Everyone wins when you sell the right things
When you’re the publisher of a group of weekly newspapers and shoppers, you get to ask a lot of stupid questions. One of my classics was to an ad rep that had been around for several years and carried a lot of business for us.
“What do you sell your accounts?” I asked the rep.
“Whatever they’ll buy,” was his answer.
It wasn’t the answer I wanted, but the one I heard too frequently.
What I wanted to hear was they were selling the account what was best for them—buys that would produce results. But, the more I asked the question the more disappointed I was in the answer.
I asked that question in 1989, my first year as a publisher, as a recession swept the Northeast (sound familar?). With our revenue slide reaching double-digit percentages, I was likely to be an editor again if I couldn’t reverse our trends. In the months that followed I came to realize that our “sales problem” was really a management and education problem. It was a very expensive lesson.
For the first six months of our slide I beat up the sales managers (What else can a new publisher from the editorial side do?). The sales managers beat up the reps. The reps beat up their clients. The slide continued, actually got worse. We analyzed trends, had focus groups, talked to active and inactive accounts. It became clear to me we were getting everything we deserved. We had produced our own horror show.
I kept hearing three things as I visited with active and inactive accounts. They were:
“Your people are arrogant.”
“The paper doesn’t work for me.”
“You’re too expensive.”
The arrogant comment made me nuts until I listened carefully and heard the reps’ side of things. It wasn’t arrogance; it was part of that management problem. We had put so much pressure on our ad staff to produce, they weren’t “visiting” with accounts, and if someone said “No” two or three weeks in a row, the reps stopped calling on them because they were looking for fresh meat. Bottom-line, though, the customer thought we were arrogant and to them we were. Perception is reality.
The comment about the paper not working for them shattered me. I had been the editor of the company for ten years and I knew it was well read. I had taken too many phone calls about missing cats and dropped punctuation to believe otherwise. But I heard the comment from enough advertisers and couldn't ignore it. So we kept digging for answers.
We looked at ads to determine size and offerings. We ran sales reports to look at account spending and trends. We ran reports comparing prior year spending, the year before that and the year before that. We ran reports about the reports.
The lights came on with the subtlety of a flash fire. The paper wasn’t working for many of these accounts, because we weren’t selling the right things to some of these accounts. Since confession is good for the soul, I’ll say it again. We were selling people things that didn’t work for them.
One nail salon was spending well over $100 per week on average (1989 dollars), so you’d think something would happen for them. However, much of that spending was wasted on a three-paper buy, sometimes with spot color. There was nothing this salon was doing that allowed anyone to think people would drive 30 miles to get their nails done there, passing countless of other similar salons along the way.
As we further dissected our sin, it got uglier. Our sales rep was selling the salon circulation. Not effective circulation, but a number. The daily paper was selling 30,000 copies in that region, so to compete, the rep matched the circulation number. But when our rep added the two new papers to make the 30,000 number, the account dropped in size to a 2 by 2, and that size got lost in the paper. To help pay for the new zones the salon also dropped some frequency. This was clearly a case where you would hope the rep would have believed in the advantages of size and frequency over reach. The salon could have run an ad three times that size in one paper, weekly, and owned the category in terms of presence. Eight thousand circulation in your backyard was clearly a better idea than 30,000 all over creation where it would do you little good.
It was a practice we discovered had epidemic proportions. Many reps had fallen into selling circulation because that was what the daily was selling. Circulation is a numbers game--the more the better, right? Wrong, in this case.
While it is difficult to speculate about how well an ad might have worked in a different scenario, it was certainly clear that we hadn’t given this account our best shot. We had diluted the opportunity by shrinking the size of the ad and cutting frequency. This was clearly an account that should have opted for local dominance. The ad budget would have been much better spent on more size, in one paper, every week. But that would have been harder to sell, because 30,000 sounds better than 8,000. True, but wrong.
Our second biggest sin (it was hard to rate them at first) was what I called taking the money and running. If an account had $500.00 to spend, we let them spend it as soon as possible. Many reps ran one or two large ads rather than a series of smaller ads. We didn’t sell campaigns or programs we just ran ads. The pundits might say you shouldn’t leave anything on the table when money is tight. But, we Boy Scouts should always endeavor to do the right things regardless.
After all this, hearing someone say we were too expensive was nearly music to my ears. Many of them were buying or wanted to buy, we just needed to make it feel better for them. In some cases we were stretching the account with too many zones. But we also needed to get out of our starched rate card and give them a good deal from time to time. Deeper discounts for contracts, stronger efforts on co-op money and occasional specials seem to do the trick in time. I was convinced commitment would bring us equity in the long run.
In the course of our efforts we discovered what we felt was a high churn rate for accounts. About a third of 3,000 accounts on the books had not advertised in a year or more. Now that we were a lot smarter, we had things to talk with them about.
While we couldn’t go back to these accounts and tell them we been selling them the wrong thing for years, the recession did allow us tell the accounts we wanted to change the mix and try new things for them. We recovered with a lot of hard work, training and turnover, and in the end increased our market share well beyond our slide.
John Peterson was a reporter, editor, and publisher before becoming president of the New England Newspaper Group owned by Capital Cities/ABC. The $40 million unit had 75 daily and weekly newspapers and shoppers with 650,000 circulation in Connecticut, Massachusetts and Rhode Island. He has been a consultant since 1995. His website is johncpeterson.com and he can be reached at consultpub@aol.com or by calling 860-447-9198.
