Radio Evangelist

Thoughts of a Evangelist for Radio in all its forms

More on sales commissions…

Posted by Steve on July 14, 2008

Tom Tom Taylor has some great stuff in his newsletter at today from Steve Marx. Here’s the deal:

Cannibals loose in radio’s sales bullpen? In the debate over online sales that was raised by Radio One CEO Alfred Liggins, sales consultant Steve Marx emails T-R-I to say that both sides are right – “at least somewhat.” He says “there are so many cross-currents in today’s choppy media marketplace that any simple explanation is likely to be partially right, and largely wrong.” He says “I’ve been involved in radio sales for 43 years, and I’ve seen it all. Here are some truths you can take to the bank: Jacking up sales commission rates [as some operators are doing for new media sales] sometimes works. What’s remarkable is how often it doesn’t work. One reason is that human beings don’t respond to cash incentives like Pavlov’s dogs to a clanging bell.” Steve’s prescription? “Neither salespeople nor clients should be choosing whether to use a radio schedule or a program on the station’s website. Neither by itself can work even a tenth as well as when you put them together.” He says his CSS (Center for Sales Strategy) works on integrated marketing solutions that “begin with the reach, attention, and spark of radio, and continue with the information, interactivity and functionality that only the web can provide.” But here’s the payoff – “I’ll tell you the #1 reason why radio revenues are down today.” Steve Marx of CSS finishes up his email to T-R-I with a flourish: The sales slump “has nothing to do with the Internet or sales commissions. No one else is talking about it, but maybe we can change that. There are simply not enough radio ‘feet on the street.’ First it was the creation of 4-6-8 station clusters and the combining of sales departments. Then, it was consolidation of ownership and supposed economies of scale. Now, it’s a weak ad market, and downsizing or ‘right-sizing.’ Every one of those cataclysmic events has resulted in reducing radio’s sales force.” Then Steve lays down a challenge for T-R-I readers: “Count noses. Marketwise, how many people are selling radio today, versus five years ago, 10 years ago, 15 years ago? When fewer people knock on fewer doors and ask fewer people to buy, can the outcome be in doubt?” By the way: the Center for Sales Strategy has just posted a White Paper about online advertising – the five “A words” are aggregation, automation, algorithm, auction and accountability. “The end of the old media contract” is a free download here.


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