“Your most unhappy customers are your greatest source of learning” –Bill Gates-

          Your advertisers have never been faced with so much choice……cable, conventional TV, lifestyle magazines, new radio stations, direct mail, mass mail, daily newspaper, community newspaper, billboards, transit, transit shelters, internet, and more.

          Each and every one of your customers can use other media to increase their sales, and can stay in business without you. That is why you must manage customer perceptions and expectations of your stations.

          And you can not manage perceptions and expectations if you are not measuring your clients’ perceptions and expectations.

          Even once-arrogant large auto manufacturers like Ford and GM, now measure and reward dealers for improving customer satisfaction levels. You should too.

          Many stations experience 30% account attrition levels. If those stations could retain half of those accounts through improved customer satisfaction, they would experience a 15% sales increase without any hard-fought new-business.

          Most of us have seen the surveys that conclude it can cost six to twenty times as much to find a new customer as it does to keep an existing customer satisfied.

          Measuring and monitoring what your customers expect from your stations can be the first step in reducing account attrition. Most of us spend a fortune on ratings to measure how audiences feel about us, and yet we ignore our paying customers’ perceptions.

          I recommend that all new accounts receive a Customer Satisfaction survey within 30 days of their first order, and that all regular clients be surveyed at least once per year.

          Sometimes, just asking customer opinions can improve your customers’ impressions of your company.

          Your top fifty accounts, one per week, should be surveyed in person by management. This not only helps to make your key accounts feel important, it keeps management in touch with the market and with customer perceptions.

           I think it was business guru Tom Peters who said, “If it can’t be measured, it can’t be managed”. How are you managing so far?

            This week’s SOUNDManagement is a copy of a response to a question I received via email from a station sales manager recently.   

Question

            “I’ve lost my top billing salesman. I’ve dispersed his accounts among the 3 sales people who remain.  I have not found a replacement yet and need to re-do projections for the 2nd quarter and beyond.  If I do not replace this person, or even if I get a new hire within 4-6 weeks, how much of his projected billing can the sales department expect to reach?  75%?  85%?.”

             “A certain line of thought here is that we ought to be able to recover or reach his goals simply by absorbing his accounts and working them, along with working our own lists.  My feeling is that it’s unwise to expect the original stations’ goals to be reached when we’re dealing with one less person on staff.”

Answer

            I’m afraid you might not like my answer. I’ll answer like a station owner.

Unfortunately, staff turn-over is a fact of life we must always be prepared for. We need to always have a recruit in the wings, or better still a "farm team" or raw recruit in training who can fill unexpected vacancies when we realign our accounts.

            Station owners can not afford to loose the race because we blew a cylinder. It’s management’s job to keep us running on all eight cylinders at all times, or to have spare parts on hand.

            In reality, the potential dollars in your market do not change because your internal circumstances changed.

            Winston Churchill probably said it best when he said "Sometimes it’s not enough to do our best, sometimes we must do what is required."

            Even if the existing staff was able to pick up the slack left by the unexpected departure, what about the new business those people won’t be pursuing while they are cherry-picking your entitlement business?

            Sorry, (name withheld), but your owners have made commitments to their employees, to the bank and other creditors based upon your market potential. They rely upon us sales-types to realize that potential no matter what happens. You must put a plan in place to see that the station captures it’s full potential.

P.S. I can tell you that I have consistently been able to replace a senior with two intermediates or three juniors and DOUBLE the productivity of their lists. That’s not because the seniors were doing a poor job, but rather because more feet on the street always  equals more sales.  

P.P.S. Did you conduct an exit interview to uncover what you might be able to do to prevent future desertions?

          Recently, I was reading a trade article written by a ‘consultant’ who proclaimed, “Your media kit is the first impression you create.”

          Boy, if that’s true, you are doing it all wrong!

          Long before you begin to talk about your unique selling proposition or your station, you need to begin to build your image as a customer-focused advertising professional.

          Perhaps you can send a trade article about the prospect’s business category. Maybe you can reveal some local research about her marketplace. Some media professionals even conduct informal focus groups about the prospect or the prospect’s competitors to give them some insights into their marketing challenges.

          The three fastest ways for a business manager to get rid of a rookie media sales person are;

1.     Tell them you have no budget.

2.     Tell them you couldn’t handle any more business.

3.     Ask them to drop off a media kit!!

          The rookie media rep actually thinks a request for a media kit demonstrates interest, when it really is a way to send a media rep on her merry way without having to outright reject them.

