Session: Setting Long Term GoalsSession: Setting Long Term Goals

Kirk Nelson, VP Public Radio PartnersKirk Nelson, VP Public Radio Partners

The nicest thing about not planning is The nicest thing about not planning is

that failure comes as a complete that failure comes as a complete

surprise rather than being preceded by surprise rather than being preceded by

a period of worry and depression. a period of worry and depression.

John Harvey-JonesJohn Harvey-Jones

Setting Long Term GoalsSetting Long Term Goals

1.1. What’s long term?What’s long term?

2.2. Establishing long-term revenue Establishing long-term revenue projectionsprojections

3.3. Creating an annual planCreating an annual plan

What’s Long Term?What’s Long Term?

Station philosophyStation philosophy• Where are you are at?Where are you are at?• Where are you going?Where are you going?• Where station want’s to go?Where station want’s to go?

Long-Term Revenue ProjectionsLong-Term Revenue Projections

Where’s the money?Where’s the money?

How do you project long-term How do you project long-term revenue growth for department?revenue growth for department?

Value of InventoryValue of Inventory

$25

$32

$50

$125

$3,200

$0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500

Broadcast

Web

Events

E-Newsletter

Challenge Grants Values in

thousands

Project Long-Term Revenue GrowthProject Long-Term Revenue Growth

Converting broadcast ratings into Converting broadcast ratings into revenuerevenue• Conversion RatioConversion Ratio

Market revenue projectionMarket revenue projection X stations P12+ AQH Share (4 book avg) = X stations P12+ AQH Share (4 book avg) =

1:1 ratio1:1 ratio Station revenue ÷ 1:1 ratio = Conversion Station revenue ÷ 1:1 ratio = Conversion

RatioRatio

Evaluating Station Product PotentialEvaluating Station Product Potential

Projecting revenue from current Projecting revenue from current ratingsratings

Calculate 4-book avgCalculate 4-book avg Market revenue projection x P12 AQH Share Market revenue projection x P12 AQH Share

x 50% x 50%

50% conversion represents the 50% conversion represents the highest performing averagehighest performing average

Conversion Ratio GraphConversion Ratio Graph

Evaluating Station Revenue PotentialEvaluating Station Revenue Potential

Conversion VariablesConversion Variables• Higher averageHigher average

NPR/News formatsNPR/News formats Market dominanceMarket dominance Large sales staffLarge sales staff

• Lower averageLower average Classical, Jazz and AAA formatsClassical, Jazz and AAA formats Major market agency dependenceMajor market agency dependence

Market Revenue ResourceMarket Revenue Resource

Investing in Radio BIA FinancialInvesting in Radio BIA Financial

J.C. PatrickJ.C. PatrickNPR Station Development ManagerNPR Station Development Manager1.800.329.5380, ext. 2736 stations1.800.329.5380, ext. 2736 stations281.494.6577 direct281.494.6577 direct281.494.6578 fax281.494.6578 faxjcpatrick@npr.orgjcpatrick@npr.org

Revenue LeversRevenue Levers

Performance comes fromPerformance comes from• PeoplePeople• InventoryInventory• SystemsSystems

Creating an Annual PlanCreating an Annual Plan Create Operating PlanCreate Operating Plan

• Annual Business Plan for departmentAnnual Business Plan for department Focused, planned, deliberate & Focused, planned, deliberate &

benchmarked benchmarked

• Communicates objectivesCommunicates objectives Sales Reps, GM, Development, Accounting, Sales Reps, GM, Development, Accounting,

Traffic, ProductionTraffic, Production

• Helps you make adjustmentsHelps you make adjustments Monthly, QuarterlyMonthly, Quarterly

Creating an Operating PlanCreating an Operating Plan Survey historical performanceSurvey historical performance

• Benchmarking revenue pacingBenchmarking revenue pacing By repBy rep By departmentBy department

• Inventory snapshotInventory snapshot Three scenariosThree scenarios

• 100% at rate card100% at rate card• At AUR & projected selloutAt AUR & projected sellout• One for planning purposesOne for planning purposes

Benchmarking Revenue PacingBenchmarking Revenue Pacing

ObjectiveObjective

PRP Operating PlanPRP Operating Plan• Annual action planAnnual action plan• Focus on those few thingsFocus on those few things

