Doc Holliday on Radio, Sales, and Revenue

Power to the people!

2009-07-02T20:25:00Z

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.

The Long and Short of Human Memory

2009-07-01T15:45:00Z

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!

Making Music, Memories, and Money

2009-06-30T17:52:00Z

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.

Want to walk on the moon?

2009-06-29T23:44:00Z

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.

The Package Prescription

2009-06-29T14:44:00Z

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.

Reach versus Frequency

2009-06-25T23:59:00Z

"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.

Feed your mind!

2009-06-23T23:27:00Z

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.

Roots

2009-06-23T02:43:00Z

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.

How should we judge a commercial?

2009-06-22T02:41:00Z

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.

Gimme More More More

2009-06-19T01:55:00Z

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.

Failing to Fail May Lead to Failure

2009-06-17T21:48:00Z

What is failure? Let’s define it as an outcome that falls short of expectations. Based on that definition many of us fail to some degree every day. Expectations should be tempered by the difficulty factor. For instance, in baseball a great hitter fails to get on base seven out of every ten times at bat. In radio, however, a thirty percent closing ratio would be considered below average for a veteran sales person. The degree of a failure is determined by the severity of the resulting consequences. In the workplace, failure can result in consequences that range from minor disappointment to the loss of your job. But, generally speaking, failure is viewed as a bad thing.

But that’s not necessarily true. For instance, failure can be evidence of effort. You’ve heard the saying “Nothing ventured, nothing gained.” It would be equally true to say, “Nothing ventured, nothing failed.” We also learn a lot from failure. So how about, “Nothing failed, nothing learned.” Claiming to have never failed is tantamount to claiming that you never tried to accomplish anything. That’s hardly a badge of honor. Most great accomplishments were preceded by many more failures. Thomas Edison failed over 3,000 times before he found a light bulb design that worked. We honor him and his invention, but in many companies today he would have been fired long before he ever fired up a filament for the first time.

To keep failure in the proper perspective, here is a list of things a good organization should understand about failure:

1. You should know your industry’s baseline failure-to-success ratio.
2. A lack of failure is as big of a red flag as a lack of success. Failure is a natural result of innovating, experimenting, and attempting to do difficult things. That kind of failure precedes success.
3. Fear leads to paralysis. When people are afraid to make mistakes they become afraid to do new or difficult things. Your organization cannot achieve maximum success if your people are afraid to fail. Over-reacting to failure can be as counter-productive as under-reacting.
4. You should have a non-threatening post-analysis system in place to examine failures. Ask a lot of questions, drill deep enough to determine the exact cause of the failure, and discuss the failure until everyone is in agreement regarding the lessons to be learned and the changes to be made to avoid the same failure going forward.
5. Possible causes of failure include:
    a. Lack of clarity regarding expectations
    b. Unexpected variables
    c. Insufficient training
    d. Human error
    e. Unrealistic expectations
    f. Insufficient effort
    g. An employee’s incompatibility with the job description

Reward success. Analyze and discuss failure. Think about the effect that your response to failure is going to have on your organization. Failure is going to happen, but if your repertoire of responses to it is limited to beating yourself up, berating others, threatening employees, and firing people then you are missing out on all the organizational and personal growth that can result from failure.

E-Money

2009-06-17T00:51:00Z

I promised to be brief today. Here are bite size tips on generating local online advertising revenue.

1. Businesses are spending billions on local online advertising and marketing.
2. Radio is doing a terrible job of getting our fair share of this money.
3. Traditional newspaper advertising may be dying, but they are doing a great job of getting local online advertising budgets. Study them.
4. If most of the content on your station's home page isn't updated daily, your website is not set up to make money.
5. If you aren't helping your customers get online co-op dollars from their vendors, you are behind the curve.
6. If you are looking for rich categories of online revenues...a good place to start is the classified section of the newspaper.
7. If you are not offering online video products to your local advertisers, you are way behind the curve.
8. Pursuant to number 7, every station sales department should have at least one digital camcorder, every sales person should know how to use it, and someone in your station should know how to edit and upload video clips and how to link them to your site.
9. If you are still trying to sell banner ads for $500 a month you will continue to be disappointed with your results. If you actually get someone to buy a banner ad for $500, they will be disappointed with their results, as well.
10. Online products will play a growing part in radio's future efforts to generate revenue. Embrace it. If you haven't done so already, start doing research on online advertising right now. Where should you go to find this information? Online, of course!

