And now for something completely different...

This "economic downturn" has really messed up my life. I know I'm not the only one, and I know that there are many who have been affected in worse ways than me, but it has been very tough to handle. MILLIONS of lost jobs, MILLIONS of foreclosed homes, and it looks like things are going to get worse before they start getting better. God help us.

I don't know about you, but I like to know how things happen. I want to understand so I can do my part to help others understand, and so I can use my knowledge to make my life and the lives of people I care about better in the future. If you want to understand how we got into this mess, I recommend two articles written by Matt Taibbi, Contributing Editor for Rolling Stone Magazine. They will piss you off, but you will understand how this all came about.

The first article is in RS Issue 1075 dated April 2, 2009. The title is "The Big Takeover" and the subtitle is "The global economic crisis isn't about money-it's about power. How Wall Street insiders are using the bailout to stage a revolution." To make his point, Taibbi first lays out the history of America's economic system from The Great Depression to this current recession. This article will teach you more than you probably ever wanted to know about economics and the financial industry, but the main lesson it teaches us is that failing to effectively regulate greedy people who will without conscience destroy the lives of people and blow up the country's financial infrastructure in their quest for obscene and irrational personal wealth can eventually destroy America. As it turns out, the unregulated greedy bastards are the very people who have been running the financial show in America for as long as all of us have been alive.

The second article is in RS Issue 1082 dated July 9, 2009. The title is "The Great American Bubble Machine" and the subtitle is From tech stocks to high gas prices, Goldman Sachs has engineered every major market manipulation since The Great Depression-and they're about to do it again." The economic "bubbles" Taibbi is referring to are:

1. The Great Depression
2. The Tech Stock Craze of the 90's
3. The Mortgage Madness
4. $4 a Gallon Gas
5. The Recent Bailout of a Privileged Few in the Financial Industry
6. Global Warming

The first five already occurred and they devastated the lives and financial security of millions of American citizens and taxpayers. And yet, they made Goldman Sachs executives richer than any of us can ever dream of being, much less ever hope to be. They represent intentional manipulations of markets with the purposeful intent to make a very small group of people filthy rich at the expense of millions of hardworking and unsuspecting Americans, not to mention the financial health of the nation. Number six is in the works and Goldman Sachs has the infrastructure in place to once again reap billions, if not trillions, in profit off the backs of American taxpayers. 

I should point out that I am the kind of person who scoffs at conspiracy nuts. The information in these articles is not unsubstantiated rants aimed at one political philosophy or another These articles are extremely well-researched and packed with sources, dates, and factual substantiation. That's what makes them so maddening. They expose massive greed and corruption at the highest levels of the financial industry with the aid and cooperation of government officials from both parties. 

You may be asking, "Why is this relevant on a blog dedicated to radio and advertising? Do I need to point out all the ways that Wall Street has damaged our beloved radio industry? The second we made ourselves subject to the analysts and speculators, radio ceased being about delivering quality content to our listeners and measurable results to our advertising clients. Instead, it became all about serving the spreadsheet mentality of people who have never even set foot in a radio station. These financial jerks wouldn't know good programming if it walked up and slapped them in the face and they don't have a clue about how and why advertising works. They just know that if you lay people off, voice track as many shifts as possible, and cut back on essential support expenses like training you can grow margin in the short term, which is all they need to temporarily prop up stock prices. That way they can take their bonuses and their commissions and to hell with the rest of us.

Some people want to blame radio's woes on iPods, satellite radio, and the internet. That is utter rubbish. Wall Street has been sucking the soul out of radio since the late 90's and that is why radio is struggling today. Thank God for the privately owned and independent operators, especially in medium to small markets. Right now, they are radio's last line of defense against Wall Street's destructive influence. They are struggling as much as the public companies in this economy, but their battle plan is to rely on radio's greatest strengths, rather than getting into bed with the enemy. They are proving that we can still recapture our greatness by super-serving local listeners and advertisers. Radio has always drawn national strength from the combined local focus of individual stations. Without localism, radio is just one more faceless and soulless audio stream. We cannot survive in that arena.  

It is up to each of us to make sure we become and remain informed. We must make our voice heard in every way possible. These greedy bastards rely on ignorance and apathy to do their dirty work.  We have to join together as part of a grass roots uprising of Americans demanding a fair shot at the American dream and a playing field where no one is exempt from the rules of fair play. We may not be able to completely defeat the greedy bastards, but we must be more than sheep being ignorantly led to slaughter. Those of us in radio must fight for the soul of our medium. Our future depends on it.

Knowledge is power. Power to the people! Happy Independence Day weekend. 
 

