[cma-l] Community Radio Spot Rate

Tue Feb 3 09:39:16 GMT 2015

This is from my own experience:

- If you tell a company that your adverts are worth £300 a year, they'll
believe you.
- If you tell a company that your adverts are worth £3,000 a year, they'll
believe you. They might not be willing to pay for it, but they'll believe
it's worth it.

Although we all know that the lower the price, the higher the demand, it's
definitely NOT 10 times easier to sell for £300 than £3,000.  I can name
two former local community stations - TGR and Link FM - who got their
pricing wrong.  One advertised packages from £100 a year on their website.
Re the other, we were approached by a local company who were offended when
I asked them for £2,000 a year to sponsor a show as they were sponsoring
the equivalent show on the other station for £4 a week!

I rarely do deals for less than £1,000 unless it's for a short term
advertiser who can give me both the finished advert and the payment up
front.  It's just too much hassle.  Ignoring these occasional ones, my
average sale is now £4,000.  Other radio and newspapers locally have been
putting prices up too so we're lucky not to suffer from cut-throat
competition.  Oh, and get a salesman who DOESN'T want to be a superstar DJ
and does his job, it WILL pay for itself and more!

I've also found that the people who are likely to cause problems with
payments in the middle or end of a campaign are the ones who pay hundreds,
not thousands.  I don't know why - maybe if you pay a higher level you've
made a business decision and it's easier to justify sticking to it, whereas
if you pay a small figure you're expecting a much quicker return.
Definitely something to do with small businessman psychology.

A lot of local businesses believe that if you charge low prices, you're
telling them that even YOU don't think it's worth much, and whether that's
fair or not I tend to agree with them.

Apologies to those stations who do charge low prices because I know there's
a variety of other reasons why you could do that and that it would work for
you - it wouldn't work for us though.

Cheers
Paul
www.phoenixfm.com

On 3 February 2015 at 00:21, Eddie Stuart <eddie at kcr.fm> wrote:

>  David,
>
> Interesting to read "the 6 pricing strategies".
>
> We've had 17yrs as a Community weekday evenings only opt-out from the
> local ILR station and the agreement with them only allowed limited
> sponsorship, no advertising.
>
> Once we were running on our own licence (& transmitter etc) in 2014 the
> situation changed. Several people in the industry advised us to take
> advantage of all the "go-live" publicity and for a while to charge "Rate
> card + a premium" - exactly the opposite of the "Penetration Pricing"
> strategy!
>
> As regards some people saying that "that's too much" - you will always get
> that. One that we had - I bought all the various local papers in our
> broadcast area one week.
>
> I phoned several firms that week where I knew people well enough for off
> the record enquiries to see if it had been a busy or quiet week for the
> papers - ie had adverts been booked a long time ahead or were they last
> minute ones, were people paying full rate to the papers or was there much
> discounting to sell white space (appeared not so that week - not 100%
> accurate, I know, but.......)
>
> I know that white space affects papers rather than radio but we wanted to
> guesstimate how much the firm was spending a week.
>
> We were then able to decide that if the firm were paying that much, even a
> half-decent campaign with us would still cost far less than they were
> paying the papers, & that we shouldn't/wouldn't devalue our product. They
> had admitted that being on KCR had increased their footfall and were,
> frankly, having a laugh......
>
> There are times to turn down business!
>
> In contrast, we have had several non-commercial organisations happy to
> take a block of adverts at what they felt was a very reasonable rate
> compared to the ILR / newspaper charges - "No-brainer" was one comment.....
> (That's not charities etc BTW - we have free Community Corner / Community
> Announcements slots for them)
>
> Regards,
>
> Eddie
>
>
> On 02/02/15 18:14, David Duffy wrote:
>
>
> I've done a lot of work on product and service pricing over the years and
> it often bears no relationship either to worth or value. We have this
> simple table <http://www.theradiopeople.co.uk/pricing> which you might
> find useful.  It shows the 6 pricing strategies
> <http://www.theradiopeople.co.uk/pricing> that are most commonly used in
> radio.  Enjoy!
>
>  All the best
>
>  David
> Senior Partner - The Radio People
>
>
>
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