School of Journalism
UNIVERSITY OF MISSOURI-COLUMBIA
KQRZ/KQRO'S SPLIT SALES STAFF - PART II
The Consultant's Report
To: Ed Jefferson
From: Colin Wakeman
Date: September 30, 2002
Subject: Recommendations from the Sales Audit
As we discussed, Oscar is a real problem. Morale on the KRQO
staff appears to be quite low. There is a perception among both
staffs that he is unfair and shows decided favoritism to one
person--for no apparent reason (there is rampant speculation, of
course, but it is only speculation). Oscar is not an effective
manager; his people skills are poor. He is very competitive with
Olivia and The Z staff, which causes counterproductive attitudes
and feelings among everyone.
The poor morale and apparent poor performance of KRQO is in stark
contrast to the excellent morale and performance at The Z. The Z
salespeople love Tyler, love you and love Olivia--for all the
right reasons. You help them, coach them, encourage them, and make
them feel like winners. I'm afraid that Oscar spends a great deal
of time making his people feel like losers--thus it's little
wonder they are losing. It's sort of a self-fulfilling prophesy.
I feel that you have waited too long to address the Oscar
problem. The fall buying season is coming up and you must get the
KRQO staff organized and cracking immediately in order to
maximize fourth quarter business. Of course, your motives for
waiting to move on Oscar are beneficent, which is typical of your
company's culture; however, I would move immediately on Oscar.
Talk to him right away and tell him it isn't working and it's
time for a change. Give him until the end of the year to find a
job, if you can, but get him out of the station now (perhaps your
rep will give him a desk and a phone to use in New York). When
you terminate him, you and Tyler do it together and do not argue
or give him any specifics--just be general and say it's a style
problem and be as generous as you feel you can. He will try to
argue, want to go over your heads to corporate, will demand exact
reasons, etc. Let him vent his anger, but do not be specific.
Also, tell him he can resign if he wants to (which is a nice
technicality and lets him say that he quit). On the other hand,
if he quits, he can't get unemployment compensation. So give him
a choice. You can fire him so he'll be eligible for unemployment,
but then you and he can tell everyone he quit. In any case, get
him out of the station at once; he can do nothing but harm.
I think your idea of taking over the KRQO sales effort is an
excellent one. Let Olivia handle The Z, she can certainly do it,
and you can organize and evaluate the KRQO staff. I think you
ought to make one or two KRQO changes right away--certainly Mary
Ann (if she doesn't leave when Oscar does, she will be nothing
but trouble if she stays; she has a terrible, negative attitude).
Unfortunately, Harry probably needs to go too, as we all seem to
agree that he isn't going to make it (how about putting him in
production and creative for a while to shore up direct selling--
let him do it 25 hours a week and look for work the rest of the
time. His programming and production experience will be of value,
particularly with your emphasis on new, direct business).
After letting two KRQO salespeople go, raise the KRQO commission
several percentage points (more about this later, but for now the
commission rates are inequitable--the rates on The Z are more
than twice KRQO's but the commission rates are very close).
Divide the lists up realistically and equitably. Make some
interim decisions about account assignments. Do not have two
people go into agencies yet. Tell The Z people to pitch both
stations and give them the higher KRQO commission for KRQO
business. In this manner, everyone will be pumped to get more
KRQO business and it won't cost the station much more money
because you'll be saving the overhead costs on two salespeople.
Next year, split the staffs completely and put two people into
agencies competing for business, but not yet. The Z people will
love this system for the rest of the year and will really hustle
to get business for both KRQO and The Z and to make some more
money this year--they like selling both stations and the
challenge of it.
Here are more recommendations:
1. Because KRQO is behind budget, do not place any emphasis on
the station's revenue budgets to salespeople--stress selling
fundamentals and the billing will come. Read the attached
paper about not talking about budgets with salespeople.
2. Consider conducting a contest. You need something to get
everyone excited about getting back on track for the rest of
the year. Contests must be a positive experience so that
people feel like winners, not losers. Ask the salespeople
what they think about contests and what they'd like to win.
Read the enclosed paper on contests.
