Radio Ink's Bizarre Blog on Radio's Future

[rickradio]

If you object so much to the concept that capital creates jobs that you have to equate management to reptiles, there are places where this formula is not employed. Cuba has pretty much eliminated capitalists, as has Guayana. Venezuela is well on the road to eliminating "the boss man" except at the top, and quite a few sub-Saharan African nations such as Zimbabwe offer the absence of profit driven mangement you seek. Some of these do not even require the learning of a new language.

David,

SFStatic was just reiterating what M. Dung said at the top of page 2.

 

[DavidKaye]

Unless you have a large number of small clients, and don't get 80 percent of your business from 20 percent of them, when they say jump, you will ask "how high?" as well. I am sure you are aware that the great percent of businesses are created by individuals with precious little capital.

I have owned various businesses over the years from a telephone call center to a moving company, a small ad agency, a restaurant and club, to my current venture, freelance tech support. One thing I learned early in the game is that it's easier to get good customers than good employees. It's also better for the health of a company to offer a particular product or service and try not to be everyone to everybody. In business I set my rates and my policies based on what I feel I need to make the business work.

For instance, in my call center business I turned down doctors because I'd had bad experiences with them as clients and they drove my phone operators crazy. Now what call center would turn down doctors? They're the bread and butter of the business. Well, I did, and it didn't hurt me. In fact without the doctors and the disproportionate number of demands they put on me, we were free to give better service to the rest of our clients. And we also made money referring doctors to our competitors.

Likewise this is what we did with our rates. Other phone answering services tried to low-ball each other. I held our rates firm, and they were the highest in SF. When potential clients called about our service and balked at our high rates, I referred them to our low-ball competitors and pocketed the commissions they paid me. In a few months I knew I'd get some of them anyway, after they experienced the poor quality of service that low-balling gets.

I don't jump or ask how high when an unreasonable customer makes demands on me. It's not worth it. Today in my tech support business I turn down about 10-20% of my business because I won't low-ball on my rates. I offer a quality service and if they don't want it they can go elsewhere. I'll bend over backwards to give good service to my customers, no doubt about it. And I also offer a 60-guarantee which nobody else does. But I don't compromise my principles for a quick buck.

In radio there used to be stations that had principles. In the Gabbert days, KIOI at one point didn't run singing commercials, which were all the rage. He just thought they sounded cheap. I'm told that KGO turns down all kinds of flaky ads, such as quack cures and get rich quick schemes. These kinds of policies serve stations well in the long run, though it may mean they lose 10% of their business. Business is built on long-term results, not short-term. The smart managers know this.

 

[weav]

n my call center business I turned down doctors because I'd had bad experiences with them as clients and they drove my phone operators crazy. Now what call center would turn down doctors? They're the bread and butter of the business. Well, I did, and it didn't hurt me. In fact without the doctors and the disproportionate number of demands they put on me, we were free to give better service to the rest of our clients. And we also made money referring doctors to our competitors.

I guess that's the other side of Pareto's 80/20 rule... when 20% of your customers create 80% of the headaches.

To drag it back into radio... our new Production Director tears his hair when a salescritter drags in a client who hasn't signed yet, wants to hear a commercial produced on-spec, and he insists on directing the people doing reads and editing but doesn't know what he's doing. And usually it's someone who only wants a small buy anyway...

 

[DavidKaye]

I guess that's the other side of Pareto's 80/20 rule... when 20% of your customers create 80% of the headaches.

This is always the case, in every business I've been in, and it takes sometimes lots of fine-tuning to get rid of that bottom 20%.

To drag it back into radio... our new Production Director tears his hair when a salescritter drags in a client who hasn't signed yet, wants to hear a commercial produced on-spec, and he insists on directing the people doing reads and editing but doesn't know what he's doing. And usually it's someone who only wants a small buy anyway...

When I did agency work I noticed this. It was as predictable as the summer fog. The unfortunate thing in the radio biz is that the production person and the sales person are usually at odds over this kind of thing. Better they should huddle together beforehand and establish what is a worthwhile client, and focus on them.

For instance, in my tech support thingy, I specialize in age 50+ clients who are not very computer literate and also secondarily on small and micro businesses. Thus I'm able to focus my advertising budget more cleanly with little waste.

I'd suggest radiowise that it might be good to specialize in X client, whatever X is. Maybe they might be clients who already buy X amount of time elsewhere or who might already be big buyers in local lifestyle magazines, etc. I don't hear many stations going after the advertisers in the local glossies like 7X7 or in the club & White Party publications, for instance.