The benchmarking report on radio digital sales primarily focuses on the success and growth of these ads by stations. It also asks managers an important question: Have they updated sales comps in the last few years? The majority (62%) said no.
This revelation deserves conversation. Sales is a competitive field with high turnover. Keeping great talent is essential for success in digital ad sales. Not making adjustments or assessments could mean stations lose employees and have to start over with new hires.
The Connection Between Sales Comps and Digital Success
On the flip side, 38% of general managers said they had made changes. Some of the responses included:
- Offering more incentives for hitting budget
- Centering comps around retention and renewals
- Moving from gross to net or vice versa
- Separating commissions between radio and digital
There’s no magic formula for sales comps to drive digital success. We’ve observed some best practices from customers who are growing this revenue.
The first is simply to review this every year. A lot can happen in 12 months that should inform compensation and commission. Economics can change. Your specific market can evolve. The costs of media may increase or decrease.
Second, we recommend that radio and digital have separate commission models. If they are the same, sellers may stick with selling only what they know, leaving money on the table. Your radio customers are buying digital; if it’s with you, you gain more of their wallet share.
Third, experimenting with digital comps provides insight into what motivates sellers and can incentivize them to add digital to every proposal. They may not win every time, but advertisers will see a complete media plan from a single source. They are now fully aware of everything you offer.
These three guidelines can move sales in the direction you want to see. Otherwise, things stagnate, and there will be little movement in overall revenue growth.
Why Is the Norm to Wait Multiple Years?
The reasoning behind this is likely complicated and unique to each organization. Maybe this is how they’ve always operated. Another reason could be that it takes time and research, which may be in short supply.
Not making this a priority and part of your annual budget is a missed opportunity. Digging into the data from the year before can guide future decisions. The reporting capabilities from your ad tech will tell you the story of tactics sold, renewals, profits and performance.
By reviewing this, you could determine that tactics like display are always in the package, but others rarely are. Is that because it’s a cost-effective, universal option? Or are sellers simply not adding other ones because they don’t feel confident?
You can then compare this information to industry trends like those from the benchmarking report. Its conclusions show a high demand for OTT/CTV and social. Again, this could be lost opportunities because advertisers don’t know you offer these and use other vendors. In turn, you may want to incentivize those tactics at a higher commission to engage sellers.
Another consideration is changing the behavior of only putting one digital tactic in a proposal with radio. Studies show that multi-tactic campaigns perform better. Sellers need to be in the habit of this, and we suggest the 3-6-5 method: three tactics, six months and $5,000.
The potential result is a campaign that exceeds expectations, making renewals much easier to capture.
Unchanged Digital Sales Comps Impact Your Bottom Line
Leaving comp plans the same year-over-year will likely lead to dissatisfaction and lost sales. It can be a challenging exercise, but it’s worth the time to address annually.
It’s also a good idea to test different commissions. We built a digital sales commission and margin calculator, so you can do that.