          Having sat on the buyer’s side of the desk, I can tell you a thing or two about media kits. First, without even seeing yours, I can bet you claim to be ‘Number One’ just like everybody else.           Secondly, I honestly can’t remember ever making a media buy based upon someone’s generic media kit.

          Media kits are about YOU…….clients open doors for media reps who want to talk about THEM.

          Generic media kits give the impression that you care about your company, not the client’s. It’s been said, ‘No one cares how much you know, until they know how much you care.’

          When you begin to focus on the customer’s business you will eventually have the opportunity to present a custom customer-focused presentation that will create much more of an “impression” than any slick media kit.

P.S. Your media kit can be a good staff morale builder and sales rep recruiting tool.

          One of the questions I’m asked most often is, “How should we compensate our sales people?”

          Let me begin by suggesting that the great sales people in our industry don’t perform just for the money. They enjoy the challenge of managing their own account lists, the creativity that fosters great campaigns and find personal gratification in the value they are delivering to both your clients and your audiences.

          Having said that, it is increasingly difficult to attract and keep good people in broadcast sales.  We are competing with other sales organizations, from technology companies to insurance companies, and from car sales to real estate sales for the cream of the crop.

          In many markets today, truck drivers and used car sales people earn more than the average broadcast sales executive. Not to speak disparagingly of those professions, the intellect and self-management skills it takes for broadcast account executives to work effectively with top decision makers certainly requires that our compensation levels be at least competitive with those other professions.

          Here are a couple of guidelines I use with my clients when developing sales compensation plans:

1.  The best self-managed sales people perform best when on a      commission system.

2.  The basis on which I develop commission rates revolves around, oddly enough, the average housing prices in your market. Your commission structure should provide the opportunity for an above-average producer to realistically earn 30% of the value of the average home in your market in their second full year of employment with you.

          Until we are prepared to offer competitive compensation structures to our top performers, we will continue to find it difficult to attract and motivate good people.

          We tell our clients that, “advertising does not cost, it pays.” If you do not already, you should apply the same philosophy to your company’s sales commissions. Lucrative sales compensation structures do not cost, they pay.

Very often when I’m speaking to clients about budgeting and planning they instinctively suggest the first step is to look at last year’s figures. Wrong!

          Using previous years as acceptable bench marks in your planning process makes the dangerous assumption that what you did last year was just fine, or that last year you reached your full potential.

          Using what accountants call ‘zero-based budgeting’ allows you to think creatively about what could be, rather than compounding the mistakes or shortcomings caused by focusing on what was.

          Zero-based budgeting and planning involves starting with a clean piece of paper, not encumbering your thoughts with past practices nor entitlement mentalities, and building the perfect company or department from the ground up.

          We often under-estimate the negative compounding effects of using historical figures as our bench marks. One of my clients, for example, suffered from a lack of rate integrity about five years ago. He allowed a rep to sell a client who should have had $100 rate for only $60. My client thought he would dig himself out of the low-rate hole by demanding his sales reps increase each account’s rate by 10% per year.

          Now, five years later, the account that was at $60 is at $96 and the one who was at $100 is now at $161. The discrepancy between those accounts was only $40.five years ago, but by increasing last year’s rate by 10% each year,  the rate differential between the accounts has grown to $65!     Zero-based planning and budgeting opens a whole new world of possibilities, shaking up processes and targets which may have gone stale or become complacent over time. Zero-basing also forces you to develop a strategic plan designed to achieve your zero-based objectives.

          You know your audience, and your market. You also know what a client should invest with you each year and that should be your target, not a meager inflationary increase over what an under-performing account has done historically.

          The same holds true on the expense side of the scale. To remove entitlement mentalities, raises should be based upon merit, performance and productivity. If someone really needs a raise, give them more responsibilities along with it.  

          Budgeting and planning becomes a much more meaningful and thought-provoking process when you replace boring mathematical extrapolations with a zero-based process. Zero-basing opens the door to creativity and innovation as we explore the what-ifs versus believing what-was, is all we can achieve.

          Chicago’s visionary architect, Daniel H. Burnham, said “Make no little plans; they have no magic to stir men’s blood…..make big plans, aim high in hope and work.”

P.S. After completing your zero-based plan you may want to check it against your historicals to ensure you did not under-estimate an account’s potential.