Outsourcing: Its NOT About Headcount

Presented by

Jim Taszarek, President

Public Radio Partners

Outsourced UnderwritingIs it right for you?

• Reasons stations have outsourced

• Considerations in decision

• How it works

• Elements of an agreement

Outsourced Underwriting Defined

• Complete responsibility for underwriting

• Accountable for achieving station goals

• Local sales staff representing station

• Managed and employed by PRP

• Revenue from marketing, advertising and community relations budgets

Stations PRP Represents

PhoenixPhoenix

SeattleSeattle

NashvilleNashville

AustinAustinLas VegasLas Vegas

PRP Employees

• Principals

– Kirk Nelson

– Jim Taszarek

• 25 Employees

• Combined, over 200 years of:

– marketing experience

– sales experience

– corporate support experience

PRP Vision

Attract the best people who together create the

standard of excellence for corporate support

in Public Radio

PRP Mission

Link stations and corporate supporters in a

mutually beneficial relationship that enables

the station to better serve the community and

helps the underwriter grow their business

PRP Philosophy

Public Broadcasting’s

– Quality Programming

– Non-commercial nature

Are what the audience and underwriters value

Respect and protect that nature in order to

make underwriting a significant and sustainable

revenue source

Track Record of Sales Growth

• Year 1 - 19%

• Year 2 - 29%

• Year 3 - 25%

• Year 4 - 21%

• Year 5 - 18%

Aggregate billing performance for each year in a

market

Reasons Stations have Outsourced

• Greater revenue

• Accelerated department performance

• Create stability

• Professional sales management

• Improved relationship with sales team

• Improved department performance without need to focus on underwriting

• Transfer risk of growth

Station Benefits Beyond Expectations

• Morale improved beyond expectations

• Growth was higher than expected

• More conservative on copy guidelines than expected

• Transition to outsourced organization easier than expected

• Less HR to manage

• Brings new ideas in from other markets

• Working with folks who "get it"

Considerations In Your Decision

• Revenue Performance

• People – Investment in People

• People – Talent of Underwriting Team

• Inventory

Revenue Performance

How does the station’s underwriting performance

compare to:

• Industry

• Market

• Station needs

Investment in People

• New rep guarantees

• The Big Risk – high hidden cost of turnover

• The cost of staff turnover in underwriting

– New rep minimum $20,000

– Experienced rep – attrition in accounts could be more

Talent of the Underwriting Team

• Does the Underwriting Manager have experience and track record of underwriting management success?– Recruiting– Managing salespeople– Inventory management– Team revenue growth

• If not, can I hire a person with this experience?

Inventory

• Your second greatest resource in underwriting is:

– Inventory

• Radio and television, being intangible mediums, requires expertise in proper yield management

Yield Management

• Price forecasting process

– Maximize revenue and yield from inventory

– Provide predictive strategic information

• Goal

– Max number of customers

– Max price levels

Considerations In Your Decision

• Revenue Performance

• People – Investment in People

• People – Talent of Underwriting Team

• Inventory

How It Works

• Alignment

• PRP approach

Integration of Underwriting Dept.

• Goal: Build trust and understanding– Programming

» Inventory» Copy» News

– Business» Traffic system utilization» Collections process

– Development» Joint effort» Leads generation

PRP Systems and Tools

Process• Sales• Sales Management• Recruiting• New Hire Start Plan

Tools• Training• Intranet• Sales Database• Underwriter Appreciation

Program

Elements of an Outsourced Agreement

• Exclusive agent for all local and national underwriting

• Clearly defined underwriting inventory

• Outsourced organization provides

– Underwriting sales manager and staff

• Station provides

– Ratings and Qualitative data

– Traffic and billing functions

Elements of an Outsourced Agreement

• Commission only - paid on billing

• Agreed upon annual billing budgets

• Special promotions

• Station approves underwriting copy

• Indemnification

• 5 year agreement

• Spirit of the agreement

Questions?