Yesterday I posted some thoughts on the role human memory plays in advertising. There is so much more to know about the topic so I thought I should add to your understanding today.

Humans possess multiple types of memory, but there are two that are most related to advertising. The first is short-term memory, also known as working memory. Short-term memory is similar to RAM on a computer. The second is declarative long-term memory which is much like the hard drive on a computer. The relationship between these two memory types is that most declarative long-term memories start out as a short term-memory and then get converted to a long-term memory. Even long-term human memories are subject to being forgotten, but there are factors that lead to some memories being retained for longer periods of time. The first factor is emotional impact. The more impact an emotional event has in your mind, the longer the memory of that event will be stored. The second factor is periodic recall and retrieval. The more often you access a memory, the longer it will be stored.

It's extremely difficult to build enough emotional impact into a commercial to cause it to be stored permanently, but emotional content will definitely aid in the process. Multiple retrievals is a factor you can definitely use to increase the long-term storage of an advertiser's message. You simply provide consumers with a steady stream of reminders. In radio we call this technique frequency. The problem is that, in too many instances, we fail to sell radio in a way that provides effective frequency for the advertiser's message. That's a shame because frequency is more affordable on radio than on any other core media. This is especially critical when money is tight. Can you say recession? 

The point that I am trying to make with all this is, as I stated yesterday, if a consumer has no memory of a business in their mind, that business has little to no chance at that consumer's business. I define branding as "The establishment of an associative memory in the long-term memory of a consumer that links a product or service category to a specific provider." In other words, when you think of furniture, which furniture store do you think of first? The name that just popped into your mind is the company that is most branded in your mind. If you decide to buy furniture, that store has the greatest chance of ultimately getting your business. The percentage of consumers in your market who also think of that same furniture store first represent that store's mind share. Mind share leads directly to market share, and market share is the battlefield of business. The goal of advertising is to build, increase, and sustain mind share so that the advertiser can maximize their market share.

One last point. In any given week, in any given market, and in any given business category, there is a percentage of consumers who have an immediate need or desire for the product or service being sold by any business in that market. Let's call those consumers "now" buyers. An effective weekly frequency accomplishes several important objectives for an advertiser. First it allows the advertiser to maximize their share of the "now" buyers. Weekly frequency also is the starting point of an advertiser's attempts to effectively brand their business. In other words, it will insert a short-term memory of their message into the minds of consumers in their market. The final role frequency plays in the advertising process is that it causes retrieval of memories. These retrievals lead to memories of an advertiser being stored longer in the minds of consumers. That's why it is so important for an advertiser to make a long term commitment to their advertising. Failure to advertise consistently leads to forgotten messages, which also provides competitors with an opening.

Businesses that understand these memory dynamics and practice them consistently are the businesses that believe the most in advertising. Why? Because it has made them successful. Radio sales people who understand these dynamics and share them with their customers are the ones who have built the best personal brand for themselves in their companies and in the minds of their clients.

No memory of a business means no awareness of it. When too many people are unaware of a business, that business fails. As a radio sales person, the best way to become memorable to an advertiser is by helping them do memorable advertising. 

If you'll go back and re-read yesterday's post with all this in mind, you will get even more insight from it.

Now go out and do something memorable!

  

Recently, the renowned neurologist and author Oliver Sacks (see picture above) was on The Daily Show to promote his new book, Musicophilia. He talked about the unique ways that music stimulates the pleasure centers in the brain. 

His words reminded of why I named my blog Brain Sells.

To understand how and why advertising works, it's important to have a rudimentary understanding of how the brain works. The two topics are inextricably linked.

I am going to grossly simplify the explanation of this science, mostly because I am not intellectually qualified to do much more than that. Successful advertising plants a memory of a product, service, or business in the minds of people who are exposed to the message. If any of those people acquire a need or a desire for the product or service that was advertised, they recall the advertiser's message and seek them out to satisfy the need. In other words, if the prospect doesn't think of the advertiser, they can't think to go there.

What makes people remember one company over another? The three primary factors are message format, frequency, and consistency over time. I'll leave two of those for future topics, but I do want to address message format.

Thoughts that stimulate the pleasure and pain centers in the brain are most likely to become memories. If a commercial stimulates pleasure in the mind, that person will relate that pleasure to the product or service being advertised. An example would be a commercial for a jewelry store that says, "Just think of all the ways she might show her appreciation for a diamond." Woo-hoo!

The converse strategy would be to stimulate a painful thought and tie it to a failure to buy the product or service. For instance, an insurance commercial may pose the question, "If something were to happen to you today, what would become of your family tomorrow?" Ouch!

