KAHL 1310/103.7 any format changes on the horizon?

[Mediafrog+]

The 55+ crowd has more than 20 years left in them on average. And it's not like people stop spending money when they reach 55.BTW-- When everyone's 401K tanked in the economic crisis my parents were just fine. They had put all of their money into something called "savings" which was unaffected.

And I agree that the 55+ folks who live in my neighborhood haven't stopped spending. They go golfing, take cruises and buy new vehicles every couple of years. My vehicles don't get replaced as often as theirs do and I've never been golfing in Texas or gone on a cruise... I've got kids' college tuition to pay. ;D

However there are huge financial changes happening with the 55+ crowd, none of them positive.

We have a tendency to look at 55+ and retirees as living well. But that was the pre-2008 mentality. The parents of Baby Boomers--what I'll call the "POBBS"--lived in the same house for decades and paid off the mortgage, while seeing home prices soar. The POBBS also worked at the same job for most of their lives and had generous pensions for retirement, often enabling them to leave the workforce in their mid to late 50's. The POBBS were also part of one of the biggest economic run-ups in history.

However, the POBBS "savings" have indeed been affected, as they are currently earning NOTHING with historically low interest rates. Home prices have dropped, resulting in lower equity. And those late-in-life medical bills (which can very quickly wipe out savings) are lurking. Might want to dig deeper and find out if the POBBS are really doing that well, or just piling up debt.

Baby Boomers will see a different reality in their later years: Pensions are disappearing or nonexistent. The cost of putting kids through college is obscene. The 401k's got clobbered. Savings pay nothing. Credit card debt is through the roof. The job market stinks if you are past 50--good luck getting a new job that pays what your last job did, as you are tossed to the curb in favor of younger and cheaper workers--or your job is now in China or India.

Read the financial news these days, and there is one overwhelming theme: Baby Boomers are woefully unprepared for retirement, having saved too little and borrowed too much. Not a formula for big spending that radio advertisers would be after.

 

[davideduardo]

Read the financial news these days, and there is one overwhelming theme: Baby Boomers are woefully unprepared for retirement, having saved too little and borrowed too much. Not a formula for big spending that radio advertisers would be after.

And to add to this... the older a person gets, the more established a person's brand preferences become. So, to change a person's buying patterns takes more ad impressions. Of course, that takes more money, and often the return on that expense is less than the cost... which is why most advertisers don't go after the early boomers.

 

[everydayguy]

Good discussion about radio for the 55+ crowd and Mediafrog is certainly correct about the financial pressures facing the 55+
consumer.

Sure, ad agency buys won't be there, but what about the local advertisers who buy out of appreciation for the format (and who show listeners that they are supporting THEIR favorite station.)

Some formats like Adult Standards draw relatively small audiences but have listeners who are fiercely loyal to that station because it offers something rare on the dial. Classical is another example. Heck, even KOKE-FM in Austin (the new one) may not ever crack the Top Ten given its signal limitations, but the audience LOVES it and the advertisers (local businesses) want to be associated with it and want to support something so cool and unique.

Just look at KAHL's "call1310.com" wesbite and click on "Advertisers" -- lots of mom and pop businesses who likely buy air time on KAHL because they like the unique format and want to support it. And they are the types of businesses that likely get results from KAHL listeners.

I've been told that KAHL operates very inexpensively.

Without knowing anything about KAHL's actual income and expenses, let's say that the expenses are $ 8,000.00 a month and revenue is maybe $ 18,000.00 a month -- small potatoes compared to other big market stations, but I'd love to have a station that cash flows $10,000.00 a month back to me any day, especially if it's just a hobby of mine.

 

[imtomclay]

And the KAHL formula is run it cheap, play something unique, find people that can't afford the big guys, people that love YOUR format and are willing to be a part of it because they can afford it and like it. If you have no real operating expense...ie no jocks, no huge promotional costs, a small commission only sales staff, and you have paid for the station, then how could you not succeed? John Barger got it right.

 

[bturner]

I would never hire commission only sales people. I'd always have a base as a ground floor minimal monthly earning. If you're good at sales and successful, why would you switch to work for no salary? How many of you would quit your well paying job today to go to work for a company that offered no salary, only commission? If you're starting out or don't know sales, you might give commission only a shot, but I bet you won't last two weeks. A revolving door sales department only spells failure. I have never understood the mentality of paying commission only in sales. Naturally you will hire a few duds but those who are good with people will cover your expenses. Remember, it takes 5 to 8 calls (a month or two) to get the client to get to know you and trust you and you need time to learn what is right for their needs. If you wonder how you'll gas up the car tomorrow or if you'll eat tonight, that investment in time is just not possible.