3. It is a good idea for sales managers to get feedback from
their sales staffs on a regular basis--about twice a year.
Send the sales staff out to lunch without anyone from
management present and ask them to elect a team captain to
take notes. Ask the salespeople to gripe, to list all of the
problems they are having with their jobs and, most
important, with management. The team captain's responsibility
is to bring back anonymous comments to you.
You will be surprised about how much you will learn from
being evaluated by your sales staff. You might also be
surprised on the positive effect these anonymous evaluations
and opportunities to spout off have on the sales staff (if,
of course, you listen and respond to salespeople's
comments).
The three complaints you will probably hear most often are:
(1) "I want clearer goals" (salespeople know what they are
supposed to do every week, but often don't have clear idea
about what long-term goals you have for them). (2) "When I'm
not doing well, be straight with me" (when sales managers
become dissatisfied, their body language shows it, and both
manager and salesperson avoid each other--there is no
communication. Let salespeople know how you feel about their
performance in a non-confrontational manner). (3) "No one in
this organization appreciates what I'm doing--I feel just
like robot around here" (money is no substitute for a pat on
the back).
Another thing you ought to do is ask everyone in your
department (assistants too) to submit in writing answers to
the question: "If I were sales manager of _____." Offer
rewards for the best answers--dinners for two, etc. You will
be surprised at the detailed answers you will receive, not
only about current operations, but about the station's
future. Do not make any comments about those who do not
reply or give frivolous answers, but see that everyone who
responds gets a serious, grateful, respectful response. You
will learn a great deal from this exercise. Do it now and
then once a year, always with rewards offered for the best
answers.
4. I think you need to work out a new system for claiming and
assigning accounts. You should have an account claim system
that is updated weekly that is easily accessible to the
salespeople--a notebook works well. If there is no activity
on newly claimed accounts after a reasonable period of time,
like three months, the accounts should be reassigned to a
new salesperson.
5. Read the enclosed copy of an article from Fortune magazine
titled "How to Manage Salespeople." Please note the comment
about salespeople loving autonomy and independence and ask
yourself are you treating your staff in such a way that
communicates to them that you value their autonomy and
independence. Also note the emphasis on coaching and on
plotting strategy beforehand. Take to heart the advice to
focus on just one improvement goal, because salespeople
remember little or nothing from a battery of suggestions.
Finally, note the comments about the ineffectiveness of
straight commission systems in achieving management control-
-I didn't say this, Fortune did.
6. Read the enclosed article from the Harvard Business Review
titled "Humanize Your Selling Strategy." Develop your own
checklist of personal information salespeople should know
about every customer. Call it the "$64,000 Questions," and
get the salespeople to help you develop it.
7. You might want to consider giving some type of incentive pay
to your sales support people. The salespeople complained
about the phone system about the attitude of the sales
assistants. Perhaps an incentive plan in conjunction with
some guidelines for improving their work habits and behavior
would be appropriate. Read the enclosed paper on the
subject.
8. You should try to find research and/or co-op interns for
KRQO. You need a better organized direct selling effort--by
category, by area, targeted accounts, spec tape goals, etc.
An intern working on co-op could help a great deal by doing
research and follow through for the salespeople. Research
interns could do ratings breakouts and write category
presentations. Write letters to local colleges and develop
sales and research intern sources.
9. There are two types of meetings, information and training;
do not try to mix the two. It is vitally important that you
and Olivia come to each meeting thoroughly prepared. You
should bring an outline of your agenda with you to the
meetings. Plan your meetings and stay on your plan. If you
don't finish a topic in the allotted time (never more than
an hour), carry it over to the next scheduled meeting. Do
not call unscheduled meetings except in dire emergencies.