Ask yourself, "Do things like store hours, credit cards, years in business, phone numbers, or tired old advertising clichés stimulate my brain's pleasure centers?" No way. They do not, therefore, stimulate brain sells.  

To bring this full circle, I would like to point out why jingles have been so effective throughout the history of advertising. When you were a small child, you had memorized the lyrics to hundreds of songs before you ever learned to read. As Oliver Sacks points out, music stimulates the pleasure centers in the brain like nothing else. Music is memorable, so musical commercials make their message more memorable. There are lame jingles to be sure, but a good jingle is one of those gifts that keeps on giving.

If you can't get into someone's brain, you won't get their business. Stimulating people's minds is economic stimulus that you can count on.

I suddenly feel like listening to "Money" by Pink Floyd!

Later.

On July 20th we will celebrate the 40th anniversary of the "One giant leap for mankind". The very idea of a human walking on the lunar surface still boggles the mind, but when you consider the comparatively crude technology of the time, the feat is almost impossible to fathom.

I once read a great personal improvement booklet that offered an interesting perception on achievement. It said that, during the trip from Earth to the moon, the lunar module was off course more than 90% of the time. But scientists knew that they could make the necessary course corrections on the fly. They also realized that if they waited until they could be assured of a true course from liftoff to lunar landing, the astronauts would probably never leave the blue planet, much less achieve President Kennedy's prediction of putting a man on the moon by the end of 1969.

Those of us in radio are facing some very real and very modern problems today. But as daunting as those problems may seem, they are no more so than flying to the moon using 1969 technology. How many of you are postponing making changes until you are assured of a true course? Perhaps it's time to identify the objective, create a plan that is less than certain, and then make a leap of faith and just go for it, knowing that some mid-course corrections may be necessary. You're smart enough to know if you are starting to veer off course, and you're smart enough to figure out the necessary adjustments to get back on course.

If you wait for the perfect plan, you may never know what it feels like to walk on the moon.

Prescription without diagnosis is malpractice. 

Suppose you woke up feeling ill this morning. So, you call your doctor's office and get an appointment. You arrive and soon you are ushered into an examination room. In a few minutes the doctor joins you, but rather than asking any questions, the first words out of his mouth are, "Let me tell you about this new medication we have. It's a real wonder drug. I'm going to write you a prescription and you should begin taking it right away." And with that, he moves on to the next patient.

Surely you would re-think your choice of health care providers.

But how is that any different from starting a client meeting by saying, "Thanks for agreeing to meet with me today. The reason that I am here is to tell you about this great new package that we have." The fact is, it's not different at all. These meetings leave many clients feeling the same way you would feel in the medical example I just described.

If a doctor prescribes the same medication to all of his patients, there will be a small percentage of them who have an ailment for which that drug would be an appropriate treatment. Most would either not get better or would actually get worse.

Same thing with our packages. The operative phrase here is "small percentage" because, in the case of package sales, that percentage is also expressed as your closing ratio. Typically, package closing ratios hover somewhere between 10%-15%. When the entire sales staff is presenting the same package to everyone who agrees to meet with them, the end result is that there is a brief influx of sales. So, to a manager who is trying to create a spike on a spreadsheet, this approach to selling seems to work. But there are some other questions that need to be asked:

1. Is a sales strategy that results in a 10%-15% closing ratio the best way to achieve maximum yield from a sales staff's investment in time and effort?
2. Does package selling position you against your competitors in a positive way?
3. Does package selling significantly contribute to the building of relationships with your customers?
4. What impact does package selling have on your long-term pricing objectives?

One last point. Packages are not inherently bad. It's our methodology of prescribing them that results in advertising malpractice. To avoid being perceived as an incompetent doctor, all we have to do is make sure we properly diagnose the customer's needs before prescribing a course of treatment. The client needs analysis (CNA) is the single most important step in the sales cycle. Once you have discovered a need that matches up well with a package you have, then prescribe away. If you limit your presentation of packages to clients that have matching needs, you significantly raise your closing ratio on that package while freeing up time to spend with other customers who have different issues that you can also effectively address.
 
 

"I would like to get rates for advertising on your station. I have a limited budget and I'm only interested in morning drive and afternoon drive because that's when everyone is listening." I wish I had a dollar for every time I heard that when I was a sales person.

What those prospects were really saying was, "I have limited advertising funds and I want to make sure I reach as many people as I can with what I have to spend." It's not hard to see how an inexperienced advertiser would logically arrive at that conclusion. If a prospect says that to you, you must choose one of two responses. You can say...

