Attain True Rate Integrity
Greg Murray for Radio Ink Magazine 

Attaining the dreamy state that is Rate Integrity can appear as allusive as a fulfilled New Years resolution.  However, creating a rate system designed for client equality is not difficult to establish.  Shifting rates, which change at the whim of each rep, client, and situation is Radio’s unkept dirty secret.  If our pricing practice can become a source of credibility, we will all profit immensely.  This year we can begin to achieve Rate Integrity for our industry…one manager, one cluster, one company at a time.

Throw Out The Rate Card

The rate card has been given the dubious reputation equivalent to the sticker on a used car.  Rate cards have become nothing more than an opening number to begin negotiations.  To establish rates that are fair and make sense to advertisers, develop a “Rate System.”  A Rate System displays prices that accommodate a variety of client needs, while maximizing inventory and profit. 

A Rate System is based on volume and flexibility.  The more you buy, the more you save.  And the less stress on inventory, the cheaper the commercial.  Built as an Excel document, your grid of rates will create impartiality for all clients and prospects. 

Volume savings encourage long-term commitments.  Selling commercials in “bulk” increase your number of clients who get better results while adding stability to your bottom line.  Not everyone is comfortable with commitment so rates should be available for the weekly/occasional/seasonal advertiser.  Charging a premium for those who are here today and gone tomorrow while giving back to those who commit becomes inherently fair when working through a Rate System. 

Flexible clients should also be rewarded.  If an advertiser is willing to buy thirties instead of sixties, early week instead of late week, or 5:30am-Midnight instead of 6am-7pm, they earn rate discounts.  With an impartial Rate System you can demand top-dollar from an inflexible prospect, while creating remarkable value for the savvy advertiser.  Your benefit is a just plan that squeezes maximum profit out of every week’s inventory. 

Once your Rate System becomes a living one-page document, head to Kinko’s!  There is nothing like handing out those laminated color copies to announce new standards are in place. 

Prospects & Clients

Introducing a new Rate System to prospects is simple.  You find out what is important to them and provide the appropriate rate options.  No problem…and no exceptions!  Remember, the rate is the rate, and if you allow one new advertiser on the air with a “cut deal,” then all credibility is lost.

Introducing current advertisers to your new Rate System does not have to be difficult.  You may get clients with an initial resistance to change, but once they recognize the system is fair, everyone wins in the end!  More than a low rate, businesses want to know they are working with a reputable organization.  A Rate System provides that credibility.  You will create more long-term clients through trust-worthiness than you will from whispered rate deals.

A gradual adjustment into your Rate System for active advertisers is fair to both parties.  For the client who is on the air occasionally, this is a wonderful opportunity to get a commitment.  For your big dogs, make your necessary concessions.  Long time clients deserve to be grandfathered.  Meet in between current rates and that which the system indicates.  Showing consideration for your best advertisers will result in mutually acceptable terms.

Preparing The Troops

Nothing is more painful to an AE than change, especially when it involves their client’s rates.  Approach your staff with honesty.  Enlighten them that the quickest way for everyone to make more money is to maximize revenue, and that begins with balancing inventory and creating long-term advertisers.  Sway them to view your plan as if they were managers.  Not all may agree on day one, but results create quick believers.

Rate Integrity will not be achieved without a few growing pains.  You will inevitably have to turn down a piece of business.  You will inevitably tick-off your superstar rep by saying no to a cut rate.  However, by sticking to a Rate System you will quickly gain credibility with your clients, as well as your staff.  Creating an environment of respect and integrity begins with openness about the price of your product.  Make this the year you develop a system that supports Rate Integrity.  It can be the most profitable and fulfilling change you make in the coming year. 

Sales Imaging's, Greg Murray is a Radio Ink Columnist, RAB Speaker, CRMC Diamond, and Microsoft Certified Specialist.