You know that local retail revenues for radio are flat at best. So why do you keep pursuing the same business over and over expecting a different result?
The stations we work with are capturing all of their increases from non-retail accounts, specifically the services and professions sectors.
The reality is, Main Street Retail is shrinking in every market. Markets that had eight or nine local retailers selling home electronics a few years ago, for example, now have two or three and their margins have been squeezed dramatically by the big box stores and online shopping.
Look around your market. The growth is not in local retail establishments. The largest and fastest growing sector of your economy is the service sector; services like law firms, plumbers, financial advisors, electricians, cosmetic surgeons, etc.
Not only is the number of locally-owned and operated retailers in your market shrinking, more importantly, online shopping, smart phones, a global economy and big box stores are dramatically squeezing retail profit margins; which in turn, puts the squeeze on local retail ad budgets.
Why should you be pursuing the service sector?
- Margins are excellent! Once the dentist’s first few patients have covered the dentist’s fixed costs such as rent, equipment and reception, the profit on the additional two patients you attract for them is nearly 100%! Service sector businesses do not have to buy what they sell. In comparison, if a retailer sells 200 units his cost is twice as high as selling 100 units because he has to buy everything he sells.
- Services Don’t Need Volume. One roofing job for a local roofer can pay for a sizable campaign on your station and a cosmetic surgeon doesn’t need to line patients up around the block to make a huge buck.
- No Global Competition. When you have a tooth ache or a leaky faucet you don’t go online to look for service from Hong Kong or Pakistan. The service must be performed locally and the decision-maker lives in your market.
- Less Haggling. Retailers, by definition, buy low and sell high. Most local professionals or service providers have never seen a radio account executive because our industry has been focused on retail in the past. Seldom do these industry professionals know radio rates and they are usually pleasantly surprised by how affordable radio can be.
We don’t have time in your short weekly ENS on Sales to explore all of the reasons the stations we consult are capturing huge increases from service sector clients but I think you get the point; your most lucrative growth opportunities in 2014, and beyond, are in the local services and professions. So as you plan for a “Happy New Year”, think about converting your retail sales people to become a local marketing team.
P.S. You won’t capture the lucrative service and professional sectors if you are speaking retail and using the same strategies and tactics that worked so well for retail in the past.
Click here to discuss how we can help you convert your retail sellers to a full service marketing team to increase your local-direct sales.
Bruce Barton, the founder of Betty Crocker, said, “Sometimes when I consider what tremendous consequences come from little things, I am tempted to think there are no little things.”
And there is no “little thing” with more impact and consequences than praise and recognition.
I happened to be taking a tour through a new client’s radio station last week, when they introduced me to one of their staff. As soon as he saw me, he beamed with approval and said to my client, “I know Wayne!”
He then reached into his desk and pulled out a memo I had sent him when he worked with me 30 years ago. The short note simply thanked him for a job well done, but he had carried that with him for 30 years!
Co-incidentally, I spoke to a regional sales manager that same day who I hadn’t talked to in years. He was quick to tell me that he still has an award I presented to him more than 10 years ago.
A little praise and recognition goes a long way…..and apparently, for a long time.
We know that behaviors which get rewarded, get repeated; yet all too often we focus on trying to change what people do wrong, rather than building upon what they do right.
So here is a challenge for you. Try to catch someone doing something right every day. Simply mark it in your calendar every day to “catch ‘em doing something right.”
Recognizing even the smallest improvement, will in turn, lead to bigger improvements.
With some advertisers shifting their budgets to shiny new media, prospecting for new business is more important than ever. By the way, those who migrate from proven advertising basics to try something new will eventually return to a more intelligent mix of broadcast and online, but in the meantime, you need to make a living.
These 3 steps will set you apart from those salespeople trying to sell technology instead of results:
1.) Prequalify prime targets. Just because you saw a business advertise elsewhere does not prequalify them to advertise with you. Know your audience and what your audience is likely to buy. Then do your homework to become a marketing expert in those categories your audience wants and needs.
