On last week’s Bell Board Podcast, out of home sales expert Kevin Gephart said to avoid focusing on short term ad contracts. Here are the results of our readers poll on the minimum length of ad contract out of home companies will accept.
Jim Mclaughlin says you should also think about annual escalators
The question should not be will you accept short term business (every company should), but rather what term would you like to see on all contracts that your local salesperson brings in. My favorite, by far, is a 39 to 65 period deal with annual rate escalators. The compounding effect on revenue and occupancy is amazing over time.
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A simple way to spend the annual escalators to the customer is offer it for 13 periods/12 months at a given rate. For longer-term contracts, use that 12 month rate as the average over the course of the contract. The customer loves the early discounts and the knowledge that the average rate over the course of the contract will remain at the original annual rate. They also understand the escalators since we all experience inflation.