In a recent post, we pointed out that a common problem encountered by stations that underperform based on their potential for underwriting revenue was small contract size. This is understandable given that small businesses often consider public radio one go-to place to effectively reach a desirable audience. And we all have those “grandfathered in” businesses that have been loyal supporters who just can’t afford to spend more.
However, there are lots of ways to increase average contract size and some are surprisingly simple.
When I started the underwriting department at KNHC in Seattle I put together two introductory underwriting packages. Both were designed to be easy to say “yes” to. In other words, super affordable. The larger was $895 and the smaller was $430. After six months, guess what my average contract was? $650. The average of the two packages. I realized that I’d have to get larger contracts so all I did was increase the package size. Lesson: People buy what we present to them. So present bigger packages!
Another great way to increase spending is through analysis. When I would analyze the sales data at the end of the year I'd sort the clients by spend and then see where that old 80-20 rule broke on the list. I'd look at average spend per client. I'd look at the details of their packages. I'd often find a gap between largest clients and the medium sized ones. So I'd figure out a package that would increase the medium clients to somewhere in between largest and medium and put together an incentive for them to spend more.
Example: At KNHC, after the first 18 months, I had a few clients spending over $25,000, but most mid-sized annuals were spending $12,000 per year. And it's because they were accepting the options I was presenting to them! A common offer was one week per month at $1,000 per month. So I put together a "Friends of C89.5" package for about $18,000. Clients would get a very strong week on-air plus a bonus of being placed into unsold airtime. And it worked. That following year I had about eight clients spending 50% more than they had the year before.
What are your tricks? How do you get people to increase their spend? Share them with us in the comments!