Over the years we have had numerous customers ask us, “Why should I spend money on old media?” They didn’t exactly use the term “old media”, but the question always revolved around print (phone book, magazine, newspaper), television, radio, direct mail or billboard.
The mainstream media is quick to inform us that consumers are stampeding toward digital advertising, and that is partially correct. When we see our kids reading a magazine or thumbing through the sports section in the newspaper it does startle us a little knowing that the same information they are absorbing is readily available on their tablet or computer.
How is old media able to grow their revenue and footprint, when their core products are being replaced by an interactive tsunami? Wouldn’t the most logical approach be to focus on those customers who are already engaging in the products, and make an attempt to grow that engagement?
The short term solution for these companies is very simple, and one that few in old media have pursued: change the primary focus from the consumer or subscriber, and refocus on the employee. If someone builds a home on a beautiful island, yet there is no way to get there, what is the point? A media company can have a sophisticated digital media mix, but if they are constantly losing good sales people and failing to enrich the ones who stay, they will have no one to sell the shiny new objects.
Most old media companies are obsessed with adding more (digital) products to their portfolio, thinking that if they become more competitive with ad agencies they can become a one-stop marketing solution for their customers. That faulty assumption puts them into a precarious position. If an old media company offers a full suite of products to their customers, it does not guarantee that they will become more competent, agile and competitive.
Old media companies are not dying because fewer people are engaging with their products. They are dying because they are attracting fewer advertisers who keep their business alive and growing. These organizations are missing a crucial piece essential to their success- they need people who are experts at selling products against the competition, coachable enough to learn the new products and excited enough to want to sell the products at all costs.
Good salespeople can sell ice to an…individual who lives in an arctic region. They can also sell the value of an ever-shrinking audience to an advertiser, and get the advertiser to pay a premium for that opportunity. Good salespeople are hard to find, and even harder to hold onto.
By choosing to focus on products instead of people, old media companies are contributing to their own demise.
People have become a metric. Phrases like “If it’s not in SalesForce, it doesn’t exist” were never used just a few years ago. That was partially due to the lack of CRMs, which are commonplace today, but also because people are managed differently now. It has become much easier for a corporate office to micromanage their people from across the country with a few clicks of a mouse.
Rather than having salespeople spending their free time developing strategy or becoming subject matter experts, they are instead requiring reps to fill up their pipeline and close out their opportunities. To an absentee C-level manager it doesn’t matter if Ashley is a man or a woman when it comes to CRM management. Ashley is just an employee number who has, or does not have, all of the required information logged into the computer. If Ashley is not at 100% for an essential benchmark, Ashley is not working. Ashley might have a difficult market or have had a recent death in the family, but that doesn’t matter to an employer or fall into the profit equation. To senior management, all improvement trends are discarded- what has Ashley done for the company lately?
Top performers aren’t paid. All good sales managers hope that their sales reps make more money than they do. If salespeople make good money, the sales manager will make more money in commission and bonuses. This practice also alleviates the “management vs. sales” or “us vs. them” mentality that permeates so many businesses. The result intrinsically is teamwork at its best.
We’ve seen both sides of the coin at two different media companies. At one company, a manager’s base salary and bonuses is more than twice what the average sales rep can make with their base salary and commissions combined. Needless to say, the relationship between the sales teams and management/corporate is not ideal. Everything is in a constant state of chaos, and good employees are going out the door. Some of the salespeople who have been there for an extended period of time are complacent, and work just hard enough to do what they are asked. They have a “social security” mentality- they budget for the little amount they make and ensure that they live within that budget, since it isn’t going to increase in the near future.
On the other side of the coin is a company where all of the top performers make between 25% to 50% more than managers do. These employees are motivated, focused and excited to be at work. The turnover is comparable to the first company, but the people who stick around long term are President’s Club winners, they move up the ladder to other jobs they really want, or they continue to be a successful sales rep because they enjoy the money.