Salespeople must be able to plan their days and weeks in
advance and stick to their plans. Therefore, your meetings
should be scheduled at the same times every week. The number
of meetings you have should be based on your salespeople's
training needs. With sales staffs that need a lot of
training on product, client knowledge, research and sales
techniques, you might need a many as two or three brief
(twenty minutes) early morning meetings a week. With an
experienced staff, one information meeting a week and one
training meeting every other week might suffice. I think you
should have the following meetings (The Z salespeople did
not complain about your meetings, but the KRQO people
complained about Oscar's--disorganized):
a. Monday or Tuesday morning sales meeting (Information) -
Have a general sales meeting Monday or Tuesday morning,
as you have now, in which you go over information that
is relevant to everyone: pricing, avails, competitive
activity, kudos and programming and promotion inform-
ation. Keep this meeting brief (half-hour maximum) and
cover only material that is relevant to everyone. Start
the meeting at exactly 8:30 a.m. and lock the door.
Don't wait to start the meeting until everyone arrives,
by doing this, you reward people for being late. You
must always start meetings precisely on time. Sales-
people want to get out on the street by 9:00 a.m. Let
them! Plan the agenda for the meeting in advance and
stick to it. Remember, you are keeping a good sales
staff off the street, so you'd better have something
really important to tell them in every meeting--make
them relevant, short and sweet.
The main rule for a meeting is never to talk about
something unless it has relevance to everyone at the
meeting. Don't ask for individual reports of any kind;
do them separately.
b. Monday individual meetings - You should meet individ-
ually with each salesperson for a few minutes to go
over his or her weekly planner. The planner should
include the calls the salespeople plan to make during
the week and the tactics they are going to use on each
call. You should emphasize tactical discussions with
the salespeople: How they are going to approach a
customer's advertising problem, what they are going to
offer, what their overall target is, what their rates
are, what their presentation and packages are like,
what their closing tactics will be, etc. The emphasis
should be on planning and the future, and on tactics---
rates, production, promotions, ideas, etc.
Some salespeople will require more time, new ones
perhaps as much as half an hour. Others who are well
organized and right on target, will require as little
as five or ten minutes. Have them leave a copy of their
weekly planner with you (don't be too demanding of the
experienced, successful salespeople on this request; if
they are doing well, you want to use this individual
meeting mostly for stroking and encouragement). By
discussing the tactics on each account up front, you
will be able to give your salespeople more autonomy and
freedom to negotiate.
Remember, your goals are: (1) to communicate to sales-
people that you trust them and (2) to keep their tires
on the road. Plan your individual meetings better in
order to keep them short and to the point. Plan account
tactics in advance, so salespeople have more autonomy
and don't have to come and check rates and other
details with you. They are motivated by autonomy.
The next week in the individual meetings, briefly go
over the results of the previous week's calls--orders,
dollar amounts, etc.--then discuss the new week's
planner. In this manner you keep track of what sales-
people are doing. Do not use this system as a policing
technique. Do not make negative comments or assessments
when you first begin using this system, because you
want to train people to use you as a coach and tactical
resource, not to see you as a policeman who doesn't
trust them and is checking up on them. In fact, they
will more than likely enjoy getting feedback from you.
Salespeople want to know how they are performing.
c. Training meetings - Start with positioning. Make sure
the salespeople understand how to position the program-
ming of your stations. Stress retail selling. Emphasize
RAB material. Have each salesperson rotate in present-
ing programming and promotion reports on competitive
stations in training meetings. Don't stress commercial
monitor reports, since often the only way to get busi-
ness that is already on the air somewhere else is to
reduce rates. In fact, every six months have each one
give a presentation on competitive stations (some TV
stations, too) as though they were selling for them.
Become media experts. Also, become client experts. Have
guests come to your sales meetings: Agencies, clients,
programmers, research people, etc.
In these training meetings, do role playing on how to
overcome objections, for example. Use other role-
playing techniques, too. Give salespeople retail sell-
ing problems to solve, rate card and pricing decisions
to make, promotion ideas, list distribution exercises,
sales promotion material evaluation, etc. You have
bright, motivated salespeople, get their input on what
training they need and on what sales promotion material
they need, for example. They are the best judges of
what training and knowledge will help them sell more
effectively. Regularly conduct brainstorming sessions.
Also, brainstorm with clients. An excellent way to
create added value for clients is to have them come to
the station (and bring their agencies if they want to)
and brainstorm with your salespeople about ideas that
will improve their business: copy ideas, promotions,
positioning statements and slogans, for example.
