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Sales Strategies for a Down Economy Presented by: Jim Taszarek Sessions Will Cover • Environment • How do we respond • Framework for action • Ten ideas – – – – – Activity Packaging Proposals New initiatives Morale boosters Economy May Face Prolonged Pain, History Suggests [ WSJ, May 5, 2008 ] Grows at 1%, Home Sales Increase Economy [ WSJ, June 27, 2008 ] Dow Reaches Bear Territory [ Bloomberg, July 2, 2008 ] U.S. Advertising Spending is Flat in First Quarter 2008 +0.5% [ Nielsen Monitor Plus, June 26, 2008 ] Commercial Radio Revenue • Jan -6% • Feb -2% • Mar -8% • Apr -2% • May -8% [ Source: RAB, Miller, Kaplan, Arase, & Co. ] What are you seeing in your market? insanity insanity: doing the same thing over and over again and expecting different results •Accept •Commit •Plan •Act •Play The Plan – A 60 Day Sprint • One Page • Commitment • Activity • Offer • Proposals • Rewards If we are doing MORE ACTIVITY with a GREAT OFFER, communicating with EFFECTIVE PROPOSALS and HAVING FUN... hard to believe we can’t change the result compared to not doing anything at all #1 ACTIVITY MATH Too much time on small accounts Account Spending # of Accnts % of Total Revenue % of Revenue $20,000 or more 16 5% 519,386 31% $10,000-$19,999 30 10% 405,533 25% $5,000-$9,999 44 14% 316,706 19% $2,000-$4,999 84 27% 284,279 17% less than $2,000 132 43% 123,235 7% Large Accounts Stick Better Account’s Annual Spending Level Attrition Rate $20,000 or more 20% $10,000-$19,999 28% $5,000-$9,999 32% $2,000-$4,999 32% less than $2,000 58% Top Categories • Education • Performing Arts/Museums • Healthcare/Medical Next Four Categories Station 1 Station 2 Station 3 Station 4 1 Tax / Legal Banks / Financial Social Services Law Firm 2 Banks / Financial Home Remodel Govt. Bank / Financial 3 Utilities Restaurant Legal Restaurant 4 Grocery Real Estate Bank / Financial Govt. MOM = Average Monthly Spending # Accounts $ Monthly Billing MOM Tells Us What… • We’re already comfortable with • The market thinks we’re worth • We think we’re worth Weekly Activity • Appointments • Proposals • If the market is down 8% then increase activity by 20% • Set personal goals and mgr. hold to them Activity Math • Reduce time on small accounts • Larger accounts increase retention • Target accounts in top categories • Recommend schedules that increase MOM • Present more proposals every week #2 RECESSION TALK A Must Read Advertising in a Recession by Bernard Ryan Jr. American Association of Advertising Agencies Website: aaaa.org 4 Download PDF, Price $45 American Business Press Study [ Source: Advertising in a Recession, Bernard Ryan Jr., AAAA, 1999 ] American Business Press Study [ Source: Advertising in a Recession, Bernard Ryan Jr., AAAA, 1999 ] McGraw-Hill Study [ Source: Advertising in a Recession, Bernard Ryan Jr., AAAA, 1999 ] Center for Research and Development Study Changes in ROI Related to Changes in Ad Spending During a Recession Spending ROI Change Decreased -1.6% Modest Increase < 20% -1.7% Substantial Increase 20-100% -2.7% Average Change -1.9% [ Source: Advertising in a Recession, Bernard Ryan Jr., AAAA, 1999 ] Procter & Gamble When the president of Procter & Gamble was asked his opinion about the reduced rates for ads for the 2002 Super Bowl, he said the company was taking advantage of the lower prices to do more advertising – with the goal of increasing market share. [ Marketing in Tough Times, John Kypriotakis ] Kmart “There is no doubt we made a mistake by cutting to much advertising too fast. Clearly we’ve learned where the threshold of pain is in advertising.” Chuck Conway, CEO Kmart [ Marketing in Tough Times, John Kypriotakis Business 2.0, February 2002 ] Summary of Studies If continue to spend same level or more: • Sales and net income higher • Higher sales growth • Increase market share • ROI similar to if you had cut expense For Reference Kirk Nelson’s article Sales