Tuesday, August 27, 2013 | Edited by Daniel Moores
||Video Did Not Kill the Radio Star, And Neither Will the Internet
Charlie Sislen, Partner with Research Director, has been involved with the radio industry for many years. In the following blog post, he addresses a common misconception regarding the medium.
On August 1, 1981, MTV debuted with the The Buggles' song, "Video Killed the Radio Star." Thirty-two years later, MTV has evolved and is no longer playing music videos. As far as radio, most stations are still pumping out the music and the hits.
So now we hear that the Internet is the next piece of technology that is going to kill the radio star. If you believe the digital audio services' claims, this has already happened.
The trouble is, there are no facts to back up these self-promoting statements. In every market we examined, radio has a ninety-plus percent reach. That means that just about everyone tunes to the radio in an average week. There goes the belief that radio is a dying medium.
Some diminish cume as not a true reflection of what is going on. We at Research Director, Inc. have looked at five-plus years of listening in a few random markets. We do not see the massive audience erosion that our competitors claim. In these markets listening is either flat, or in some cases up.
With all of the various options out there, how do you explain it?
Simple, RADIO IS MORE THAN THE MUSIC IT PLAYS.
What a music station does between the songs is equally important as the music it plays. Yes, the music is a major element of many radio stations, but it is not the only element. Successful radio stations (in both ratings and revenue) offer the listeners more.
Focusing on just the music is like a football team focusing on just the quarterback. While he may get all of the headlines, you can't win without the other members of the team. Great radio stations succeed on teamwork.
- They offer a local voice speaking up for the community.
- They offer companionship that people are always seeking.
- They offer information when there is a need to know.
Most importantly, we as an industry must stand up and let advertisers know our strengths. We need to address the perception that "nobody listens to the radio anymore" and prove them wrong with the facts. There are still many great radio stations in America, serving, informing and entertaining their community. What we play between the songs, including the advertiser's message, is as important as the music.
Anyone who believes differently is ill informed.
(Source: Research Director, 08/22/13)
||Power Companies Exploring New Ways to Attract Customers
Electric bills have long been take-it-or-leave-it affairs: Pay one rate for all the power you used the month before, no matter when you used it.
But some electric companies want to shake up that rigid business model. They are increasingly offering plans that sound like come-ons from mobile phone companies: free nights, free weekends and prepaid plans.
"We are seeing a transformation in the way people buy and use electricity in the U.S.," said Steven Murray, president of Direct Energy's residential energy programs.
The more customized plans are made easier by the growing use of digital meters that wirelessly link electric companies and customers, allowing both to track usage in real time. Digital meters have not only spurred competition, they have also enabled traditional utilities to reduce their costs by encouraging customers to use electricity during off-peak hours, when it is cheaper.
Forty-two percent of U.S. electric customers have digital meters, up from less than 5 percent in 2008. In 2015, more than 50 percent will have them, according to Navigant Consulting.
This new breed of electric plans comes with risks.
Customers can end up paying a lot more for power than they expected. Some plans offer low introductory rates that can quickly skyrocket. Others have high early-termination fees. Some fixed-rate plans are a great deal if power prices rise, but they may seem awfully expensive if prices fall.
If customers are careful, though, they can pay less.
Dorothea Miller of Sinking Spring, Pa. signed up for a Direct Energy plan that gives her one day of free power every week. She picked Saturday, and now saves as much of her housework as she can until then. She stops short, she says, of letting mountains of dirty laundry or dishes accumulate in anticipation of Saturday's free power.
"We pretty much run things the way we did before the plan, but now we set our dishwasher to go on after midnight (Friday) and do most of our laundry on Saturday," she said.
TXU Energy offers a similar plan to Texas customers that offers free power every night from 10 p.m. until 6 a.m., or free power Saturdays and Sundays, in exchange for a higher rate during other times.
Customized plans are most prevalent in the 13 states and Washington, D.C., where regulators have allowed companies to compete to sell electricity. In those states, the number of customers that have signed up with electricity suppliers that offer these types of plans rose to 13.3 million in 2011, from 8.7 million in 2008, according to the most recent numbers from the Compete Coalition, a group that lobbies to expand competitive electricity markets. The plans are also popping up in other states.
Electric competition has been around for more than a decade and utilities have experimented with pricing plans for even longer. But digital meters have made these plans easier to offer and manage. They are being installed around the world; utilities in China, Japan and across the European Union have aggressive plans to expand the use of digital meters.
In the U.S., companies have different motivations for offering innovative plans. Traditional regulated utilities are trying to reduce stresses on their grids. Upstart power providers are trying to lure new customers.
In both cases, they are trying to get customers to use less electricity when it costs more. Wholesale power prices fluctuate depending on the time of day, from zero overnight to thousands of dollars per megawatt-hour during a hot day.
Yet most customers see one average price every month, a price that includes those sky-high peak rates. With plans that offer prices that vary based on the time of day, customers can avoid high-cost power in the same way air travelers can save by not flying on the Wednesday night before Thanksgiving.
Power providers use fleets of pushy door-to-door sales people, pop-up-booths in malls and tens of thousands of mailed flyers to sign up customers. But it can be difficult to get people to switch because most people don't think about electricity unless they lose it, and the cost of electric bills isn't a major concern.