When you cover material in a training meetings, it is
good practice to follow up with quizzes. Salespeople
pay much more attention if they know they will be
quizzed in some way on the material covered. Make the
quizzes fun and give small rewards for high scores.
d. Monthly goal-setting meetings - Meet with salespeople
monthly to help them set their goals for the coming
month. Remember that goals should be activity oriented:
How many calls will they average a day, how many pre-
sentations will they give, what accounts will they call
on, what are their unit rates going to be, what is
their closing ratio going to be? Write down their goals
and keep a copy so that the next month you can go over
with them how they did in accomplishing their goals.
Use these meetings to give praise when it is due and to
give constructive suggestions for improvement when
appropriate. Do not criticize, as criticism merely re-
presses behavior, it doesn't change it. Very simply,
criticism doesn't work.
If a salesperson is not making it, have him or her
develop a specific improvement plan and give it to you
in writing. This technique will make it easier to
terminate those who are not performing adequately.
Along these lines, you must set up a specific develop-
ment program for each salesperson. Discuss each sales-
person's strengths and shortcomings with him or her and
come up with a specific growth, training and develop-
ment plan. Write down the things that you are going to
do to coach, teach and train this person to help him or
her overcome shortcomings. No athlete or salesperson,
no matter how talented, ever became great or lived up
to his or her potential without good coaching. Coaches
make the difference. Great coaches have a development
plan for each person they coach.
e. Quarterly review sessions - Carefully read the enclosed
paper on performance coaching and evaluating sales-
people, and then follow the guidelines. By having these
formal quarterly coaching sessions, you will be able to
give proper recognition to the superstars and help
those who aren't meeting your standards to set appro-
priate improvement goals.
You must have continuous evaluation of sales perform-
ance. Give feedback daily in an encouraging, supportive
way. Never ask, "what did you sell for me today?"
Become a cheerleader for good effort. Every week you
must know the following:
i. Each salesperson's billing.
ii. The amount of business each salesperson wrote.
iii. The amount of new business (more than thirteen
months without being on the station) each sales-
person wrote.
iv. Each salesperson's average unit rates by time
period (an average unit rate across all time peri-
ods doesn't tell you much).
v. An evaluation of the flexibility and inventory
spread of the packages each salesperson sells.
An order for a fixed-position spot in morning
drive would get a zero, but a package that lets
you schedule 120 spots a month in any weeks you
wanted and in almost any time periods you wanted
would get a ten, for example.
Every week publish a list in a highly visible place of
how your top salespeople rank on each of the above five
criteria. Do not attach any figures to the rankings,
just names of the top half of the staff and how they
rank. Do not list the bottom half of the staff, as you
don't want them to feel like losers. Make no negative
comments to anyone and give positive strokes and com-
pliments in front of everyone (not effusive or overly
enthusiastic) to the top half of the list. Use the list
as means of positive reinforcement.
I know a very successful sales manager who posts seven
ranking lists each week similar to the above criteria
(no actual figures, just rank number): (1) New Busi-
ness, (2) Average Rate, (3) Gross Billing, (4) Percent
of Direct Business, (5) Percent of Accounts Past Due
Less Than 60 Days, (6) Percent Billing Growth Over Last
Month and (7) Overall Performance (an average rank of
all of the other six categories). These lists have two
columns, one showing rank and one showing rank changes
(-2, +1, -3 e.g.). One week the sales manager was late
in posting the lists and every one of his ten salespeo-
ple asked, "where are the charts!" They wanted to know
how they were doing.
10. Remember that expectations trigger motivation. Salespeople
are motivated if they expect good performance will bring
desired outcomes. They must think, "If I do better, I'll get
more of what's important to me." (More money, a better list,
a promotion, e.g.). One other expectation also is important:
Salespeople must expect greater effort will result in better
performance. They must think, "I will do better if I try."
Here's how their expectation chain works:
EFFORT --------> PERFORMANCE --------> OUTCOME
There are nine "C" factors that influence whether this chain
reaction will occur: Capability, Confidence, Challenge,
Criteria, Communication, Credibility, Consistency,
Compensation and Cost.
