Smart Inventory Management

Kirk Nelson, CRMCVice President, Sales & Marketing

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…

• 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…

• 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 ?

YOUR INVENTORY DEMAND IS A DIRECT REFLECTION OF HOW

YOU ARE SELLING UNDERWRITING

Inventory Management Approach

1. Set Up Reports2. Look for Stories3. Create a Sales Strategy4. Monitor Sales Behavior 5. Evaluate Results6. Make Adjustments

Traffic Report Set-Up

• Avails Report• Average Unit Rate report• Billing History - Scheduled• Billing Projection – Contracted• Conflict Codes - Category

Report • Aged Receivables

Critical Point

Your inventory should always be a reflection

of your revenue

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?

• 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?

Create A Sales Strategy

Four Guiding Principles1. Grid Theory2. Locomotive Theory3. Belief System4. Pricing Philosophy

Principle One

Principle Two

Principle Three

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

Create a Sales Strategy

Three Common Themes

1. Tons of extra inventory - December & January

2. Business soft during Summer

3. Disproportionate use of drive times

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

Strategy Number Two

Situation: Soft Summer

Solution: Summer offering• Tiered discounts• Plans limited to 13 weeks• Provided incentives

Strategy Number Three

Situation: Buying only Morning Edition

Solution: Retailers KitFour marketing legs

1. Web page2. Station promos3. Underwriting credits4. Static window sticker

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

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

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

Make Adjustments

Basic Adjustments

Situation: I always have tons of inventory…

Adjustment: 1. Reduce your rate structure2. Promote packaging3. Hire more sales reps

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

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

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

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

Situation: We are sold out for the next six

weeks…

Adjustment: Raise your rates!

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

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

Inventory Management Approach

1. Set Up Reports2. Look for Stories3. Create a Sales Strategy4. Monitor Sales Behavior 5. Evaluate Results6. Make Adjustments

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

?? Questions ??

Kirk Nelson, CRMCVice President, Sales & Marketing