 

[gabigley1]

I would never hire commission only sales people. I'd always have a base as a ground floor minimal monthly earning. If you're good at sales and successful, why would you switch to work for no salary? How many of you would quit your well paying job today to go to work for a company that offered no salary, only commission?

One poster said KAHL pays only a small commission to is sales people. One new station here in
Ohio said they pay the highest sales commission in town on their on air announcements.
Would this be an intensive for good and successful sales people to work for no salary at a new
radio station?
They only pay sales commission in a median sized market in Ohio.
This is a very small one station operation on the AM band and with a very tight budget.

How would you pay sales people at a new very small station with a very tight budget? Just curious
how sales works in the radio industry. Clear Channel said on one of their talk shows here that their
sales staff receive a draw. In this case, one of their sales person actually owed Clear Channel money.
Had to look that up(draw) on the net since I know very little about sales.

 

[bturner]

I worked in several small market, very small budget (if any) stations doing sales. The base salary was always a reflection of local cost of living conditions. In every case I used my own car and paid all expenses.

In 1987 at one station I had a base of $750 a month, then 20% on anything over $3,750 collected in a month. It took about a year to cultivate a salary above the base consistently. When I left, I had been making about $2,000 a month averaged over a year. I left in 1989. At that time, the base had been set at $1,000.

In 1989 I took another position at $1,200 base. In 1993 I took a position at $1,100 base.

The problem with advertising sales is the time factor. I got on the 'buy' sheet with an agency in May but the first buy didn't happen until October and the agency didn't pay until late December. In doing outside sales, I visited about 15 places a day, paid for my gas and all other expenses along the way. It took a year to make a living wage. Granted, we were a respected station considered professional by the advertisers and we were known for having long term sales people.

Sometimes advertisers might want to buy today buy they're locked in to a yearly contract, so you must wait out the renewal. Frequently it's a 'try me next month. I've spent my budget for this month'.

A big part of sales is giving the client the time to know you and earn trust. You need to know them and what they need from their advertising. You need to know what can help them achieve their goals for their business. To do this, you need several visits to create a plan for them. Now, you can get on the phone and sell $1 a holler packages at about $50 all day long but that is the waitress sort of living where you make enough to pay for today but not tomorrow, not to mention these sales are typically paid on collections so you have to wait until the client is billed at the end of the month and hope they pay quickly. Few clients like to pay up front.

Yes, I have been in the scenario where I had an order waiting if I could get to the client buy I didn't have the money for gas to get there. Yes, I've had my car break down and needed to wait until payday to get it fixed, resulting in almost no sales for a week. It is not easy, but in time, you do get there and you have a good stable of buyers who see you as an expert.

Also, commission only stations are almost always 'broke' with poor reputations in town. The revolving door employee parade, lowest rates in town to get an immediate yes and no time to formulate a marketing plan to convince listeners your client is the best choice among their competitors all adds up to a tough mountain to climb. I have not known one person who took a commission only position that didn't quit within a few weeks. Even those where they got an active account list always left for greener pastures, usually broke within a month or two. Plus most of these people had 'personal issues' that kept them from the better stations.

 

[davideduardo]

How would you pay sales people at a new very small station with a very tight budget? Just curious
how sales works in the radio industry. Clear Channel said on one of their talk shows here that their
sales staff receive a draw. In this case, one of their sales person actually owed Clear Channel money.
Had to look that up(draw) on the net since I know very little about sales.

There are an infinite number of ways to pay sellers.

A good seller hired from another station may be offered a "guaranteed draw" which means they get a monthly amount, guaranteed, but don't make any more unless they exceed the base on which the draw is calculated. Usually, after a while, the guarantee goes away and so does the draw, and the seller is on commission or on a small base, mostly to cover expenses, and commission.

Commissions vary with market and station. A station billing $50 million a year in LA might only pay a percent or two commission, while one that bills less than $1 might pay as much as 15% or more on direct and 5% on agency sales. Some stations pay an extra commission on new business, or pay a lower commission if the seller is under their budget quota.

A seller who handles all the station-side work for national sales, coordinated with the station rep firm, will have an even different deal, based on the fact that national sales have both agency and rep commissions taken out of them.

Many of us have seen situations where a station grows in ratings and ups the rates a lot, and then cuts the commission rate. When sales soften, commission rates may go up. Or higher commissions may be paid on certain business in slow months.

 

[fredcantu]

Thanks for the insight.