• PeoplePeople• InventoryInventory• Department InitiativesDepartment Initiatives

• Greatest resultsGreatest results• Reviewed monthlyReviewed monthly• Operationally automaticOperationally automatic

Getting StartedGetting Started

Your CityYour CityMarket Operating Plan FY ____Market Operating Plan FY ____

Department GoalDepartment Goal Revenue:Revenue: $$ Growth:Growth: %% Revenue goal in dollars and Revenue goal in dollars and

percentage growthpercentage growth (Attach Annual Budget Projection)(Attach Annual Budget Projection)

Two Steps to Projecting RevenueTwo Steps to Projecting Revenue

1.1. Understand your inventoryUnderstand your inventory• Scenario 1Scenario 1

Total available at rate cardTotal available at rate card

• Scenario 2Scenario 2 Inventory at average unit rateInventory at average unit rate Or for planning purposesOr for planning purposes

• Scenario 3Scenario 3 Assumption usage/AUR prior yearAssumption usage/AUR prior year Or use for planning purposesOr use for planning purposes

Two Steps to Projecting RevenueTwo Steps to Projecting Revenue

1.1. Understand your inventoryUnderstand your inventory• Total available at rate cardTotal available at rate card• At average unit rateAt average unit rate• Assumption usage/AUR prior yearAssumption usage/AUR prior year

2.2. Build your budget revenueBuild your budget revenue• By repBy rep• By monthBy month• QuarterQuarter• Average weeklyAverage weekly• Total growthTotal growth

Rep Growth RatesRep Growth Rates

First Year 100K – 150KFirst Year 100K – 150K Year Two 250KYear Two 250K

+ 50 – 100 % prior year+ 50 – 100 % prior year Year Three + 25 – 50%Year Three + 25 – 50% Year Four + 20%Year Four + 20% Senior Rep +10% Senior Rep +10%

AE Billing PerformanceAE Billing Performance Research and benchmark yoursResearch and benchmark yours

New Rep Growth ExpectationsNew Rep Growth Expectations

$0 - 1,500$0 - 1,500 Month 1 Month 1 $2.5 - 5,000$2.5 - 5,000 Month 2 Month 2 $5 - 10,000 $5 - 10,000 Month 3 Month 3 $7.5 - 10,000 $7.5 - 10,000 Month 4 Month 4 $8 - 12,000$8 - 12,000 Month 5Month 5$8 - 12,000 $8 - 12,000 Month 6Month 6$10 - 15,000 $10 - 15,000 Month 7Month 7$10 - 15,000 $10 - 15,000 Month 8Month 8$10 - 15,000 $10 - 15,000 Month 9Month 9$12 - 20,000$12 - 20,000 Month 10Month 10$12 - 20,000 $12 - 20,000 Month 11Month 11$12 - 20,000 $12 - 20,000 Month 12Month 12

Two Steps to Projecting RevenueTwo Steps to Projecting Revenue

1.1. Understand your inventoryUnderstand your inventory• Total available at rate cardTotal available at rate card• At average unit rateAt average unit rate• Assumption usage/AUR prior yearAssumption usage/AUR prior year

2.2. Build your budget revenueBuild your budget revenue• By repBy rep• By monthBy month• QuarterQuarter• Average weeklyAverage weekly• Total growthTotal growth

Plan OverviewPlan Overview

Few sentence overview of the market Few sentence overview of the market goal and initiatives to achieve yourgoal and initiatives to achieve yourgoal goal

Include last year’s revenueInclude last year’s revenue Incremental revenue to achieve goal Incremental revenue to achieve goal Summarize revenue impact of Summarize revenue impact of

initiativesinitiatives

Plan Overview - ExamplePlan Overview - Example

KKWW sales will be reaching a level of maturityKKWW sales will be reaching a level of maturitywith the current sales staff being in place for over 4 with the current sales staff being in place for over 4 years and in its available inventory that will yield a years and in its available inventory that will yield a 15.6% growth over 2004 fiscal year. We have two 15.6% growth over 2004 fiscal year. We have two continuing initiatives in 2006 that will help us in continuing initiatives in 2006 that will help us in meeting our goal including selling out our traffic meeting our goal including selling out our traffic sponsorships and continuing to increase our AUR sponsorships and continuing to increase our AUR against available inventory. New initiatives include against available inventory. New initiatives include a “large account” initiative, adding a fourth a “large account” initiative, adding a fourth salesperson, and attaching a revenue stream to salesperson, and attaching a revenue stream to KKWW’s newly created New MediaKKWW’s newly created New Media