2.) Develop customer-focused reasons for prospects to see you. I recently interviewed a group of sales people who said prospects in their market would not make appointments to see them. When I asked them why advertisers should see them, they said things like “you know, the usual stuff…we have a new format, a great station, a growing audience…..” Wrong! Your prospects want to talk about their goals, their problems, and their objectives, and what you can do for them; they don’t want to hear how wonderful your station is until you can persuade them you care about achieving their goals.
3.) Just do it. Once you have become fluent in the language, the marketing and trends of your target categories, set aside a fixed time every day to pick up the phone, send an email or snail mail to demonstrate your expertise, and your intent to serve your prospects’ needs. And don’t give up after a couple of contacts. Go long, often, and deep, with each prequalified vertical you have chosen to serve. As long as every contact you make benefits the prospect and doesn’t degenerate into talking about you or your station, you will eventually get that appointment to begin the selling process.
“Psychological reciprocity” is one of the most powerful sales levers a radio sales professional can develop.
In his book, The Psychology of Persuasion, Dr. Robert Cialdini identifies psychological reciprocity as “the deep rooted subconscious need to return effort to those who put forth effort for us” as one of the six most powerful influences on human buying behaviour.
Even the Hare Krishna, that unusual 1970′s group with shaved heads and ill-fitting robes, knew the power of capturing unsuspecting travellers’ deep rooted subconscious need to return something to those who did something for them.
They discovered that the likelihood of receiving a donation from an unwilling passerby would increase dramatically if they gave their victims a complimentary rose before asking for a donation. They also knew it didn’t matter that the donor didn’t want the rose. In fact, the robed team always had one member scurrying about collecting the roses that donors threw in trash bins, to give to the next prospect.
If you want to stand out in the maze of traditional media and the growing list of new media competition, you must put in the extra effort required to generate the psychological reciprocity that is necessary to give you a competitive edge.
“It’s no secret that radio has reached the Critical Visionary Point in the Business Revenue Lifecycle outlined in this graph.
Of course the enemy of Critical Vision is, “This is the way we’ve always done it.”
As consultants, we introduce new ideas at the Critical Visionary Point. No one hires us to keep doing things the way they’ve always been done.
Admittedly, consultants represent “change” and “extra effort”… two factors that create discomfort for people who are in their comfort zones and content in the Sustaining stage of the Revenue Life Cycle.
But lately, we’ve noticed increased resistance to change and effort at the Critical Visionary Point.
On one hand, we’re hearing that the local-direct radio business is “getting tougher” or is “flat”. Yet on the other hand, when we introduce new visions or proven revenue development systems we’re hearing, “We don’t want to do that much work to increase local sales”. Huh? … Really, I have had people actually say that!
We’re often told, “Reps are too busy” to utilize new revenue-generating strategies and tactics. Too busy doing what?
If sales are flat, and we’re “too busy” to increase them, aren’t we simply replacing “productive” with “busy”?
“Busy” generally means we’re frantically-focused on this month’s budget and this short term thinking is fostered by our measurement and compensation systems.
Ironically, this month’s results are seldom a result of this month’s efforts, but rather the result of the work we did 90 to 120 days ago. Closing seems to be the only task in the revenue development chain that gets recognized and rewarded.
Seldom is there recognition or compensation for completing new tasks which can lead to improved results 90 or 120 days from now.
With all due respect, most radio account executives do appear to be willing to do some “extra work” in addition to closing, like collecting some generic research, facilitating a typical customer needs analysis, writing custom presentations and some even put almost enough valuable insights in their Creative Briefs to produce some reasonably good copy.
But if your competitors are also doing these same basics, where is your competitive advantage?
What are you willing to do for your prospects that your competitors say is, “Too much work”?
When you’re ready to go the extra mile to increase your sales, contact firstname.lastname@example.org to discuss the various proven revenue development processes we have at ENS Media Inc.