1. "I can do that. How much do you have to spend?"
                                 or
2. "Let me explain the difference between reach and frequency."

Unfortunately, the first impulse many sales people have is to seek the path of least resistance. So, they take the client's money and run a schedule that is long on reach but woefully short on frequency. The next sales person to call on that client will probably hear the dreaded phrase, "We tried radio once. It didn't work."

But it is equally bad to try to explain reach and frequency by using ratings terms like gross impressions or unduplicated cume. You might as well be speaking in Swahili. For those of you who understand why a client with a limited budget should choose frequency over reach, here is a way to demonstrate the concept in a way that is easy to understand.

"I can understand why you are concerned with reaching as many people as possible. But I should point out that what we really want to do is reach as many people as you can afford to reach with an effective level of frequency. Let's pretend that I own a stadium that holds 100,000 people. And let's say that you are interested and advertising your business to the people in my stadium. I have two plans and they both cost $1,000 which is, coincidentally your budget. With Plan A, I will allow you to communicate your message to all 100,000 people but you can only do it once. With Plan B you can only communicate your message to 10,000 of the people in my stadium, but you get to do it 10 times. Both plans result in your message being heard a total of 100,000 times, at a cost of one cent for each time it's is heard. Which plan would you prefer?"

The client will almost certainly choose Plan B. Then you say, "So you see the wisdom in sacrificing 90% of the reach to gain a level of frequency that will actually yield better results from the same investment?" Then you finish by saying, "That's why, based on your budget, I think it might be a better idea to look at dayparts that have less reach than our drive times.  The advantage is that you can  dominate smaller dayparts with frequency. You'll see a much better return on your investment."

Not only will your client see better results, but they will also see you as more credible than any "path of least resistance" sales people they may have encountered in the past.

Of course there are many other things to consider when trying to help your clients succeed, but at least you are now on the right path. 

Mark Twain once said, "The man who doesn't read good books has no advantage over the man who can't."

I agree. So, I thought I would give you the titles of some great books that will, if you read them, give you a real advantage over those who won't.

The 7 Habits of Highly Effective People by Stephen Covey- The guy who turned me on to this book told me this as he handed me a copy, "Read this book and it will change your life." He was right. If you're just not that into self-improvement, define each of the seven habits based on how they apply to selling and this book becomes the greatest sales training book ever written.

The Wizard of Ads, Secret Formulas of the Wizard of Ads, and Magical Worlds of the Wizard of Ads all by Roy H. Williams- This trilogy tells you all you need to know in order to truly understand how and why advertising works. These books are timeless and brilliant and fun to read to boot.

Covert Persuasion by Kevin Hogan- Hogan is the modern master and teaching people how to communicate with the spoken language and body language in a way that makes persuasion almost effortless.

Subliminal Persuasion by Dave Lakhani- Along the same lines as Hogan's stuff and especially good for anyone who wants to learn how to write powerfully effective commercials.

Outsell Your Competition by Robin Fielder- The best nuts and bolts book on selling I have read in a very long time.

S.P.I.N. Selling by Neil Rackham- Rackham's researchers accompanied sales people on over 35,000 sales calls, collected and compiled the data, and arrived at some very interesting findings. For instance, one style of selling will work very well in some industries but lead to failure in others. A must for people who want to understand the science of selling.

The 33 Ruthless Rules of Local Advertising by Michael Corbett- This book explains the science of advertising in layman's terms. It will teach you how to talk about advertising with advertisers who don't know as much about advertising as they think they do.

Well, that's enough homework for now. I wouldn't wait too long to get started. Every sales call you make is a pop quiz and flunking can be very expensive.  

They say that money is the root of all evil. I don't agree. I think it is more accurate to say, "Greed is the root of all evil." People are willing, even likely, to do some really nasty stuff to each other to acquire monetary and material wealth. I have coined a new adage that bookends with the observation on greed..."Arrogance is the root of all folly." Almost all of the major screw-ups made by people were the result of an arrogant mind. Arrogance comes in a variety of forms, including:

Thinking you know everything.
Thinking the things you don't know aren't important.
Thinking you know things that just aren't so.
Thinking that you know more than everyone else.
Thinking your authority means you are smarter than everyone who has less authority than you.
Thinking you can accurately predict the future.

Don't get me wrong. Anyone can make a mistake. That's what makes being human such a great adventure. It's just that mistakes of arrogance tend to much more grandiose because of the utter lack of caution in a supremely certain mind.

