Value is the New Green is a superb article in the Friday, March 13th issue of the WSJ. (A link to it is provided below). Mark Penn contends that yes, Cheap is working (Wal-Mart) but a tad higher price combined with additional value is also working (Target, hybrid cars).

We've been discussing a re-examination of  how we price ourselves and offer ourselves to advertisers. The premise is that continuing to insist on "the Rate" or "Getting our Rates" while the station is 60% sold out - ignores economic logic. It allows 40% of the inventory to go out the door at Zero - when you could be getting something for it. Is there a crowd with battering rams at the front door - demanding spots?

We're in Denial. It's like not noticing the 800lb. rhino in the middle of the family room. "What rhino? I didn't see any rhino. Why do you always think there's a rhino there? Oops, watch out for  that poop over there."

So we really aren't getting Our Rate - it's a myth. Want to know your real Rate? Total up your billing  for last month. Then count up your total (sold and unsold) avails. Divide the total number of avails into revenue - and THAT'S Your Rate; the real one. That's what the market considers your VALUE.

We've also been saying that clients aren't looking for Cheap Spots only; it's more than that. They're looking for HOPE. Therefore, they don't perceive us delivering their required amount of hope. Instead  they perceive us as just selling (a) Spots (b) at Our Rate.

In spite of getting our butts handed to us, we arrogantly vow "We'll never throw in Value-Added for free."  With unsold spot inventory, unsold web inventory, promotions selling sluggishly - we stand on some imaginary moral high ground and say, "Not us! We're sticking to it."

("I'm not going to waste a perfectly good machine gun."  - General George Custer. June 26, 1876.) 

This in the midst of seeing and hearing most of our clients doing exactly that. (Listen to your next stopset. You'll see.) 

So how can we make ourselves more attractive to advertisers and do so profitably. In the next issue, we'll take a new look at Value Added. But for the moment . . .

If you decide to lower rates, don't treat it as a defeat - DO IT WITH A BRASS BAND - seize it as an opportunity for a big Business-to-Business Promotional Event.

• Send a letter to every current advertiser that starting Monday April 6th . . .
• You're adding 15% more spots to every schedule - as long as they stay on - at the same budget. (I'm using 15% as an example. You're looking for perception here - so make an offer that will make everyone run to the gold rush.)
• Then cook up ATTRACTIVE incentives for staying on longer, wider dayparts, additional stations and/or web activity.
• Extend the offer to clients who've gone off the air.
• Do it with class.  Make it big and bold. Get headlines. Get talk. Good talk. I'd consider a newspaper ad. "Why We're Doing This? Of course, we're doing it for The USA or to Help the Minnesota Economy or We're the Business Friendly Radio Stations."  Do you have a Business Journal. This would be big stuff here.
• Your competitors might call you chicken, but they're the least of your worries right now. Your customers will think it's a great idea.
• Condition; We can do this as long as we have the avails and will need to discontinue it when we're sold out (85%). 
• SELLOUT IS THE MARKET'S WAY OF SAYING - RAISE RATES. That's a good problem.

Read the entire article here.
Value is the New Green - Mark Penn - WSJ March 13, 2009

PS. Don't do this on April 1 for obvious reasons. Do it on the 6th or May 1. Not April 1.

CBS Outdoor has announced the launch of www.wannabillboard.com, a new web-based service that lets local advertisers choose their own outdoor ad creative from a catalog of customizable, ad-agency quality designs. The web-based program offers clients more than 50 local categories to start from, letting advertisers choose industry-tested templates to start the design process. Clients can then add in their business name, address and contact information, as well as a text code to action.

Is there an idea here for us?

Workshop for Managers

By Request, announcing a brand new online workshop starting

April 6 . . .

Managing Sales in a Tough Economy - for Managers Only.

Look for all the details in our next issue.