In A Down Economy • www.deiworksite.org • Click resources for member stations • Click underwriting sales & mngt. • Click articles & reports • Search the word “recession” in this section #3 UNDERWRITING MEMBERSHIP MARKETING PROGRAM Underwriting-Membership Marketing Program Corey Lewis WBUR, Boston #4 PROPOSAL SHARING INITIATIVE Description • Everyone submits one client focused proposal each week • Purpose – Improve proposals – Update database of proposals • Make it fun with incentives – – – – Most clever, best idea Best cut and paste proposal Best renewal proposal Best use of research Examples • Camelback VW Subaru Proposal – Halo effect – Authority – Cut and pasted for over $150,000 • Blue River Interactive Group – Creative – Logical Social Proof Financial advisors using public radio to reach their target audience • • • • • • • • • • • • • • • • • • Fidelity Investments WBUR, Boston UBS WBEZ, Chicago Vanguard WBEZ, Chicago Estate Planning Council of Seattle KUOW, Seattle Compass Bank Private Client Services KUHF, Houston Frost Financial Management KUHF, Houston Johnson Investments WVXU, Cincinnati Meyer Capital Management WVXU, Cincinnati RW Baird (starts August), WVXU, Cincinnati Alpha Investment Management WVXU, Cincinnati Bartlett & Company WVXU, Cincinnati Legacy Capital Management Capital Public Radio, Sacramento Cumberland Consulting Group, WPLN, Nashville Independence Trust Company, WPLN, Nashville Mastrapasqua Asset Management, WPLN, Nashville Robert W. Baird, WPLN, Nashville Wausau Signature Agency, WPLN, Nashville First Tennessee Bank Wealth Management, WPLN, Nashville Authority “We steer professional services and high end retail clients to public radio. We find that we reach business leaders, visionaries, decision makers, people that have a lot on their mind and don’t need radio to be noise. For the investment you get twice the value. You’re getting exposure and you’re endorsing a positive part of our community and you’re giving back to the community.” Evette White CEO, White, Thompson, Cunningham and Regen Authority NPR Halo Effect works for Camelback VW Subaru Presence: Basic linkage with KJZZ / KBAQ through consistent on-air messages, written in the elegant manner listeners expect Affirmation: Emphasizes support for public radio vs. product information, as demonstrated by pledge drives, donor support Integration: Shows in-line support with stations’ core values – some Camelback VW Subaru messages highlight your community activities; you also support special station events. [ Source: Jacobs Media, 2007 ] 7 Questions for Proposals 1. Does your proposal demonstrate that you understand the wants & needs of your prospect? 2. Does your proposal offer a conclusion that will enable the prospect to make a “yes” decision at the end of your presentation? 3. Is the presentation crafted in such a way that it addresses the buyer’s behavioral (DISC) needs? 7 Questions for Proposals 4. Have you incorporated some of the Laws of Influence to enhance buyer motivation? 5. Is there a specific scheduling recommendation based on the prospects wants, needs & budget requirements? 6. Is there a customized sample copy based on the prospects specific business needs that promotes the Halo Effect? 7. If the proposal is passed around, will others understand the presentations relative value without the aid of a presenter? Proposal Sharing Results Totals Average High Revenue $160,301 $243,970 Proposals Submitted 33 38 Proposals Closed 13 17 % Closed 40% 45% Avg. Order Revenue $11,874 $20,331 #5 OUT OF THE OFFICE AND INTO THE SANDBOX Surprise them on a hot day Surprise them on a hot day KUHF Underwriter Luncheon Throw a Party #6 INVENTORY / PACKAGING Supply & Demand The theory of supply and demand describes how prices vary as a result of a balance between product availability at each price (supply) and the desires of those with purchasing power at each price (demand). ---Alfred Marshall Supply & Demand