Some reader feedback on yesterdays article where we quoted Jim McLaughlin on ad contract escalators.

Hicks Outdoor founder Greg Hicks likes a 4 period minimum with an ability to convert to an annual rate at a slightly lower cost 

As a small independent we do a 4 period minimum plus a production and installation fee with the client’s ability to convert to annual contract at a lower rate and credit for production and installation. Four periods still gives us a small profit after covering the cost of production, installation and the removal at the end of the 4-period term. We currently don’t have digital options.

Steve Guild says customers understand escalator clauses because we all experience inflation

A simple way to explain 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.

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