When you mix greed with arrogance you're really asking for trouble. Think about it. That combination is exactly what brought our economy down. I don't know why some people find it so difficult to understand that you can be ambitious without being greedy and you can be confident without being arrogant. The characteristics that separate good from evil are compassion and consideration. Great countries, great industries, and great companies are careful to bestow authority only on leaders who temper their ambition and confidence with compassion and consideration for the people whom they have been selected lead.

Let's hope we get more of that kind of leadership as we try to climb out of this hole the evil bastards dug us into.   

As you may or may not know, there has been a controversy regarding this year's Mercury Awards. Tom Taylor of "Taylor on Radio" asked a thought provoking question of his readers. He asked, "Should the Radio Mercurys be about ROI, and not just creativity?" I sent the following reply to his request:

We know that creativity and ROI are not mutually exclusive. We also know that entertainment value will not necessarily deliver results. (Yo quiero Taco Bell?) All commercials have a primary purpose. Commercials that fail to generate a return that is at least equal to the norm for advertising in their respective industry should be deemed to be bad commercials, regardless of their artistic or entertainment value.
 
Radio has two customer bases, listeners and advertisers. If we, as an industry, want to judge commercials and reward excellence, the judging process should score entries on the value they bring to both of those bases. Leaving either out of the process will result in awards that can rightfully be questioned by those in the industry who are observing the process.
 
I do not know the specific make-up of this years Mercury Award judges so I will not critique the panel. I will state my general opinion that a judging panel made up mostly of people from advertising agency creative departments is likely to result in an incomplete perspective and a judging process that is skewed disproportionately toward production values and artistic merit.
 
David Letterman was recently forced to acknowledge that intent doesn't matter much when public perception turns negative. In regards to its involvement in the Mercury Awards, the RAB's intentions are above reproach. Unfortunately, this year's process resulted in a negative perception that needs to be addressed. I'm confident the RAB will do just that. I also think that those who used this occasion to attack the RAB's overall value to the industry should take a deep breath and dial down their criticisms to a more appropriate level.
 
Lastly, I am actually gratified to see this debate taking place. The quality of the commercials we include in our broadcasts is a vital issue to the overall health of our industry. Let's all work together to elevate their quality to a level that benefits both our listeners and our advertisers. If we do that, the real winner will be Radio.

I thank Tom for doing his part to keep the dialog going, and I thank the RAB for helping to create a competition that encourages excellence in radio commercial production. The issue impacts us all, so we should all be engaged in the process of writing, producing, and encouraging radio commercials that stimulate listeners and consumers alike. This is not a top down effort. This requires effort at the station level, which means if you work at a station you can make a difference. I can't wait to hear what you come up with.

Do you want to make more money? I know, dumb question. It's not my first. Anyway, I know you want more money, and today I will tell you how to make more money. (BTW, this information applies to commissioned sales people only)

You only have three options available. They are:

1. Increase your closing ratio.
2. Increase the average size of your orders.
3. Increase the number of sales presentations you make.

It's that simple. Okay, you probably want a little more information than that.

1. The first thing you need to know is what your closing ratio is now. If someone were to ask you, could you tell them exactly what your closing ratio is? I'm not talking about a guestimate. Like with anything else, step one in improving is identifying where you are starting from. There are some variables in this equation that you could use to fudge the numbers. For instance, you could reduce your presentations to "sure deals" only and your ratio would shoot up, but you would make less money. (see #3 above) Or you could decrease what you charge, but again you would lose money. (See #2 above) So we have now established that to make more money you have to increase at least one of the above while keeping the other two at least the same. Out of the three, increasing your closing ratio is the most difficult for most sales people because it generally requires some changes in selling behaviors. Things like doing a better job of qualifying prospects or doing a better job of analyzing your prospect's needs. The fastest way to increase your closing ratio is to get some great training and then use what you learned. I have some very good training in case you or your manager are interested.

2. Increasing the average size of your order is actually the easiest of the three, but it may require a serious discussion with yourself. Ultimately, you just need to ask for more each time you present. Higher rates, more spots, additional products (interactive, NTR, etc.) are all ways you can increase your order size. Every time you write a proposal, increase the amount you usually ask for by 25% and see what happens. One more tip, you will need to be ready with a sound rationale in case the client asks why you are asking for more than you usually do. If your plan is sound and it addresses a real need you know the client has, you don't have to be dishonest. You just have to be confident and articulate.

3. Increase the number of presentations. This can only be accomplished by getting better at time management. Plan each day. Prioritize your activities. Do not get sucked into activities that don't contribute to getting in front of a client or prospect until you have accomplished all your important activities for the day first.

Any one of these methods will increase your income. We have already established that they are all inter-related. So, if you increase all three you will see a significant increase in your earnings.

Now we find out if you REALLY want to make more money.