Download - Smart Inventory Management
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Smart Inventory Management
Kirk Nelson, CRMCVice President, Sales & Marketing
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Sound Familiar?
• I always have tons of inventory…
• I have plenty of inventory, but Morning Edition is always sold out…
• Our rates in morning and afternoon drive are FANTASTIC, and we still have tons of inventory left to sell…
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• My drive time inventory is sold out, but I’ve got tons in midday, evenings and weekends…
• There are certain shows on the weekend where inventory always seems to be sold out, like Car Talk and A Prairie Home Companion, but nobody seems to want to buy the other programs…
• We are sold out for the next six weeks…
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• I’m only selling about 60% of my stations drive times, and only 25% of all the other dayparts…
• I’m doing a great job selling out my stations inventory, but I still haven’t made budget. I need more inventory…!
• What’s the point ?
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YOUR INVENTORY DEMAND IS A DIRECT REFLECTION OF HOW
YOU ARE SELLING UNDERWRITING
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Inventory Management Approach
1. Set Up Reports2. Look for Stories3. Create a Sales Strategy4. Monitor Sales Behavior 5. Evaluate Results6. Make Adjustments
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Traffic Report Set-Up
• Avails Report• Average Unit Rate report• Billing History - Scheduled• Billing Projection – Contracted• Conflict Codes - Category
Report • Aged Receivables
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Critical Point
Your inventory should always be a reflection
of your revenue
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Look For Stories
• The obvious:– Tons of inventory?– Disproportionate use of drive
times? – Weak selling periods?– Sold out for next 8 weeks?– Some weekend shows sold out?– Selling Morning Edition as
daypart?
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• Not so Obvious:– Rate averaging over schedule?– Soft major categories?– Categories our revenue comes
from?– Too much billing from too few
accounts?– Too many small underwriters?– Not attaching revenue to inventory?
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Create A Sales Strategy
Four Guiding Principles1. Grid Theory2. Locomotive Theory3. Belief System4. Pricing Philosophy
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Principle One
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Principle Two
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Principle Three
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Principle Four
The theory of supply and demand describes how prices vary as a result of
a balance between product
availability at each price (supply) and the desires of those with purchasing power at each price (demand).
Alfred Marshall
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Create a Sales Strategy
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Three Common Themes
1. Tons of extra inventory - December & January
2. Business soft during Summer
3. Disproportionate use of drive times
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Strategy Number One
Situation: lack of demand Dec/Jan
Solution:“Thank You”• December 5 - evaluate inventory• Available late December – early
January• Sales offering• Prior year underwriters only• Make it physical • Track daily
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Strategy Number Two
Situation: Soft Summer
Solution: Summer offering• Tiered discounts• Plans limited to 13 weeks• Provided incentives
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Strategy Number Three
Situation: Buying only Morning Edition
Solution: Retailers KitFour marketing legs
1. Web page2. Station promos3. Underwriting credits4. Static window sticker
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Monitor Sales BehaviorWeekly Behavior
– Order Entry•Schedule inventory expectations•Rates assigned to inventory•Rate alignment with expected standards
•Proper coding– Presentations
•Amount of ask (share or rate)•Negotiation outside of standards•Pending Business
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Monitor Sales Behavior
Monthly Behavior– Projections– Pacing – Average unit rate by daypart– Percent of inventory sold by
daypart– Expected growth by rep experience
•Entry level•Experienced •Seasoned
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Evaluate Results
Based on your sales strategy– Met or exceed budget expectations
•Collections pacing with revenue•Average AR report
– Increase sell of spread– +/- AUR– Increase unit count per month– Average spending by account– Revenue growth by rep
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Make Adjustments
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Basic Adjustments
Situation: I always have tons of inventory…
Adjustment: 1. Reduce your rate structure2. Promote packaging3. Hire more sales reps
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Situation: I have plenty of inventory, but
Morning Edition is always sold out…
Adjustment: 1. Increase morning drive rates2. Expand Daypart to 5A-10A3. Offer bundled price reduction plans
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Situation: Our rates in morning and afternoon drive are FANTASTIC, and
we still have tons of inventory left to sell…
Adjustment: 1. Reduce your rates to coincide with
inventory demand2. Package more inventory together
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Situation: My drive time inventory is sold
out, but I’ve got tons in midday, evenings and weekends…
Adjustment: Adjustment: 1. Increase morning drive rates2. Offer bundled price reduction plans
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Situation: There are certain shows on the
weekend where inventory always seems to be sold out, like Car Talk and A Prairie Home Companion, but nobody seems to want to buy the other programs…
Adjustment: Create a Car Talk (or whatever) package
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Situation: We are sold out for the next six
weeks…
Adjustment: Raise your rates!
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Situation: I’m only selling about 60% of my
stations drive times, and only 25% of all the other dayparts…
Adjustment: 1. Maintain rate card2. Bundle inventory at uniform levels
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Situation: I’m doing a great job selling out my stations inventory, but I still haven’t made budget. I need more inventory…!
Adjustment: 1. Evaluate inventory 2. Adjust rates
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Inventory Management Approach
1. Set Up Reports2. Look for Stories3. Create a Sales Strategy4. Monitor Sales Behavior 5. Evaluate Results6. Make Adjustments
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Final Thought
Let your pricing system work for you•Specific program purchase•Long term discounts•Contract length•Non-profit rate approach•Priority codes•Packages promoting SHARE•Exceptions
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?? Questions ??
Kirk Nelson, CRMCVice President, Sales & Marketing