Wednesday, November 07, 2007

Promoting With Sales - Good? or Bad?

We all know the scenario here. Programming doesn't have any big money for a book promotion and puts together an idea to give away a big prize. For this example let's say it's a motorcycle. So the sales team goes out and tries to cut a deal for a bike. Often we see the dealer, who was going to spend 15K over the Spring months on the station, decides 'let's just give them a bike and I've got tons of exposure' (probably more than 15K) and since the dealer only paid 10K for the bike he's got a real deal. So he cancels the 15K order and shines up the bike for the promotion.

Meanwhile the station loses the 15K he would have spent in spots and probably the sales team loses a pile of the commission on the deal. From the sales and revenue picture this doesn't look like a good deal at all and the Sales Manager, who wants to help the station, has to draw the line when he misses the budget and watches his sales people working on this deal instead of spending time on 'real revenue' potentials.

There is a way to make this a deal for the motorcycle shop, the sales team, the revenue line and the programming side, but you have to look at all sides and build a promotion that has bigger potential and can involve more than just the motorcycle shop. Every market and sales scenario will be different here, but look at this example of a promotion outline and the revenue potential:

1. Motorcycle - Walk in 4K from the promotion budget and INVEST it in the prize. Put together a package for 12K with the bike dealer and you will pay him 4K for the bike as well as do the promotion with at least 10K of advertising exposure for him from sweepers, remotes, liners etc. Now sales gets 12K in revenue, still 3K less than they hoped for but at least they get 80% of the deal and there's commission for the team.

2. Remote Package - Put together a remote package with a big send off for the bike at a big bar and then sell packages with lots of promos, a schedule and a remote. You can price it over the usual remote since you have lots of extra excitement in the promotion. If you have a launch promotion for 2K and 8 smaller remotes at bars, retail stores, etc priced at 1.5K now you have 14K in revenue over the month.

Sales gains by having extra value added incentives to pass on without giving away inventory from the spot logs. Sales also gains by having a potential of 14K more in revenue for the month. The Sales manager is now looking at the potential of taking that 15K order from the bike shop and turning it into 24K of revenue even after we pay 4k for the bike in cash. Programming can have an exciting promotion that's all over the community and still have that book promotion.

It takes more planning and advance thought and it's not as simple as filling out the order, but both sides (sales and programming) end up with revenue potential and on-air excitement that hopefully will drive some ratings boost.

I know that every deal may not work like the example in your market, but I think you see the concept. Also many of you already do this, but you've learned that advance planning, organization, and being careful with the details. I've also seen examples that reflect more of the beginning of this story - where everyone has just tossed in the towel.

It works best when the programming team and the sales team commit to working together and laying out a solid plan WELL IN ADVANCE. Now is the time to start thinking for Spring 08. You probably know the budgets at the station level and if you lay the foundation before the holidays you have just enough time to pull it off by April.

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