When you’re the publisher of a group of weekly newspapers and shoppers, you get to ask a lot of stupid questions. One of my classics was to an ad rep that had been around for several years and carried a lot of business for us.
“What do you sell your accounts?” I asked the rep.
“Whatever they’ll buy,” was his answer.
It wasn’t the answer I wanted, but the one I heard too frequently.
What I wanted to hear was they were selling the account what was best for them—buys that would produce results. But, the more I asked the question the more disappointed I was in the answer.
I asked that question in 1989, my first year as a publisher, as a recession swept the Northeast (sound familar?). With our revenue slide reaching double-digit percentages, I was likely to be an editor again if I couldn’t reverse our trends. In the months that followed I came to realize that our “sales problem” was really a management and education problem. It was a very expensive lesson.
For the first six months of our slide I beat up the sales managers (What else can a new publisher from the editorial side do?). The sales managers beat up the reps. The reps beat up their clients. The slide continued, actually got worse. We analyzed trends, had focus groups, talked to active and inactive accounts. It became clear to me we were getting everything we deserved. We had produced our own horror show.
I kept hearing three things as I visited with active and inactive accounts. They were:
“Your people are arrogant.”
“The paper doesn’t work for me.”
“You’re too expensive.”
The arrogant comment made me nuts until I listened carefully and heard the reps’ side of things. It wasn’t arrogance; it was part of that management problem. We had put so much pressure on our ad staff to produce, they weren’t “visiting” with accounts, and if someone said “No” two or three weeks in a row, the reps stopped calling on them because they were looking for fresh meat. Bottom-line, though, the customer thought we were arrogant and to them we were. Perception is reality.
The comment about the paper not working for them shattered me. I had been the editor of the company for ten years and I knew it was well read. I had taken too many phone calls about missing cats and dropped punctuation to believe otherwise. But I heard the comment from enough advertisers and couldn't ignore it. So we kept digging for answers.
We looked at ads to determine size and offerings. We ran sales reports to look at account spending and trends. We ran reports comparing prior year spending, the year before that and the year before that. We ran reports about the reports.
The lights came on with the subtlety of a flash fire. The paper wasn’t working for many of these accounts, because we weren’t selling the right things to some of these accounts. Since confession is good for the soul, I’ll say it again. We were selling people things that didn’t work for them.
One nail salon was spending well over $100 per week on average (1989 dollars), so you’d think something would happen for them. However, much of that spending was wasted on a three-paper buy, sometimes with spot color. There was nothing this salon was doing that allowed anyone to think people would drive 30 miles to get their nails done there, passing countless of other similar salons along the way.
As we further dissected our sin, it got uglier. Our sales rep was selling the salon circulation. Not effective circulation, but a number. The daily paper was selling 30,000 copies in that region, so to compete, the rep matched the circulation number. But when our rep added the two new papers to make the 30,000 number, the account dropped in size to a 2 by 2, and that size got lost in the paper. To help pay for the new zones the salon also dropped some frequency. This was clearly a case where you would hope the rep would have believed in the advantages of size and frequency over reach. The salon could have run an ad three times that size in one paper, weekly, and owned the category in terms of presence. Eight thousand circulation in your backyard was clearly a better idea than 30,000 all over creation where it would do you little good.
It was a practice we discovered had epidemic proportions. Many reps had fallen into selling circulation because that was what the daily was selling. Circulation is a numbers game--the more the better, right? Wrong, in this case.
While it is difficult to speculate about how well an ad might have worked in a different scenario, it was certainly clear that we hadn’t given this account our best shot. We had diluted the opportunity by shrinking the size of the ad and cutting frequency. This was clearly an account that should have opted for local dominance. The ad budget would have been much better spent on more size, in one paper, every week. But that would have been harder to sell, because 30,000 sounds better than 8,000. True, but wrong.
Our second biggest sin (it was hard to rate them at first) was what I called taking the money and running. If an account had $500.00 to spend, we let them spend it as soon as possible. Many reps ran one or two large ads rather than a series of smaller ads. We didn’t sell campaigns or programs we just ran ads. The pundits might say you shouldn’t leave anything on the table when money is tight. But, we Boy Scouts should always endeavor to do the right things regardless.
After all this, hearing someone say we were too expensive was nearly music to my ears. Many of them were buying or wanted to buy, we just needed to make it feel better for them. In some cases we were stretching the account with too many zones. But we also needed to get out of our starched rate card and give them a good deal from time to time. Deeper discounts for contracts, stronger efforts on co-op money and occasional specials seem to do the trick in time. I was convinced commitment would bring us equity in the long run.
In the course of our efforts we discovered what we felt was a high churn rate for accounts. About a third of 3,000 accounts on the books had not advertised in a year or more. Now that we were a lot smarter, we had things to talk with them about.
While we couldn’t go back to these accounts and tell them we been selling them the wrong thing for years, the recession did allow us tell the accounts we wanted to change the mix and try new things for them. We recovered with a lot of hard work, training and turnover, and in the end increased our market share well beyond our slide.
John Peterson was a reporter, editor, and publisher before becoming president of the New England Newspaper Group owned by Capital Cities/ABC. The $40 million unit had 75 daily and weekly newspapers and shoppers with 650,000 circulation in Connecticut, Massachusetts and Rhode Island. He has been a consultant since 1995. His website is johncpeterson.com and he can be reached at consultpub@aol.com or by calling 860-447-9198.
posted by John at
10:33 AM
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