To find out how these nine factors are operating and to see
if your salespeople are motivated, ask yourself the
following questions about each salesperson. If you get a
"no" on any question, you know that element isn't working:
i. Capability: Do they have the ability to perform
the job well?
ii. Confidence: Do they believe they can perform the
job well?
iii. Challenge: Does it take ability and effort to
perform the job well?
iv. Criteria: Do they know the difference between good
and bad performance?
v. Credibility: Do they believe management will
deliver on promises?
vi. Compensation: Is good performance recognized and
rewarded in ways they value?
vii. Consistency: Do they believe everyone's rewards
are similar for equivalent good performance and
proportional for excellent and poor performance?
viii. Cost: What does it cost them--in stress, time and
other things missed--to perform well?
ix. Communication: Are they communicating openly with
management?
In essence, one of a sales manager's most important jobs
consists of diagnosing and then solving problems. Asking the
nine "C" questions can be the start of an intelligent sales
staff motivation analysis and evaluation. You might find
that it is you, the system, your compensation package, your
list distribution practices, your criteria for performance,
your perceived fairness or your communication that are the
problems, not the people themselves.
Remember, virtually all salespeople want to do a good job;
if they aren't, it's usually not their fault but the fault
of management or the system. When billings go down, it's
easy to blame the salespeople, but that's like blaming the
victim when a crime has been committed.
11. Your salespeople complained about the phone courtesy of the
people who answer the phones in the sales department. Read
the enclosed paper on telephone courtesy and pass it on to
everyone at the station to read, then follow up periodically
to see that phone courtesy is being maintained.
12. The KRQO salespeople do not seem to have a clear sense of
how to position the station. They need a lot more coaching
on this from you and the program director (Tyler could
probably help a lot, too).
13. You are doing way too much calculating of projections,
budgets and billings. You should be getting everything you
need from traffic and accounting, and if their computer
doesn't provide it, you don't need it. Remember, emphasize
activity and effort, not budgets or projections.
14. I think you and Tyler should be more involved in planning
promotions. You should be the one who takes the requests to
the promotion director and who does the internal follow up.
In this manner, you keep the salespeople out on the streets
more; you also have more clout and more control over what is
being done and can supervise execution better. Along these
lines, I think you should get with Tyler, the promotion
people and the programming people and plan your promotions
way in advance--have a promotion committee that plans them
six to nine months in advance for both stations; a year is
better. By planning better you can ease the work load and
last-minute crises in the promotion department. Also, and
perhaps more important, by planning promotions way in
advance, the salespeople have more time to sell them.
15. To help organize your communication with Tyler and the
salespeople, you might want to institute a Reader File
system. Have your secretary label a manila folder "Reader
File" and have her put copies of all of your and Olivia's
correspondence and memos into this Reader File. At the end
of each week, have her give the Reader File to Tyler. In
this way, Tyler can keep up on what is going on.
Set up the same system for all of the salespeople. Have the
sales assistants put copies of all correspondence, memos,
presentations, etc. into each salesperson's Reader File and
give the files to you and Olivia at the end of the week.
I think you'll find that this system will help you keep on
top of things and will give you a good idea of how the
salespeople write, follow up and position the stations.
16. Twice each year have recognition parties and give a special
award to the salespeople who have maximized revenue or
developed the most new business, for example. Have the
president of the company give the recognition award. The
superstars want to know that you, management and everyone
else (the world if possible) know who they are. Call the
award a "Maxie" and give little statues of a smiling buddha
with a big belly, a plaque, or any type of award that is
appropriate. I am enclosing a paper about recognition.
17. I think you need to develop a generic retail presentation
similar to the one I am enclosing. Your retail people need
something like this to take out with them as they try to
develop new business.
18. You have some senior salespeople who you might want to
consider making feel a little special. Read the attached
takeout from an article in a recent issue of Sales and
Marketing Management Magazine titled "Giving Status to
Sales." Also, look over the "Sales or Management?" takeout
as a reminder on the importance of coaching and listening.