Individual Salesperson GoalsIndividual Salesperson Goals

List each salesperson’s revenue goal List each salesperson’s revenue goal and growth percentage individuallyand growth percentage individually

Individual Salesperson GoalsIndividual Salesperson Goals

ExampleExample Johnny to grow 20% to 560,000Johnny to grow 20% to 560,000 Paul to grow 15% to $483,000Paul to grow 15% to $483,000 George to grow 35% to $395,500George to grow 35% to $395,500 Ringo to grow 60% to $230,000Ringo to grow 60% to $230,000 Pete to bill $95,000 in new revenuePete to bill $95,000 in new revenue Brian (SM) to grow 10% to $200,000Brian (SM) to grow 10% to $200,000

Initiatives and Action PlansInitiatives and Action Plans

Please include the following for each Please include the following for each initiative:initiative:• Description of the initiativeDescription of the initiative• Specific goalSpecific goal• Key actions and corresponding dates to Key actions and corresponding dates to

accomplish initiativeaccomplish initiative

Initiatives and Action PlansInitiatives and Action Plans

Please include the following for each Please include the following for each initiative:initiative:• Description of the initiativeDescription of the initiative• Specific goalSpecific goal• Key actions and corresponding dates to Key actions and corresponding dates to

accomplish initiativeaccomplish initiative

Adding one new sales rep in order toAdding one new sales rep in order toinsure revenue growth and to increasedinsure revenue growth and to increasedpressure on underwriting inventory pressure on underwriting inventory

Initiatives and Action PlansInitiatives and Action Plans

Please include the following for each Please include the following for each initiative:initiative:• Description of the initiativeDescription of the initiative• Specific goalSpecific goal• Key actions and corresponding dates to Key actions and corresponding dates to

accomplish initiativeaccomplish initiative

New rep will add $95,000 in new business New rep will add $95,000 in new business

during the upcoming fiscal year and helpduring the upcoming fiscal year and help

increase pressure on station inventory to 84%increase pressure on station inventory to 84%

Initiatives and Action PlansInitiatives and Action Plans

Please include the following for each Please include the following for each initiative:initiative:• Description of the initiativeDescription of the initiative• Specific goalSpecific goal• Key actions and corresponding dates to Key actions and corresponding dates to

accomplish initiativeaccomplish initiative

Posting week of June 9Posting week of June 9Interviews week of June 23Interviews week of June 23Finalists and referral calls week of June 30Finalists and referral calls week of June 30Offer letter week of July 7 with two week startOffer letter week of July 7 with two week startAverage billing $5-10K by month three and $8-Average billing $5-10K by month three and $8-12K by month six12K by month six

Initiatives and Action PlansInitiatives and Action Plans

Description:Description: Adding one new sales rep in Adding one new sales rep in order to insure revenue growth and to order to insure revenue growth and to increased pressure on underwriting increased pressure on underwriting inventoryinventory

Specific Goal:Specific Goal: New rep will add $95,000 in new New rep will add $95,000 in new business during the upcoming fiscal yearbusiness during the upcoming fiscal year

Key Actions and Corresponding Dates:Key Actions and Corresponding Dates: Posting week of June 9 Posting week of June 9 Interviews week of June 23Interviews week of June 23Finalists and referral calls week of June 30Finalists and referral calls week of June 30Offer letter week of July 7 with two week startOffer letter week of July 7 with two week startAverage billing $5-10K by month three and $8-12K Average billing $5-10K by month three and $8-12K by month sixby month six

Monthly Department UpdateMonthly Department Update

1-Year Operating Plan1-Year Operating Plan

Now your department has a plan Now your department has a plan

that’s:that’s: FocusedFocused Planned Planned DeliberateDeliberate BenchmarkedBenchmarked MeasurableMeasurable

One More Thought…One More Thought…

60 Minute Strategic Plan60 Minute Strategic Plan• 13 steps process for establishing long 13 steps process for establishing long

term goalsterm goals John E. JohnsonJohn E. Johnson

• 530-758-0203530-758-0203• http://www.60msp.com/http://www.60msp.com/• Email: JohnE57@AOL.comEmail: JohnE57@AOL.com

Setting Long Term GoalsSetting Long Term Goals

Questions?Questions?

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