RAB

1. Sales Management: Inventory Control, Pricing, and Yield Management • Member Response • member_response@rab.com • 800-232-3131 www.RAB.com

2. Strategic Pricing It starts with math!

3. Pricing Mistakes • Serve least profitable clients • No internal procedures • Insufficient resources • Not forecasting competitor reaction • Incentivize only on revenue • Hold prices too long • No segmentation of clients • Same profit margin • Base on marketplace • Base on costs

4. Rate Cards • Fixed / published • Flexible • Grid card • Spreadsheet • Software Share Builders

5. Rate Classes

6. Rate Classes • Annual • Pre-emptible • Number of commercials • Slow pay • Format targeted • Trade

7. Establish Lowest Rate

8. Pricing Factors Y/N • Ability of sales staff • Economic conditions • Advertiser demand • Ratings, including market rank, station demos, cume, time-spent-listening • Qualitative composition of audience such as above average income, education and occupational status • Rates of radio competitors • Pricing of other media competitors • Daypart, day of the week, week of the month, month of the year • Pricing history at the station • Length of advertiser contract • Length of commercials • Pre-emptible schedules • Advertiser threats • Customer anger • Pressure from a salesperson • Gut feel • Dart board • Ougia board • Price buyers

9. The Question Publish rates?

10. Importance of Pricing 12 x 24 x 7 = 2016 2016 x 52 = 104, 802 + $1 ? + $10?

11. Valuing Commercials • Supply & demand • CPP • CPM • Attitude and belief • Clients • Salespeople

12. What’s Your Average Order? Example: K100 cuts rate by 10% Must find 3 new clients to break even K100 increases rate 10% Can lose 2 clients to break even Do the math for your station!

13. Fear of Rate Increase • Attitude • Belief • Math

14. Reposition Example: “3rd Shift Prime”

15. “Free Spots!” • Free? • No value? • Something of value instead • Here’s the rate

16. Bring In the Math

17. Average Per Advs.Average Unit Rate Bring In the Math 5,000 units Sell 4,000 x $100 = $400,000  Average is $100  $400,000 ÷ 5,000 = $80

18. Station Policies • Handshake • Written pricing policies • Terms and conditions • The following contract represents an opportunity for [Client Name] to purchase [number] commercials on [Station] at uniform rates. In exchange for the deeply discounted rates on these commercials, the advertiser agrees to the following terms and conditions: • Commercial schedules must be placed a minimum of 28 days before flight dates. Schedules placed less than 28 days in advance will be subject to the station’s current pricing at the time the order is placed. • Schedules may be moved once within each quarter with a 21 day notice. After that each commercial moved shall be subject to a 5% surcharge. Schedules may not be moved with less than a 21 day notice. • All contracted commercials must be used within the allotted period. All unused commercials will be billed to the client at the station’s applicable Monday through Sunday, 24 hour rate. • Client agrees to pay all invoices within 30 days. Failure to do so will result in the loss of rate privileges. • This is a confidential rate agreement. Breach of confidentiality will result in the loss of rate privileges.

19. Clearance Priorities • Broad day parts • Prime only

20. Evaluate • RevPad • Sellers’ rates

21. Pricing Meeting Include Traffic and sales managers

22. Sales Management: Inventory Control, Pricing, and Yield Management • Member Response • member_response@rab.com • 800-232-3131 www.RAB.com

23. The Simple Truths of Service

29. Sales Management: Inventory Control, Pricing, and Yield Management • Member Response • member_response@rab.com • 800-232-3131 www.RAB.com