19. You mentioned that you were considering adding a person to
The Z staff. Having more people doesn't always mean getting
more business, especially more profitable business. If you
have more people on a sales staff than you can profitably
support, it is counterproductive. There are a number of
variables that you must consider when deciding on how many
people you should have in a sales department:
a. Amount of inventory for sale. An all-news station
running eighteen minutes per hour can afford twice as
many salespeople as an easy-listening station running
nine units per hour.
b. Type of agencies. A market that has two or three
agencies that control 30-40% of the local business
requires fewer salespeople than one that has no
dominant agencies or accounts.
c. Buying patterns in a market. If business is twenty-six
or fifty-two weeks, you don't need as many salespeople
as you do with a lot of short-term business.
d. Amount of total local billing a station can realisti-
cally expect, which is, of course dependent on the
market size and station ratings. You can afford to have
more salespeople in New York and Los Angeles than you
can in Little Rock or Peoria, and if you have high
ratings and high rates in your market, you can afford
more salespeople than a lower-rated station. Keep in
mind that realistically there is a limit to the amount
a station can expect to bill. These expectations are
based on the amount of revenue in the market, a
station's ratings and demographics, the market's
broadcast revenue growth, and the number of accounts in
a market that have sufficient sales to support
advertising on your station, among other elements.
e. Your market's pay scale for salespeople. If the average
salesperson in the market makes $25,000 and the top
salesperson in the market makes $50,000, then you can
afford more salespeople on your staff if your billing
allows you to pay an average and a top higher than the
market average. On the other hand, if according to
market pay scales you have to pay $45,000 for an
average salesperson and $90,000 for a superstar, and
you are below that, then don't add salespeople--you'll
just be adding castaways.
f. The additional overhead and support staff needed. Even
if salespeople are on straight commission, there is
additional payroll overhead (usually around 20%)
involved as well as additional office and desk space
plus increased support staff such as secretaries.
g. Management time available and desirable for training.
If you have more salespeople than can support
themselves adequately in your market (ten, for
example), then you are apt to have continual turnover
among the bottom three or four on the staff, which in
turn means that a sales manager is spending an
inordinate amount of time in training new people. This
time spent in basic training is time that cannot be
spent on on-going training and coaching of the regular
sales staff. Often salespeople complain about lack of
access to and coaching from their sales managers, and
having too many people merely acerbates this problem.
Turnover is expensive in more than just management
time, although that is certainly the biggest cost.
h. Having too many salespeople often creates destructive
competition for accounts among the staff. Salespeople
fight for existing big-billing accounts and not on
developing new business--internal politics becomes a
greater priority than selling to prospective new
customers in a competitive atmosphere.
i. The theory of "more salespeople is better" is usually
based on two underlying assumptions: that all
salespeople are of roughly equal ability and that,
since they are on commission, any extra business
doesn't cost anything except the commission.
Of course, no two salespeople are of equal ability. The
real question is can two average $40,000 salespeople
create more business and get higher rates and shares
than one $80,000 superstar. If, for example, at your
current cost-of-sales level you had $240,000 in yearly
local sales compensation to divide up among a staff,
you should ask what is the most effective number of
people: Two at an average of $120,000 (not enough
coverage, too much money per person); three at an
average of $80,000 (not enough coverage, still too much
money); four at an average of $60,000 (depending on
market size and amount of inventory available, this
might be the right number, if you can hire the four
best salespeople in town); six at an average of $40,000
(this might be the right number if the two high ones
are at $70-80,000 and are the best in town); eight at
an average of $30,000 (this might provide sufficient
coverage, but not allow you to hire two or three of the
best salespeople in town); or ten at an average of
$24,000 (this might well mean you will have constant
turnover among the bottom two or three salespeople and
can't pay the top two or three enough to get really
good people).
In other words, it is the incremental dollars that you
must look at. At some point the increase billing curve
levels off so that adding more salespeople doesn't add
enough additional billing to warrant the added expense
and management time spent on training.
I believe that it is better to have one too few salespeople
than one too many. It is better to have fewer salespeople
and be able to hire the best possible sales talent, than to
have more salespeople just for the sake of adding bodies. In
other words, often less is more, especially if you can hire
a few superstars--one Dan Marino or John Elway is worth more
than five fourth-round draft choices.
