The Rate Conversation

What do you charge for your goods and services? Is it the same as it was twenty, thirty, or worse, fifty years ago? I dare say there are some operations I have worked with, in the last twenty years, that have not had a rate increase, ever. If anything, rates have decreased over time. How is that possible? Please, tell me? I am curious and I want to know. Is there another business vertical where the price of operation and the cost of doing business has gone down? In fact, the cost of running broadcast stations has not decreased in that same time frame. We all have overhead. And our operating margin should be based on our ability to charge fair market value for our commercial inventory, i.e.: our goods and services, much like other business categories. Sadly, this is not the case. Commercial inventory prices have not kept pace with other consumer categories. Most of which reflect input costs as a factor of pricing.

Recently, I had to have the ‘rate conversation’, with someone who couldn’t believe that we are charging what we are for advertising. He said, “I have never paid that in my life at your station.” My answer was, “Ok, I guess you won’t be on then.” Oh, the horror. Broadcasters live in fear of that conversation. They don’t want to tell a long-time advertiser that it now costs more to buy the same service they had previously been getting for half, or less than half. My attitude is, “So what.” But broadcasters all over the world live in fear of losing one customer, even ones that cost them money. Your customers talk. When you allow the low-rate person to continue at the rock bottom price, he/she is not only going to brag about it to anyone who will listen. But they will influence those you have charged the going rate to and convince them they have overpaid. One bad contract could be costing you hundreds of valuable ones. Take a different approach.

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