Was tempted to share some benchmarks on just how fast newly acquired advertisers jump ship, but I thought it would be better to first share some insights into what’s causing the churn much of the time.
Using Too Many One-Offs Trying to Make The Month
Pretty obvious, self-inflicted case of bringing in an advertiser you know isn’t coming back. This can become almost an addiction, one that becomes harder to get away from. The more time the reps spend selling products like this, the less time they have to develop viable prospects into ongoing customers. This drives the need for more next month, and so it goes.
My son and business partner once said to me, “Every time they sell a one-off, it’s reinforcement that they don’t have faith in their ability to bring in new advertisers and keep them.” There are certainly legitimate one-offs from time to time. If you find yourself doing more than a handful a year, ask yourself when you’re going to get off that merry-go-round.
Selling Something To Anyone
This is the mindset of a rep that’s operating under the directive to increase actives. It’s often the byproduct of a push for more cold calls. If ‘more actives’ is the formula for more revenue, what’s the precursor to more actives? More calls, right?
Those of us that have been around for a while have surely been told that ‘you need to knock on more doors’ as the cure for most revenue problems. This leads to an awkward, unproductive conversation with an SMB that’s already being bombarded by people that want them to spend money on some form of advertising or marketing.
The end result is the prospect buying the least expensive thing the rep has to offer. The rep gets a new active and the SMB gets the rep out of his or her store. And the prospect is likely to join the 40% of advertisers that run once a year.
Doing the Same Thing the Same Way, Chasing an Entirely Different Audience, and Expecting It to Work
This is like four all wrapped into one. They leverage each other, either positively or negatively.
Think about the sales process that sustained us for a century or so. The prospects were fairly obvious – they were running mass advertising of some kind. Preferably a lot of it. We got a healthy share of these people’s budgets, and we didn’t have to chase prospects smaller than this. Very rarely did we have to talk to people who weren’t already pretty active advertisers.
Now we say, “We need to increase the amount of local ad revenue, to go after smaller prospects.” Yet the sales process really doesn’t change.
Here’s some things you need to address.
1. Define ‘small’ and install processes that stay away from prospects that have little potential to meet that level.
In the previous post, I mentioned the struggles with huge numbers of accounts running very small amounts, even at papers that have dictated a minimum. The disconnect is that the current sales process doesn’t establish, up front, whether this prospect is likely to exceed the minimum. You don’t realize it until after the fact because you’re still selling the same way, in spite of the ‘minimum’ edict.
2. Qualifying Prospects
9 people out of 10 confuse this with a Needs Assessment. Ever hear the commercial that says, “If you owe the IRS more than $10,000, call us…”? What else are they saying?
If you owe less than that, don’t call us. They qualify upfront, not after an extensive interview. There’s 3 or 4 questions you can ask very early in the conversation that qualify whether you are talking to someone capable of spending at least the minimum. If they’re not, resist selling them ‘something’. Leave.
3. Wean yourself from cold calling.
When the big spenders were abundant and fairly obvious, you knew you were pursuing a viable prospect. As you dive into the SMB market, it’s sobering to think that as much as 80% of them have little to no idea how to market themselves.
They may be spending a bit of money, but they lack strategy. So tactic after tactic fails. Embrace inbound content marketing to get the more sophisticated merchants to raise their hand and engage you. We’ve been using this for over 10 years and will be writing a lot more about it soon.
4. Segment prospects based on qualifying and sell (or don’t sell) them differently.
Sorting the prospects into three segments based on potential and their level of marketing sophistication will help you to focus your resources where they’ll have the most impact. I will go into this in more detail in a future post.
What’s next?
Want to know how you compare to over 100 papers in several key areas of retention? I’ve put together a report “Revenue Retention Benchmarks for Newspapers” that summarizes our findings. You’ll see screenshots of the actual analysis, as well as benchmarks on acquisition, account churn, which products seem to retain better than others, etc.
This will only be sent to current clients and people that have opted in to my list. You’ll also receive a best practices report on the newspaper we analyzed that had the best metrics.
Click the button below to sign up for the list and receive a copy of this valuable report. If you’ve already signed up, you’ll be getting it soon.