Make the Bad Commercials Go Away!

2009-06-16T01:24:00Z

In yesterday's Radio Business Report there was an angry letter from someone who was unhappy that the latest list of Mercury Award winners did not include any entry from the "Station Produced" category. For those of you who don't know, the Mercury Awards are a program that was initiated by the RAB to encourage higher standards in the production of radio commercials by offering cash prizes for entries from a variety of categories. This year's judging panel decided that there were no entries from the "Station Produced" category that were deserving of recognition. The writer said this was tantamount to the RAB telling Radio, "You Suck." He went on to say that he had canceled his membership and he was encouraging others to follow suit. Talk about over-reacting!

I do not want to address the Mercury Awards judging process.There was enough debate on that topic yesterday. I do, however, want to take the opportunity to point out a problem that radio has had for years. Every time a radio company does a focus study, they ask test subjects, "What do you like least about radio?" The number one answer every time is "Too many commercials." I will tell you right now that isn't the problem. The real problem is too many BAD commercials. There are commercials that people actually enjoy. I'm sure you can think of a few that you look forward to hearing again. But there are far too many that are offensive. Some insult a listener's intelligence. Some contain horrible elements like those phony sounding conversations. Some are riddled with cliché's. Many are chock full of information the listener couldn't care less about. I could go on but I'm sure you know exactly what I'm talking about.

And the truth is that many of those bad commercials were produced inside a radio station. There is a real lack of understanding of the psychology of copywriting and there is a real lack of appreciation for how important effective copywriting is. I know there are some good commercials produced in stations, but the exception does not disprove the rule. There are a number of reasons for the poor quality of many station produced commercials but the underlying reasons are always the same...time, money, and talent. Several years back, while I was working on the station side, I wrote a script for a local client that was going to require some fairly involved production. I took it into our production manager. He went on and on about how nice it was to get good copy for a change from someone in sales. I told him it was my intention to start working toward getting the sales people to raise the standards for copy in the hopes of producing more quality commercials. That's when he looked at me and said, "If you think we can produce this kind of commercial on a regular basis you're kidding yourself. I don't have that kind of time time." We don't have the time to produce good commercials so our clients will just have to settle for crap because it's all we have time to produce? What's wrong with THAT picture?

Don't confuse entertainment value or awards with effective commercials. A Mercury Award for a commercial that fails to get the desired results is meaningless. Conversely, a commercial that gets results and converts a prospect into a satisfied customer is gold whether it wins an award or not. We don't have time for a class in creative here, but I can give you a couple of quick pointers. I once read that if you are selling fire extinguishers, lead with the fire. No one cares how many years the fire extinguisher company has been in business. The listener only cares if their fire will be extinguished. Humor is only good if it relates to the product and the listener. A listener who laughs but doesn't buy is meaningless. Good commercials cause the listener to test out the product or service in their imagination and to enjoy the mental experience.

It takes talent to write good commercials. Some stations have people with that kind of talent working for them. If you do, fine. Make sure the standards of your productions match their talent level. If you don't have that level of talent, you can do one of two things. You can hire it, or you can outsource your production. Both approaches will probably require charging the client for the production. So what? All the other media do it. It's not that hard to explain how "free" production is almost always more expensive than paying for good production. Whatever you do, don't start charging and then deliver the same old sonic junk. Clients ultimately determine the value of their investment based on results. Without results, it doesn't matter how cheap your spots are.

Damn. I was hoping this one would be short. Oh well, I'll try for more bite size morsels tomorrow.

Save the RAB!

2009-06-13T18:44:00Z

At 11:00 am on June 11, a second wave of layoffs hit the staff of the Radio Advertising Bureau. I was part of the first wave that happened in January so I know what those who lost their jobs felt like. It wasn't the first job I ever lost, but it was the best job I ever lost. But this time it's not about me.

