Radio
stations are a lot like airlines and cruise lines. If
every seat or cabin isn't filled when it's time to
depart on a flight or cruise, then potential revenue has
been lost. The available inventory is 10 units per hour,
but you're not sold out and are running promos or PSA's
to fill avails, then your station is losing potential
revenue. With one station, you might enter into a PI
agreement and hope you can get something out of your
unsold units that way, but in a cluster with seven or
eight stations, that unrealized potential can add up to
a ton of lost money. How do you prevent this? The same
way the airlines and cruise lines do.
Something is
better than nothing
Those great travel deals you sometimes see are
simply a method for pre-selling anticipated unsold
inventory. In other words, space that is likely to
go unsold is instead beign sold at discount rates.
For example, an airline discovers that certain
Cancun flights average 20 unsold seats each time
they leave the ground. Rather than let this
continue, they promote a very attractive rate on
those flights but require advanced booking and
promptly end the offer once 20 specially priced
seats are sold on each trip. They are maximizing use
of their inventory. This same method can work
wonders for a Radio station cluster.
Dig into your traffic system and do
a little research to determine how much of your
commercial inventory goes unsold each month. The
amount will be higher on some stations than others
and will vary from month to month, but you should be
able to come up with the average number of spots
that your staff fails to sell each month. Now
multiply that number by your lowest unit rate.
That's how much potential revenue you are losing
each month. By bundling your unsold spots into a set
of discounted monthly schedules, you can convert
those empty avails into extra money. In fact, if you
do it right, those lost units can become long-term,
incremental contracts.
Strictly
limited offers
Like the travel industry, you will need to be smart
about how you publicize these discount plans. You
will also need certain restrictions to ensure that
the discounted spots don't cost you regular
business. To begin with, they should not be offered
to everyone. Target non-traditional advertisers and
local direct clients who are sporadic spenders. You
can present them with your special offer on a normal
sales call, but greater success has been achieved by
presenting the plan at a series of invitation-only
seminars complete with PowerPoint presentations. The
idea is to demonstrate the extreme value of the spot
schedule and stress the special nature of the offer.
Also, limit the number of discount plans you will
sell and put a deadline on how long they will be
available. Scarcity creates urgency, while
overselling the plan will only create inventory
chaos.
All or part
of cluster?
As with any advertising package, your discount plan
should be designed to fulfill the particular needs
of your cluster while also providing your clients
with an effective and valuable marketing
opportunity. It is best to include all of the
stations in your cluster, but circumstances might
require that you limit the involvement of certain
high-demand stations or not include them at all. It
is also a good idea to include some spots in prime
dayparts, not just those in off-peak periods and
overnights.
Finding new revenue streams doesn't
always mean finding new things to sell, sometimes it
just means making better use of what you already
have. Creating a plan to maximize use of your
cluster's inventory can add several thousand, even a
million, dollars to your revenue totals. With money
like that, you might not have to shop for discount
travel deals for your next vacation. |
