Several years ago, while working with another software vendor, I became the staff expert on Revenue and Rate Management. Now being the staff expert just meant I knew more about it (our software) than anyone else on the team and as I look back maybe I didn’t know enough.
There are several products designed to get you the maximum rates based on inventory demands. And maybe that sentence is part of the problem. You don’t need maximum rates everywhere; you need a rate to get you to budget.
At the Texas Association of Broadcasting convention this past week, Mike Mahone of Revenue Development Resources conducted a session called “Pricing to Win: Strategic Plan for Rate Management” Before anyone buys software to work the rates, they really need to buy in on and understand the concept of pricing and be able to have your advertisers understand it as well.
In Australia, where our program was originally developed, all of radio understands the concept and the majority of stations sell that way. Today I can name a handful of stations in the US that use one of the many products out there and get it, consistently “Nailing” their Budgets month after month.
Now much to the dismay of software vendors with extra priced rate management tools, Mike and his team have developed an Excel Spreadsheet that works all the magic formulas to get your rates right, to meet budgets. He offered it free to those of us in the meeting. You do need specific information from Traffic on inventory, but then the sheet does the heavy work. From my point of view, I’d rather just give him a solid easy export from Traffic, after all the data is in there, right?
Mike points out that the biggest objection to this type of rate management is from within your own staff. Understanding the math is just one step in getting the team on board to new ideas. I liked the fact that even the lower priced ROS spots would get even distribution throughout the day parts and not all shoved to after 7PM for example. Now Mike has been in the business long enough to know what he’s talking about, as a
Former Executive Vice President of the RAB. And he is practicing what he preaches, as he’s also the Market Manager for a three station cluster in Corpus Cristi with some pretty big name competition. You can find more about him and the company at http://RDRToday.com.