Top performers excel for a reason. They are able to sell around customer objections, they can effectively push non-competitive products, and they spend their free time focusing on personal growth opportunities while preparing for their next work day. An organization that doesn’t understand the value of these people deserve to fail.
Legitimate bonus opportunities are never offered. Would a business rather generate 100% of $0 or 75% of $1000? The answer to that question is easy. The assumption is that every old media company would have figured that math out by now, but they haven’t.
Salespeople aren’t going to work on a difficult project for a $65 bonus or 5% of an average sale, and rightly so, no matter how excited the manager is who rolled it out. They also don’t want to harass their existing customers for some short term “opportunity” for a minimal spiff. Doing so would only fracture the relationship they have nurtured with their client, even when a small financial benefit is available. A sales manager would never ask his landscaper to mow an acre of weeds for an extra $5, but that is in effect how he is treating his sales people.
Billionaire insurance magnate Art Williams once said, “People will bust their ass for a t-shirt”. He understood that individuals can wear a t-shirt as a badge of honor and show off their success, large or small, to the world. If they can’t own and wear that t-shirt, there will not be any ass busting going on. If a sales rep can’t see and feel and appreciate a bonus opportunity, the company failed foundationally and the reps will continue to focus on those other things that make the most money.
Old media veterans are brought in to fix things. You can’t teach an old dog new tricks, and you can’t expect change when you are depending on the same people who have contributed to the problem. Sadly, some old media companies are failing simply because of the decision makers they hire. Those people could not foresee a drop in revenue due to the changing advertising climate. They did not prepare for the exodus of advertisers by strengthening their products, presentation and media mix. And yet many old media companies still promote those same people into positions of leadership, effectively thanking them for their detrimental contributions.
We once worked on a special project for a client where we had the opportunity to bring something innovative and profitable into the marketplace. We knew that if this product was already working on a national scale, and if we were an early adopter for it locally, we could change the advertising landscape within our footprint. After constructing a comprehensive proposal that explained the product, the delivery and revenue opportunity, we presented our idea to an old media executive within the company.
What this person did next was shocking- she did not review the proposal with her peers and superiors. She went to the digital vendor the company was using and asked them about their thoughts on this opportunity. The vendor, who was already offering a similar yet sub-par product at a much higher price, said they wouldn’t recommend it. Of course not! Why would they want their customers to have a better product at a lower price point, when the vendor would lose revenue as a result?!
Changing the culture within a company can only begin when new ideas and insights from objective 3rd parties and new employees are considered equal to those ideas presented by tenured managers.
Beware of the survivors. Every old media company has a few lower level managers and sales people who have weathered the storms and hung in through all of the changes. Often they are looked at as a leader or a subject matter expert in the building. But after taking a closer look, a red flag rises up.
Some of these people are doing just enough to get by and have perfected the process of staying under the radar. Others have hidden their incompetence by successfully doing well those things that they understood, while disregarding the things that actually help their company’s revenue targets. And a select few survived for one reason only- they do not want to change, and they make sure that every person who pushed for change moves on.
A well trained and dependable employee will do what needs to be done. A few years ago we observed a sales rep renew a program that cost the customer around $8600 a year, and was yielding .6 calls a month. That translated into 7.2 calls PER YEAR. However, this sales rep successfully sold the customer on the value of branding and exposure, and referenced the tracked calls as “gravy” to the overall program. After a grueling 2 hours, the customer renewed for another year, and actually increased his investment.
Did the audience exposed to this advertiser’s campaign grow? No. Was the business owner paying more per lead than he ever had in years past, or would with another media company? Definitely. But the one variable that made a difference was the confidence, excitement and sales acumen owned by the rep.
We could not have been more impressed. This rep had been allowed freedom with his time management and activity, and any fears about wasted time were alleviated after the appointment.
His employer made a personal investment that made it possible for him to be successful. Otherwise, he would have been just another sales rep losing an advertiser and contributing to the eventual downfall of his old media company.