The long-running conclusion is that the rates increase when the demand heats up on a radio station. But, how about when our cost-of-living increases? Don’t we deserve an earning increase to combat inflation?
Of course we do, but it doesn’t always have to come from higher rates but bigger asks. We find ourselves in just that position right now. Keep this in mind: WE need to make more money too-not just the station owners! I wrote last week that selling radio isn’t just all about making money. But, it’s still essential for most of us to provide for ourselves and our families. So, with inflation running at around 8% for most things we need to buy to live, we have to keep up.
So, I maintain that whether or not your manager is rolling out a price increase, we need to roll out a raise in our asks for our income. Yes, a price increase on inventory for specific clients will help increase your billing. Charging higher prices to new clients, seasonal clients, or those you have the best relationship with shouldn’t be too difficult.
But, the renewing client who spends the same amount of money with us and compares pricing from year to year and station to station will be difficult. There is no way around it. But we must remember that if we spend more each month, we must make more or make changes. The price of ground beef is 16% higher than last year, home and apartment rents have risen approximately 25% or more, and it costs $25 more to fill gas in a fifteen-gallon tank than the previous year.
Let’s just up our asks.
For example, if the average monthly order for a direct local client is $1500 and you get paid a 20% commission, that $300 you earn isn’t going as far anymore. So, to be safe and keep up with inflation, you need to earn at least 10% more on every order. It is time to adjust your $1500 proposals to $1650 and start making $330 per $1650 monthly order. If you have 15 local direct clients monthly billing an average of $1650 per month, not $1500, your commission will go from $4500 to $4950.
The next thing to do is figure out what to add to those orders that excite you and add value to the client. You could add ten-second liners around paycheck times; a few am/pm drive commercials at the end and beginning of the month, and a social media post or website feature.
Radio sales consultant Alec Drake, a yield and revenue management guru amongst other things, advocates that to raise rates, salespeople should not lead with that but instead, put it at the backside of the sales process. I like Drake’s idea of bundling on-air, digital, and event assets to make the proposal comprehensive and minimize the rate details. I believe that when we look at the result of what we offer, it doesn’t matter how we get there rate by rate. Drake also suggests the classic good, better, and best proposal strategy with different investment levels as options tied to varying rates in a schedule.
Please give yourself a raise and keep up with the cost of living you deserve.
Jeff Caves is a sales columnist for BSM working in radio and digital sales for Cumulus Media in Dallas, Texas and Boise, Idaho. He is credited with helping launch, build, and develop Sports Radio The Ticket in Boise, into the market’s top sports radio station. During his 26 year stay at KTIK, Caves hosted drive time, programmed the station, and excelled as a top seller. You can reach him by email at jeffcaves54@gmail.com or find him on LinkedIn.
100%! The best thing about sales is that you control when you get raises. I have found so many sellers afraid to ask for more. Adding more value always works, but don’t forget that prices for everything goes up and so should our rates whether we add more value or not. Sometimes I think we are the only industry that reacts to a tough negotiation by lowering the rate. What you do has value, walk from the deal if it is not fair to you or the station. I know it’s easier said than done but they will respect you in the long run and most likely be back on the air with you.