on Radio • Don’t let inventory go unsold – – – – – Watch your price-points Package everything Use inventory drivers effectively Create seasonal packages Know your pacing benchmarks • % sellout next week, next month, two months • Don’t oversell it – If you are sold out you can’t sell New Economy: Two Plans Maximum Audience Plan • Greatest available discount – Easiest to sell and buy • Turnover (50% reach, one + times) – Not too much frequency • Promotes inventory spread – Mon-Sun, 5am-12 midnight • Marketing value – Great starting point Special Offerings Rate Segment Disc Pkg Credits Card 55% Rate Rate Total Mon-Fri, 5a-10a 4 250 138 113 115 460 Mon-Fri, 10a-3p 4 75 41 34 35 140 Mon-Fri, 3p-7p 4 150 83 68 70 280 Mon-Fri, 8p-12mid 4 25 14 11 10 40 Weekends, 6a-7p 3 158 87 71 70 210 Weekends, 7p12Mid 1 25 14 11 10 10 Totals 20 683 310 1,140 Disc -55% Critical Questions • Are you packaging all your inventory? • Are you presenting the best possible schedule for underwriters? • Create a plan to maximize your inventory – If you miss your budget but your total inventory is 98% sellout, good for you! #7 CATEGORY INITIATIVE Maximize • Arts • Education • Medical Develop • Law Firms • Banks • Financial Advisors/Wealth Mgt. • Government/Public Utilities • Community Service Organizations Arts Category Initiative • Meet with them to understand needs • Learn their business • Develop new ideas for them • Communicate our value effectively Learn their business Newsletters & Forums • wolfbrown.com • artsjournal.com Suggested Books • A Whole New Mind by Daniel Pink • Engaging Art: The Next Great Transformation of America’s Cultural Life by Steven Tepper & Bill Ivey • Who’s Your City by Richard Florida • Arts, Inc. by Bill Ivey Core Audience: Share of Wallet • the amount of their customers’ total spending that they are capturing in the categories they offer. • Proposal Examples in the workbook – Nashville Ballet – Phoenix Art Museum New Audience • Phoenix Art Museum’s attendance goal for the Monet exhibit is 70,000 people • KJZZ/KBAQ reach over 250,000 different listeners each week • KJZZ/KBAQ listeners are 298% more likely to visit an art museum than the general population of U.S. Adults. [ Source: Simmons NPR Profile ’98 ] New Audience Make new connections through Nashville Public Radio and reach a new audience by using a varied marketing tactic. • Heavily promote familiar, theatrical operas • Use weekends to maximize reach • Buy specific programs that appeal to a younger demographic (aged 18-34) “Live In Studio C” • Reach a younger audience on WPLN.org Public Radio – Direct Response 75% of NPR listeners have attended a performance or cultural event in direct response to hearing a sponsor's message on public radio. [ Source: NPR & Jacobs Media, 2007; Phone survey conducted by Edison Media Research ] Arts Communication Arts – Solid Solutions • Audience responds • More business from core audience • Grow the size of their audience Banking Category Initiative • Recession talk • Share of voice Share of Voice Share of voice is your percentage of all of the marketing done in your business category within the market or chosen medium. Establishing a dominant share of voice achieves numerous significant marketing goals: • Creates familiarity, understanding and ultimately trust with audience • Establishes top-of-mind status among listeners, consumers • Discourages competitors from entering medium Smith Bank Share of Voice First Bank Bank Bank Leader on both stations – combined 84 percent share of voice Dominant banking underwriter on KJZZ – 72 percent share of voice Only banking underwriter on KBAQ – 100 percent share of voice Financial Advisors/Wealth Mgt. • Recession Talk – Esther proposal • Share of voice – Same as banks • Social proof other markets • Agency quote from Nashville Recession Talk Since 1993 Mastrapasqua has been dedicated to growing long-term capital for clients--building relationships to build