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Spot Rates, etc.

T

tk

Alright Folks...here's one for discussion:

Our small town station is at a crossroads regarding spots rates. This is the heritage radio station for the area
so our rates should reflect that, but they extremely low. The sales people are screaming that with the
current economy and competition...that they can't sell the spots at the current rate. Competitors include
two other stations, a newspaper and of course Cable. First and foremost...what is the best way to determine
the rates that the market will bear??? Unfortunately...mom and pop businesses will sometimes shop for the
lowest price regardless of the ratings. What is the best way to address this and come up with a good rate
that won't shoot your current faithful clients out of the water?

Also.....I know in bigger markets....sales are for 60 second units only.
What are the plus and minuses of offering both 60's and 30's in this day and time? Seems like one standard
rate for a 60 would work just fine in a smaller town too....
 
Hello tk, I'll try and really muddle things up for you.

It is never, I mean never cheap enough for the client, ever. It never ever works well enough for the client because they are afraid you'll go up it they do admit it. The current economy and competition are just excuses, who is being sold, the client by your sales people or the sales people by your clients? Small town clients do talk at church, lunch and in the coffee shop, any chance they've decided to try and gang up to force you lower? Don't dislike them or get mad, they are just doing what they think is their job. You can play that game as well, don't ever be afraid to walk on a proposed deal, ever, because if they've decided to play hard ball it'll never end until you end it. Find new clients. Retrain sales people (you might need new blood there as well, don't fire anyone, just bring new ones on board to get the new business).

30's vs. 60's - structure your ads as you'd like but whenever you buy a pair of tickets to a ball game does the second ticket come with a discount? Well then don't discount your 60's because it is the equivalent of two 30's.

You not only must educate sales people but clients also, but since clients don't work for you they will whine a whole lot louder. Get them results and they'll pay what you want, they may not like it but they will pay it if you make them money. If you're truly not getting results then that is a different problem altogether.

Hope this helps.
 
On the sixty second/thirty second rates thing, we've used a unit rate for over a decade,which works for us. Clients need to be steered away from wanting to pay based on length. It gives sales people an excuse to offer a client cheaper rates,IMO. Remember,once you lower rates,more than likely you'll never get them back up. Inventory control software that establishes rates based on station inventory,while pricey, works well for us also.
 
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