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.