wealth. In contrast, the US and world financial markets have negatively affected public perception about the stability of economic growth, leaving investors uncertain. Mastrapasqua’s disciplined and strategy approach to investing shifts public perception and helps investors see beyond the hype. Smith Bank Share of Voice First Bank Bank Bank Leader on both stations – combined 84 percent share of voice Dominant banking underwriter on KJZZ – 72 percent share of voice Only banking underwriter on KBAQ – 100 percent share of voice Social Proof Financial advisors using public radio to reach their target audience • • • • • • • • • • • • • • • • • • Fidelity Investments WBUR, Boston UBS WBEZ, Chicago Vanguard WBEZ, Chicago Estate Planning Council of Seattle KUOW, Seattle Compass Bank Private Client Services KUHF, Houston Frost Financial Management KUHF, Houston Johnson Investments WVXU, Cincinnati Meyer Capital Management WVXU, Cincinnati RW Baird (starts August), WVXU, Cincinnati Alpha Investment Management WVXU, Cincinnati Bartlett & Company WVXU, Cincinnati Legacy Capital Management Capital Public Radio, Sacramento Cumberland Consulting Group, WPLN, Nashville Independence Trust Company, WPLN, Nashville Mastrapasqua Asset Management, WPLN, Nashville Robert W. Baird, WPLN, Nashville Wausau Signature Agency, WPLN, Nashville First Tennessee Bank Wealth Management, WPLN, Nashville Authority “We steer professional services and high end retail clients to public radio. We find that we reach business leaders, visionaries, decision makers, people that have a lot on their mind and don’t need radio to be noise. For the investment you get twice the value. You’re getting exposure and you’re endorsing a positive part of our community and you’re giving back to the community.” Evette White CEO, White, Thompson, Cunningham and Regen Category Initiative • Concentration of force • Maximize best categories • Develop opportunity categories #8 KUHF RATE CARD INCENTIVE TO SPEND MORE KUHF Higher Average Spending • $6,602 • $9,066 • $7,830 • $8,182 • $6,145 #9 SEASONAL PACKAGES Summer Package As summertime temperatures increase in Nashville, demand WPLN decreases as performing arts organizations – our largest category - conclude their seasons. Thus, we offer a hot deal for underwriters who want to beat the heat. Summer Package • Largest category - performing arts goes away so lots of inventory • It allows us to keep pressure on inventory without reducing rates on the rate card • Make deep discount off rate card • Limit the number available per week • Make it fun Holiday Package • Dec. 15 – January 15 inventory open • Offer it to clients as an add-on • Creates momentum going into January • Release it to your staff after Thanksgiving • Offer deep discount • Make it easy to say yes to Independent Retailer Package • Designed for small retailers • Efficient way to sell smaller schedules • They are accustom to buying packages • Easy for them to make quick decision • Not necessary to do long proposal for a small retailer #10 AGENCY INITIATIVE Agency Initiative • Agency lunch at station – PowerPoint – Video – Thank you gift • Then take your presentation on road – Food – PowerPoint – Video – Research ideas from other stations to recommend their clients – Premiums • Follow-up e-mail campaign to stay top of mind #11 HOW RADIO WORKS [ EXTRA CREDIT ] How Radio Works Radio’s Two Dimensions Frequency Distribution 5 Stages of Communication Which is More Important? Reach or Frequency Marketing Factors • Established v.s. New • Brand Dominance • Brand Loyalty • Purchase Cycle • Usage Cycle • Competitive SOV • Target Group Creative Factors • Message Complexity • Message Uniqueness • New v.s. Continued Campaign • Image v.s. Product Sell • Message Variation • Wear-Out Media Factors • Clutter Level • Editorial Environment • Attentiveness • Continuous v.s. Pulsed Marketing • Number of Media Used • Repeat Exposure Media ?? Questions ??