By Kevin Gephart
Begin the renewal no later than 100 days before the end of the contract. It allows time for the process and, if need be, puts the unit(s) back in inventory no later than 60 days before the end of the contract.
Always service as though the client is going to cancel. You shouldn’t be blindsided by a client cancellation because you have been servicing/communicating with them closely throughout the contract.
Clients make up their mind about your rate increase based on how thoroughly/confidently you make the request. An advertiser can tell if you believe in your products/pricing/your rate increase. Sell yourself as the value-added in continuing the contract.
In the Client-Hat/Company-Hat balance, here you need to be on the client side. The rate increase isn’t coming from you, it’s being dictated by market demand. Your company’s rates are a direct reflection of your branch’s collective sales strength. Build rate-increase strength by building your customer base.
Always deal in assumptive terms, don’t ask “if” they’re going to renew. Proceed as though they are renewing and you’re just working out the details.
Upsell your client by showing advantages/options/pricing for buying a bigger program. If you share the business with a competitor this is the time to negotiate for market share.
Give the advertiser a comprehensive recap of the contract to set the stage for valuing your product. Show the extraordinary service elements you’ve delivered over the course of the contract including a complete override report showing the amount of over-delivery they received.
You must always get a rate increase, even a nominal one. It is impossible to recoup lost rate increases later. 00H companies and clients always discuss rate increases as a percent. Often it is more palatable for a client to accept a $90 dollar increase on a $1000 unit than a 9% percent increase.
Don’t ever use national info about the advantages of OOH to get an increase. You must have tangible “local” business reasons for the increase. If your manager/company doesn’t provide that you need to dig it out.
The most compelling business reason for an increase: your company is doing a better job of getting results for local advertisers thus there is much greater demand on inventory.
Illustrate other important facts like:
- your average overall cost of branch operation has increased X%
- your average lease cost has increased X%
- you’re reaching more prospects because your market population has increased X%
- your plant average weekly impressions per unit have increased X%
- major improvements/maintenance/upgrades to boards, lighting, production processes, etc.
An incumbent advertiser may be getting their unit(s) too far below market value. Don’t be afraid to sell those units to a new advertiser at a higher rate rather than continuing to grandfather in a low rate. As I wrote in the CLOSING column on 8/16, you may need to create urgency: explain there are other advertisers looking at their unit(s).
If an advertiser simply cannot afford the rate increase, you may have to come to the difficult conclusion your products value has outgrown the advertiser.
Don’t fall for the line that no one else is increasing their rates. You can think out loud: “I wonder why they don’t have more demand on their inventory?”
Next week: Handling Cancelations
If you have comments/questions, contact me at: KevinJGephart@gmail.com
[wpforms id=”9787″]
Paid Advertisement