I'm still trying to wrap my mind around these latest layoffs. Of all the comments already written about them, Eric Rhoads, publisher of Radio Ink, wrote an especially in-depth piece. He made a number of thoughtful observations, but his very last paragraph perfectly sums up my sentiment. He said, "Sometimes it's difficult to quantify the value received from organizations like the RAB, yet there is tremendous immeasurable value, and we as an industry should not let RAB become a casualty of this economy. It plays a necessary role for radio, and we should do anything in our power to keep it relevant and alive." Amen bro.

The RAB operates on income generated by membership dues and from the sale of additional products and services designed to support radio's local and direct sales efforts. The reason behind the layoffs is the lost income resulting from the decision by a number of radio stations and companies to cancel their memberships. It's not hard to understand why the people at the top of radio made these decisions. It's one less expense on their spreadsheet and it won't affect their daily lives at all. It's the people at the bottom of the org chart, the local sales people, who need the RAB the most, and who's jobs are now more difficult as a result of a decision they had no voice in.

If this trend continues, Radio faces the very real possibility of losing the RAB altogether. Without the resources and support they provide, radio could wind up being represented by a generation of local sales people who lack training, who don't have access to information on the businesses they are attempting to serve, and who have nowhere to turn for support and assistance when they encounter challenges they don't know how to overcome. That could do great harm to the way radio is perceived by the advertising community, which any radio sales person will tell you is a challenge that they already have to deal with on a regular basis.

Eric speaks of Jeff Haley's attempts to bring radio into the digital era. There's an old saying about leading a horse to water. In many cases, it's more like he's trying to lead mules. I mean, how much evidence is it going to take before reluctant radio companies finally realize that there is a transformation taking place and they have already let the first and second waves pass them by? Many have refused to adequately train their employees or to hire people who are actual experts in creating content and selling interactive products. Radio sales people are very frustrated. Many have been given interactive billing goals but all they have to work with are lame websites, outdated products, and overly-optimistic rate cards. Over the past decade local advertisers have become too sophisticated to buy into over-priced banner ads on a website with limited visitors. Other industries are doing it right. Why can't we? At the RAB, John Potter has done an excellent job of creating a powerful interactive sales training curriculum that has already helped many sales people. But many more work for companies that to date have not provided them with this valuable information. I respectfully submit that this is costing those companies much more than it's saving.

My concern for the industry is surpassed by my sadness at learning that friends of mine lost their jobs. To a person, they are extremely bright people and true radio professionals who have dedicated their careers to the betterment of radio and its people. I would add "great leader" to my description of Mike Mahone. Now they've been cast aside as nothing more than an unpleasant but necessary business decision. They all deserve so much more from an industry to which they've given so much for so many years.

What becomes of an industry, indeed a country, that rewards effort, accomplishment, and loyalty with an unceremonious kick to the curb? That is what some in the radio industry are doing to the RAB. It's what corporate America and Wall Street have done to the middle class. Surely there will be a day of reckoning. How many more good people will have to have their lives screwed up before it arrives?

I encourage all sales people to make sure your company knows how important the RAB is to your ability to do your job. And I encourage you to make sure you take full advantage of the services and resources you are entitled to as part of your company's membership. If your company chooses to not provide you with this important advantage, I strongly encourage you to consider signing up for the new individual membership plan they now offer.

Saving the RAB is crucial to saving Radio. Let's not learn that the hard way.

Bite Size Sales Advice

2009-06-12T12:20:00Z

As I pondered my entry for today I was struck by two thoughts. First, I figured it was time to dispense some actual sales advice. Second, my first two entries were sort of wordy, so perhaps I should try to be more concise. After all, we are living in an era where people are just too busy for complete coverage of any issue. We want sound bites so we can get the idea and then move on.

OK. Here's some bite size sales advice.

