Radio Evangelist

Thoughts of a Evangelist for Radio in all its forms

To commission or not commission – there is no question…

Posted by Steve on July 12, 2008

There’s been a lot of talk recently about whether radio stations should commission their sales people higher on spot sales or on “non-traditional” sales.  Here’s a bit from Tom Taylor’s column:

“Yesterday’s T-R-I story about higher commissions for new media is A) correct or B) not correct. Two emails literally take opposite positions and start with “correct” or “not correct.” They’re in response to the observation by a veteran sales in exec in Tuesday’s Taylor on Radio-Info that stations risk cannibalizing their “regular” advertising revenue by dangling higher incentives in front of sellers for online and new media space. Jay Freedman of Fusion Innovative Marketing says “Your story is not correct. While there are higher commission rates for online and non-spot, that has always been the case, because it’s a harder sell. The reality is that it’s 2008, not 1998. Times are changing and advertisers are looking for more options. The message of your article [which is the anonymous sales exec’s observation, not mine] sends a wrong message. Stations need to find revenue in as many places as they can.” While T-R-I reader Hal Widsten of KWED is 180 degrees away: “Alfred Liggins [the Radio One CEO who suggested the possible cannibalization on a quarterly call] is definitely correct. If large companies have diverted their sales departments’ attention from selling radio to selling the Internet by increasing commissions, that’s bad management. Salespeople should be focused on one goal, and that’s to sell time on the mothership. Extra salespeople should be hired to sell Internet-only related business.” My thanks to both gentlemen for stating each position far more succinctly than I could’ve – and this is a discussion that won’t be ending any time soon.”

This argument is just plain silly.  You should pay the highest commissions on the product that is going to produce the most actual profit for you if the channel is “greased.”  Who cares if the revenue is attributed to over the air spot or interactive?  If the net profit and revenue volume is in line, then pay the commission!

A radio station is a sales machine. It doesn’t matter whether the revenue comes from selling spots or selling hot dogs.

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