On the other hand, if the station's management is willing to
risk increasing its total cost of sales, say from 15% to
20%, then adding salespeople might make sense. If you raise
commissions for the whole sales staff and don't reduce their
potential for income, you can add more salespeople.
Or, if you are willing to go to a salary plus commission
system with relatively high salaries for beginning
salespeople and are willing to provide some reasonable
account protection to the existing staff, then you could add
more salespeople. In other words, if you are willing to pay
a higher cost for incremental business (often not a bad
decision), then adding compatible salespeople to an already
successful sales staff is good business.
Another way to add salespeople is to hire them for special
assignments, like selling co-op or overnights or a
specialized category. If your current staff is not doing a
good job developing new business overall or in a category or
in selling a particular time period, then hire a specialist.
The current staff will get the message about your expect-
ations. If you use this method, do not take any accounts
from anyone or reduce their potential substantially.
Adding salespeople to a staff without increasing commission
percentages or adjusting the compensation system in some
other way is virtually guaranteed to demoralize a sales
staff in the short run.
Finally, I think the way the management of a station treats
their salespeople gives signals to all employees about
management's values and beliefs about people. If you make a
conscious decision to add salespeople to your staff
regardless of whether or not they can make an adequate
living, if your attitude about people is "sink or swim" and,
thus, your only concern is about some additional revenue,
not about whether or not your salespeople are happy,
successful and can make a living, then you give the message
to all of your employees that you care more about the
potential for a little extra money than about people's
security or well being. On the other hand, if you let your
salespeople know that you are concerned about them being
successful, making a good living and having security and
that you will make your decision about the size of your
sales staff accordingly, you give all of your employees the
message that you care about people--the right message to
send. Management that cares about its people (and
demonstrating this attitude by actions) will be rewarded
with employees who care about management's goals.
20. You should consider doing stewardship reports to your top
three-to-five accounts every year. Half-way through their
contract year, take the accounts' top executives to
breakfast or lunch and give them a big written presentation
on what a great buy you have been, all the promotions and
extras you have given them, and all the things that you have
done for them to make your station a great buy. Show them
how many impressions they have made, or what their total
reach has been. Make them feel delighted that they made the
decision to give you their business, and that they have
gotten a very good deal for their money.
21. You should consider conducting a yearly survey of your
clients (agency and direct) that indicates how well your
station is servicing your customers. This survey should be
anonymous, completely objective and designed and conducted
by an independent organization (a local college marketing
department might be willing to do it). Every year you need
feedback that tells you what your customers think about your
sales staff: are your people professional, well informed, in
constant touch, using positive selling techniques, etc.?
Your goal should be to rank number one in this survey every
year. You'll also find out who your main competition is.
22. Sell the integrated components of your stations--the whole
system--not just advertising time. Sell the superiority of
your research information (marketing), production (creative
excellence), your promotion department (marketing oppor-
tunities), your traffic department (accurate scheduling),
your accounting department (accurate, fast billing when you
get the straightened out), your engineering department
(quality), your sales service people (fast, responsive
service--especially effective if you have home and car phone
numbers on your calling cards and if you have beepers) and
the deep concern and responsiveness of your management
(sales, programming, news, general and corporate). Create
the added value of selling clients an entire advertising
system that encompasses all of the consultative, marketing,
research, production and creative, programming, promotional,
management and administrative expertise and competitive
superiority that you have at your command.
You have an advantage in your creative and production area-
sell it, promote it. Do a brochure on your production
superiority--show pictures of the people.
Write a presentation that outlines your marketing and
advertising system concept so all of the salespeople
understand it thoroughly. Then distribute the presentation
to everyone at the station.
As part of this tremendously effective systems selling
approach, you must enlist the cooperation of the entire
station. You will need to have meetings with everyone in the
station to develop a Total Customer Responsiveness
philosophy and strategy. Everyone must buy into the notion
of a "nicemanship" and "close to the customer" approach
(terms from In Search of Excellence by Peters and Waterman
and Thriving on Chaos by Peters).