1. Stop pitching packages and "ideas" before you have spent even one meeting with your customer discussing their business, their challenges, and their objectives.
2. In the process of selling, sentences that end with a question mark are significantly more productive than sentences that end with a period.
3. If you must use a sentence that ends with a period, you will get much better results if it contains the words "you" or "your" rather than the words "we" or "our".
4. Dress ten percent better than the person you are meeting with.
5. Improvisation is for comedy. To be successful you must have goals and you must have a plan to achieve them.
6. The harder a person works for a deal, the more satisfied they are with it.
7. If you are not willing to walk, you have no business negotiating price.
8. Win/Win is the only way to go.
9. Your actions will cause you to be perceived by your customers in one of three ways...worse than the competition, the same as the competition, or better than the competition.
10. Nothing you do is neutral. Everything you do either moves you closer to success or further away from it.

I hope I didn't take up too much of your time. Have a great weekend!

Mmmmm...Gravy!

2009-06-11T16:59:00Z

Look people, I know times are bad. Real bad. But there is a disconnect inside many radio companies that is compounding the revenue problem. When so many advertisers are either cutting back on advertising or eliminating it, each and every sales encounter is critical. The closing ratio is more important than ever. We've all heard Einstein's quote that says the definition of insanity is to continue doing things the same way and expecting different results. People do what they know how to do. If you want people to do something better, they must be taught a better way to do it.

In other words...they need training. But training is being denied in a recessionary attempt to limit expenses. This is a spreadsheet mentality which is being misapplied to this vital issue. Training is not a line item expense...it is a necessary investment. This is true in all industries, not just radio. Training is how you improve the performance of existing employees and how you maximize the return on your investment in new employees. To deny training is to suppress the ability of people to succeed. It is penny wise and pound foolish.

But the upper tier decision-makers in radio are faced with tremendous challenges right now, and those challenges are understandably shaping their perspective. Wall Street and corporate CFO's are not going to suggest spending money on training. Thus, the disconnect. So it's up to the training industry, trade organizations, state associations, and sales people themselves to make sure that training is included in all ongoing discussions regarding what needs to be done to address current revenue challenges and radio's preparation for the future.

At the risk of sounding like a sales pitch, let me just state that training is not an expense. It is a necessary investment that offers the quickest and most significant return of all the investments that a radio company can make. If you invest $1000 in training a sales person, and if your margin is 30%, then the training self-liquidates when that person closes sales equaling $3333. Depending on market size, that amount typically represents just 1-3 average orders! Every additional dollar generated after that is gravy. Gravy is as good on a spreadsheet as it is on homemade biscuits.

As bad as things are right now, radio is uniquely positioned to turn this economic climate into an opportunity. But old habits will not yield new and improved results. An investment in training will provide deserving sales people with skills that will enable them to close more sales right now as well as in the future. Talk about a morale booster! And when they close more sales, your company makes more money.

It doesn't get any more logical than that.

First Blog

2009-06-10T16:58:35Z

My first blog...another step in my quest to be an effective, relevant, and timely resource to the industry that I have loved and worked for over the past 31 years. I know there is little chance of anyone actually reading it at this early stage of development, but a journey of a thousand miles, etc.

To get off to a proper start, I should probably define the mission statement for this blog and for my company, Superior Sales Training. Simply stated, my mission is to provide radio managers and sales people with knowledge, skills, strategies, and tactics that make them more effective at generating revenues for their companies and at generating results for their advertising customers.

Take note of the two primary goals stated above. First, to help sales people become more effective at selling. No matter how committed you might be to helping your customers be more successful, you cannot help at all without first convincing them to say "yes".

Second, to help sales people become better at getting results for their customers. If you are great at selling but unable to generate the results your customers need, your career will consist of taking money under false pretenses until you run out of prospects who you haven't previously disappointed.

That is the unique difficulty faced by radio sales people. You have to be really good at those two things to be successful. So, my posts will primarily deal with selling and with generating consumer responses. I will not be able to resist occasionally addressing other concerns that I have with radio. I may even cross the line into controversy from time to time. But my overall intent is not to provoke, but rather to give aid and hope to the thousands of radio sales people who are struggling right now to succeed in a climate of a bad economy, dubious advertisers, and industry leaders who are trying to understand the role radio will play in the current and future media landscape.

No pressure. Wish me luck.