Media Sales: Paul Weyland Communication Strategies

The Value of One New Customer

Managing the "Magic Number"
When working with your client to calculate ROI clearly it's in your interest to keep your client's "magic number" (the number of customers your campaign should generate in order for the client to achieve break-even) as low as possible.

Just taking a client through the ROI calculation itself pays off handsomely. You go from the client's random PERCEPTION of how many customers a campaign on your station should generate ... to something much more in step with reality. That is, how many customers your campaign needs to generate based on the client's average sale and gross profit margin, expressed as a percentage of your station's CUME audience.

But you're still not through managing your client's expectations about results. Not until you have explained the value of one new customer to your client.

This strategy works on client with both big and small average sale figures. That is, both coffee houses and automotive dealers. Here's the question you ask the client.

Mr. Client, what is the value of one new customer that our station might bring to your business? How often will you get repeat business from an average customer? And does your average good customer recommend your business to his friends, family and co-workers?

Creatures of Habit
People are creatures of habit. If you get used to going to a particular restaurant, you're liable to visit that restaurant perhaps once a week. At least once a quarter. And if somebody asked you where you wanted to go eat, wouldn't you recommend your favorite place?

If you love the coffee house around the corner from where you work or live, you might visit them every single morning. What's the average sale at a coffee house? At least $5, if you buy something to eat as well as order a cup of coffee. If you visited every working day, the average sale is $25 dollars instead of just $5. What's one new loyal customer worth to the owner of a coffee house over the course of a year? $1,300! And that doesn't include referrals the customer might make to other people.

The Value of One New Customer could be HUGE
Let's say that a dentist for example, operates on a 40-percent gross profit margin. His average sale for just a check-up and teeth cleaning could be more than $100 per visit. Most people go to the dentist at least twice per year. And what happens if you crack a tooth ... or need a filling ... or (God forbid) need a root canal or some other procedure? What happens to the value of one new customer at that point?

How long have you been going to the same dentist? One year? Two years? Longer? How often do you visit your dentist? Twice or three times per year? Do others from your family use the same dentist? If someone moved into town and asked you to recommend a dentist, would you recommend yours? The value of one new customer to your dentist could be thousands of dollars over a few short years. How big is your total weekly audience? Doesn't it seem logical that with a good spot and a logical schedule, that a percentage of your audience might be looking for a new dentist this week?

The value of one new customer to your client could be very significant. Your rate, in comparison, might look very insignificant based on what your station could ultimately do for that client.

Educate EVERY Local Direct Client
An uneducated client probably has no logical basis for the amount of money he is spending. Uneducated broadcast salespeople usually don't have any logical basis for the budget they are asking for. In fact, most broadcast salespeople just pull a number out of thin air!

Always explain Return on Investment (ROI) and impress upon the client the value of ONE NEW CUSTOMER. It's very difficult to argue with this kind of logic AND we're doing several things in the process:

Eliminating rate resistance
Eliminating the need for "Added Value"
Getting the budget whether you're number one or number twenty
Managing the client's expectations about results on your station
Creating the potential for doubling or tripling the amount of money your client is spending with you