Systems selling will set your salespeople and your station
apart from competitors who are hawking only lower rates.
23. You need laptops for sales presentations, mass
mailings, correspondence, etc. Beg, borrow or steal word
processors for your secretaries and assistants. They need
IBM compatibles. You yourself should become proficient
at using the word processing program so you will understand
how to make it productive for you. If you have any
questions, call us.
24. After the first of the year, consider changing your
commission system. Read my paper on salespeople's
compensation on my Website, www.charleswarner.us.
It's different, but it works. Call me if you
have any questions or want to discuss it.
I think the heart of your current problem began some time
ago when you were charging The Z advertisers only 10% more for a
schedule on KRQO. That might have been advisable when KRQO was
not doing well, but when it started getting good numbers, you
didn't start charging enough soon enough (something you are
certainly aware of--and a call that would have been very tough to
see at the time). As KRQO got stronger, the situation became more
unrealistic, because you could have gotten much more for KRQO.
Then, The Z got a few bad rating books, so the 90% rates for The
Z were too high. The biggest problem the unrealistic budgets you
have set, especially for KRQO, based on the sixty-forty split.
Actually, the problem here is an accounting one, not necessarily
a sales problem. You are ahead of last year on The Z, especially
locally, which is a spectacular performance considering the poor
state of the local economy and the ratings. You are behind on
KRQO because of how you sold it in the past and how you
established budgets for this year. Actually, you are ahead of the
ten percent you assigned the station last year. You don't really
know if the KRQO sales performance is adequate or poor. You
suspect it's not good (and so do I) because Oscar hasn't done a
very good job: he hired the wrong people, failed to motivate his
staff, is overly competitive with Olivia and The Z staff, plays
favorites (which means he's unfair--the worst sin a sales manager
can commit), has a terrible attitude about cooperating and is
disorganized. On the other hand, three of the six salespeople are
actually doing a reasonably good job, considering the
circumstances. Given good help and coaching, their performance
might be excellent.
Also, a word about your call-report system. As you described it
to me, it does not seem onerous or that you are using it for
policing purposes, so if you feel you need it, keep it. The
salespeople are used to it and don't seem to mind it. Perhaps you
can design a new form to use as both a weekly planner and a call
reporting system, as I recommend in 9 b. above.
Finally, I think you ought to keep the staffs structured as they
are now, and then change to totally separate staffs at the first
of the year. You might wind up with six Z salespeople, maybe
seven if your ratings improve, and five on KRQO. You must
structure your staff to meet the demands of selling two stations
with little overlap 25-54 in the most effective manner,
regardless of budgets. Remember that structure follows strategy.
The right strategy is to sell the stations separately. Do this
properly and the budgets will fall into place. Do not try to
base budgets on each station's expected percentage of a total
amount, budget each based on what it can do on its own.
Set your budget for 2003 for The Z at $14 million and challenge
your people to make it. I think they can do it, because I have
confidence that your ratings will increase and that with The Z
staff concentrating one-hundred percent on The Z, that they can
perform even better than they have this year. Also, with
improved ratings, national business will be better. Set the KRQO
budget at $3 million. With good management and no ratings
erosion (which isn't too likely with no format competition), this
number shouldn't be too tough to make. To hit $3 million, you'll
have to pay a substantially higher commission rate on KRQO--in
the neighborhood of ten or twelve-and-a-half percent for regular
business. Of course, I prefer a combination of remuneration
systems, as discussed in the enclosed paper on compensation.
I hope these recommendations are helpful. Thanks again for the
business.
AUTHOR'S NOTE
While the incidents in this case are not factual, they do
represent a composite of real situations and common industry
practices. The consultant's memo is extremely close to an actual
memo. The case was prepared to use as a teaching tool.
ASSIGNMENT
1. After reading Part I. and Part II. of this case, decide
which of the consultant's recommendations you, as Ed
Jefferson, will accept and which ones will you reject. If
you reject any recommendations, explain why.
2. Did the consultant's memo answer Ed Jefferson's questions?
If not, what questions remain unanswered?
3. Did Ed Jefferson ask the right questions? If not, what
other questions should be have asked?
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