do and how to get in touch as well as announce you are right in the neighborhood. How much value would this have to talk to this assembly of adults (aka parents)? If you had a chance to do this for your business, would you? Does this sound like something that would benefit your business?
If you ran a business, would you consider talking to an auditorium full of people in your primary trade area as a way to advertise? Sure you would. It would likely be something of substantial benefit to you. So, you present this Underwriting as a way to reach the primary trade area and tell about yourself to a bunch of people.
Now, public radio designates their Underwriters as supporters. You see, this is the 'bonus' halo effect, about the only thing any non-commercial FM sees as a benefit to businesses. That benefit is your business is associated with the station the listeners like, so they see you more as a friend and would consider supporting you versus another competitor because you support the radio station they like.
So communicating the value of underwriting as an effective advertising venue to the business owner means you speak their language and offer a true benefit and value that makes sense to the business owner. It's all in how you word this. By using terms the business owner recognizes and values, means underwriting is a top notch advertising value for them.
KPCW, Park City Utah
I really love this station. They are mostly talk/news in AM and PM drive, run some good interview shows and have a diverse playlist. In fact, they bolstered my belief that a top selling album that gets no airplay anywhere should deserve airplay and I have heard a few songs I have only heard in my personal music library although the album sold exceedingly well when released.
The real attraction to the music mix is that a guy like me can hear newer material and a good dose of familiar over-played songs and obscure jewels that deserve plays because of sales and quality. If today's musicians are inspired by that group 30 years back that sold millions of an album, then why not play a track or two here or there.
This is a Public Station trying to be a real Community Station. By listening, the station effectively makes you a part of the community. You feel informed and connected. There is so much information on the air, even in music segments, that it sounds busy without sounding cluttered.
From a sales angle, I requested their media kit. The station claims, and I believe them, 55% of their two county area listens to the station. This is reasonable because of the exceptional work they do to connect to their listeners. Even by cost per thousand, their underwriting rates are low but at the rates they charge, few businesses have that size budget to afford a meaningful presence. With this in mind, the station opened itself to an incredibly affordable solution they call MINI UNDERWRITING.
For time management, a Mini Underwriter must sign up for a year and they get a spot at a fixed time every day of the year, my only beef with the plan. I feel times should not be fixed so the client reaches the biggest cross-section of the community as possible versus those listening at a certain time daily.
Mini Underwriters are lumped together with a spot formula that can include up to 5 businesses with a standard intro and the same closing. This means each grouping functions as a single underwriting unit.
The Mini Underwriting is limited to 10 words, written. There's a difference between written and spoken words. For example a website address might be a single written word and a 7 or 10 digit phone number is technically one written word but many words when spoken. In general, Mini Underwriting might be 15 or so words or around 5 to 7 seconds. You can buy 8 daily Mini Underwriting spots for the same cost as their highest Enhanced Underwriting spot. So, these short spots are hugely popular and sometimes sold out.
People act like I have a screw loose, maybe several, when I talk about such underwriting. They balk saying it is a waste of money for the client and wholly ineffective. I disagree. I admit it is not worth much to a little obscure business in a major city but in a place with maybe 60,000, even 100,000 people, it works like a charm. I think some do not realize the evolution in buying habits and influences.
Radio has always held the position of reaching virtually everyone and being the final media used before a purchase is made. Radio is losing that, somewhat. At a pretty rapid rate, the radio is taking a backseat to the device used to listen to over the air signals. That phone you have with you is rapidly taking on the radio receiver. For years now, every business has felt pressure to have an online presence. More and more, the website is replacing radio as the last media used before a purchase. Think about this. You need a certain product or service. Do you exclusively use radio as the only media to determine if you will purchase? Did you recall the address or the phone number? Didn't you go to a website to get the phone number or address or even check out more details or pricing? Many do so and that number continues to grow. Plus the website is viewed as a more personal connection to the business whereas radio was prior to so many being online.
Radio still pushes forward to make a complete package as a safeguard or a 'what if' scenario but the fact is radio has gone online in many, many instances, when it comes to listening and connecting the customer to the business. This means radio is much more important in building awareness than simply acting as the only medium for connecting customers to the business. That is what makes Mini Advertising work so well.
Mini Underwriting used to be one dimensional before 78% of Americans got online. Now it lets the little guy play in the big leagues by acting as a direction finder for connecting customers to businesses.
Another thing I think is worthy of mention is attention spans. Many times our brains are multi-tasking many things at once. The longer Underwriting message may not be as easily retained with so much happening around the listener of radio who typically is at work or in the car and many times interrupted by that phone with a text or call. In my mind, less is more.
KLFT, Layfayette, Louisiana
This Catholic programmed station is in a fairly small city compared to the biggest markets in the USA. They offer some very simplistic Underwriting that is called Business Card underwriting. I love that name because it effectively says to the potential client just what it is. In this instance you will be grouped with others in getting dirt cheap awareness. The copy is limited to the name of the business, the street and the city. For example, it might be "Mike's Auto Repair on Commerce in Pleasant Valley". No street address or phone number.
These spots are simple and are actually good at building awareness and making the audience familiar with the business. For so many years we have been drilled to discount awareness in advertising and never reached the point of recognizing that repeating a business name over and over builds a reputation of being familiar and therefore comfortable in the listener's mind. Now more than ever, radio needs to pay attention to this.
The big boys have and I'll give some examples below.
KXRN, Laguna Beach, California
Laguna Beach is about 25,000 people between a big rock and the ocean. There might be 100 choices on the dial and hundreds of thousands within 10-15 miles from Laguna Beach, but Laguna has a distinct community feel not unlike a small town. It is vibrant and very much its own entity. KXRN understands this.
They actually understand the name mention. I mean simply the business name. One of their long term packages is sponsoring blocks of time. For example, 'The morning show is sponsored by Beach Bum Provisions'. They sell the same 'sponsorship' for news and their surf reports. The only option on the news and surf reports is to either sponsor all the newscasts or all of the surf reports. On sponsoring blocks, it's either the 4 hours of the morning show, 5 hours of midday or 5 hours of afternoon drive. It's all or none. We can term this as branding. Again, a very misunderstood selling factor. And you have to buy 6 months.
They have an exceptional package they call The Pearl Package that is really well thought out.
The person balking about the lack of effectiveness sits in a market with The Toyota Center, Minute Maid Park and works for a station where the news starts with "From the David McDavid Autoplex news desk...' and 'from the Gallery Furniture sports desk...' Let's see, Toyota is pretty successful, you think? How about Minute Maid? Have you every heard of them? David McDavid owns how many dealerships...never counted but it's a bunch. Oh, and Gallery Furniture, the highest volume single location furniture store on the whole dang planet. Obviously these businesses like to throw money out the window, not. Too many times we want radio to be every advertising function it can be for every client in lieu of it being a great tool to reach the masses and work with other media to cover every aspect of your advertising plan. It is very rare that a client only utilizes radio with no other media. How many times have you live tagged a spot with "See today's paper for more details'? You know radio enforces other media making it all work like a well oiled machine when done right.
Yes, now more than ever, we are researchers when we are in the market for a product or service. So, getting on that short list can benefit a business exceptionally while being #5 in that 7 spot stop set on that popular FM means the message is likely not retained without mixing with the other messages, if at all. Sure, the subconscious might hear the message but you know, when I was introduced to 7 people my subconscious never got me straight on everybody's name. If the subconscious really ruled, why run ads anyway, just do subliminal advertising amid the music and be done with it. We could do the news the same way and weather too. Don't know why you brought that umbrella to work with you...hmmm.
I MUST SAY THIS. If you have never run a radio station without enough help, you might not get just how important it is to keep things as easy and simple as you possible can. Mini Underwriting, Business Card spots and sponsorship mentions mean fast and easy copywriting, production and execution leaving much,much more time on the clock for that long, long list you have yet to cross off the list. You might well think the biggest benefit of these short spots and mentions is the time it saves you in operating your station.
So many times we feel compelled to go overboard on things when all that needs to be done is the minimal amount that makes everything work. A good cop takes only the minimal action required to resolve a situation or get things under control. The end result is the minimal works just like the drawn out complicated and overboard plan. At the least, prove me wrong before you try anything else. You might find that in your market I am right. You might find your market is wrong for this but if I was in your shoes, I'd try these short sweet and less time consuming options.
SOME RATES - I tend to think a bit differently. I do not dwell as much on the price per message but what is the amount the business can comfortably spend. Naturally, you must know a bit about your audience. For example, do you have plenty of listeners? Do they listen a few minutes or for hours. If they listen for longer periods of time, then it takes fewer spots to reach all of your audience.
The way you set things up is important too. Your rate with your plan has to make sense to the business and you need to base rates well under 50% sell out...maybe 35% to 40% at most. Why? Sell-out is mostly elusive. You might sell out a few weeks a year but just try to sell out in January.
With this in mind, I look at stations that sell hourly sponsorships. I know of 3 stations that only do an hourly sponsor on the top of the hour. For example, "The next hour of programming is sponsored exclusively by City Cafe at 100 Main, open 7 days a week for breakfast, lunch and dinner. Thank you City Cafe for sponsoring this hour of programming". This is plain and simple. One station really has this right. The hourly sponsors get a different hour each day and their ultimate package gets you an hour 7 days a week for a monthly advance payment. To be all inclusive, you can buy 2 hours a week. Why can they get away with this? They have a format exclusive to the radio dial and are in a small market. This station is lite rock, oldies based. There is a country, a CHR, a classic country AM and a News Talk AM as well as an NPR repeater and 4 or 5 national religious translators. The format caters to long listening times in a small market, so it works well. In fact they sell about 70 to 75 hours a week. They don't need much revenue, have an owned tower site, short stick and minimal monthly expenses, so they charge about $5 an hour...$150 a month for an hour a day, 7 days a week.
One of the better ideas I have seen in a community where many have gardens and crafts-making. They ask for $20, then an automatic $20 a month to be a member. Members can have announcements on demand at any time during the year. These announcements air 5 times every day. All announcements run together as a 'day calendar' sort of feature. This time also features other community announcements but members are clearly identified. One might wonder why a farm would buy a full year. Why not go on a month or two and cancel. The answer is simple. The weekly and monthly rates are much higher. They charge $40 a week for up to 35 mentions or $150 a month. With a year at $260, you can use the station anytime you want. This is a very unique community with lots of gardeners, craft/hobby types and only a handful of small businesses. A couple of the storefront businesses buy and there's a church that buys a half an hour each week.
What I really like is these announcements are almost newsy. For example, Member Dave Perkins is picking tomatoes from his garden today. Dave's stand is located at his home at 2200 County Road 6. Dave says the green beans will be ready in about a week. Member Cindy Stewart has made a new batch of soap bars in coconut and wintergreen scents. Cindy's soap bars are available at her workshop on 4100 County Road B daily from 10 am to 4 pm. Station member, The Thrift Shop, next to the post office has received a few men's suits and some children's toys. They are open Friday afternoon and all day Saturday. Thus, the 5 times a day they read everything might sound more like a daily calendar for the community rather than a bunch of Underwriting spots. And they sell the same to non-profit organizations that want to get announcements anytime they need.