"It's not like an entertainment purchase where you can see the reward," said Bruce Stewart, chief marketing officer for Constellation Energy, the retail arm of Exelon Corp.
U.S. power prices have been mostly flat or declining since the mid-1980s, adjusted for inflation. A typical residential customer spends $110 per month on electricity. That's one-third the average amount spent by a family on gasoline.
Power providers have only had success attracting customers in the past when electricity prices are falling sharply because they can offer a quick, obvious savings compared with what the traditional utility offers. But now that 60 million customers have digital meters, they can offer plans that help customers save money based on how and when they use power, not just with a cheaper price.
Direct Energy ran a simple, silly TV advertisement pitching its free power day that included a woman blow-drying her golden retriever -- why not, if the power is free? Oklahoma Gas & Electric offers a plan called "SmartHours" that offers lower rates to customers who cut back on power usage during hot summer afternoons, along with a thermostat that can adjust itself based on electricity prices.
"To differentiate yourself you have to craft a product that makes things easier," said Bill Massey, a former federal energy regulator now at the Compete Coalition.
Companies are offering prepaid electric plans that, like prepaid mobile phone plans, can be cheap and include no sign-up fees or deposits. Customers get text and email alerts when they've used most of the electricity they've paid for. By paying attention to their use they use less, which lowers their bills further. Prepaid customers can have their power cut more quickly, though, if they have trouble paying for more electricity. In Texas, for example, if a prepaid balance falls below a certain level, power can be cut in as little as a day after the power provider issues a warning.
"Some (new plans) will be good for some people and some will be very, very bad for other people," cautioned Janee Briesemeister, a senior legislative strategist who works on electricity issues for the AARP.
Many in the industry think that companies will learn to offer ever more straightforward and useful plans in order to woo and keep customers, and customers will learn to shop for electricity the way they shop for phone or cable service.
"The industry is only at the beginning of learning to understand their customers and figuring out what people want to do," said Brian Seal of the Electric Power Research Institute, an industry-funded technical group.
(Source: The Associated Press, 08/19/13)
||Last Chapter for Independent Bookstores? Not Just Yet
McIntyre's Books in Pittsboro, N.C., has been in business for 25 years. During that time, Keebe Fitch, daughter of the founders, said the shop has seen its share of ups and downs.
"We had double-digit growth in book sales for years until a Barnes & Noble opened on a highway near us around 1991, and then it all came crashing down," said Fitch, who sold real estate for a while before returning to the store as its manager.
"But we've buckled down and have been able to hold on for the long haul," said Fitch, who has a five-person staff. "Our gross sales are up 14 percent so far this year and were up 13 percent in 2011. We've learned how to change and get stronger."
Fitch and her store -- located in the planned community of Fearrington Village near Chapel Hill, the campus of the University of North Carolina -- are part of a small but growing resurgence of independent bookstores in the U.S.
"Sales from independent bookstores in 2012 were up eight percent over 2011," said Dan Cullen a spokesman for the American Booksellers Association, a nonprofit trade group of independent bookstores.
"We've got people opening new bookstores and people buying into existing ones," he said. Talk of the death of independent bookstores "as a result of the big-box stores was premature at best," he added.
The dire prediction may have seemed a natural conclusion at one time. Some 1,000 independent bookstores went out of business between 2000 and 2007, according to the ABA, as consumers turned to online buying, downloading e-books, or flocking to Barnes & Noble and Borders (the latter now defunct).
But the ABA said that since 2009, the number of independent bookstores has risen 19 percent, to 1,971.
"When the box stores came into vogue, everyone quickly moved on from smaller stores because the allure of being able to see and purchase a much larger quantity of books was very enticing," said Dick Brulotte, manager of the independent Beehive Books, in Delaware, Ohio.
"Those that tried to stick it out had to find a niche, which would still draw in customers," he said. Brulotte had worked full-time at a Borders location after his retirement from teaching.
Fitch at McIntyre's Books said, "We didn't want to be a superstore, so we learned how to get books that people couldn't find online, and to cater as much as we could to the customer. When a customer walks in, we try to make them feel wanted and at home. It's a very personal experience."
The personal touch
That kind of service, in addition to being local, has been key for independents, according to Ronald Hill, professor of marketing and business law at Villanova University.
"There will always be those who prefer local businesses over chains and close ties over discount prices," he said. "They are willing to pay more for the personal touch that comes with deeper relationships at the community level."
Antoinette Kurtz, a community relations coordinator at Barnes & Noble for five years in the mid-1990s, said the chain had started out as customer-friendly but then changed its business model.
"They moved to a corporate and school sales focus and stopped doing author readings and community events," said Kurtz, now a marketing and public relations representative for authors.
"Those type of sales may be bigger on an individual basis, but in the longer run they are smaller," she said. "What they did was to forget how to draw in customers."
Calls to Barnes & Noble for comment were not returned.
Though Fitch at McIntyre's said matching Barnes & Noble's price discounts is not part of her strategy, other owners feel the need to compete on price.
"Pricing is key for us," said Kathy Doyle Thomas, executive vice president of Half Price Books, a family-owned chain of small bookstores with 116 outlets in 16 states.
"Customers love HPB because of our prices and selection," she said. "When you can give your customers a great product at a great price, they will buy more."
Other tactics include cutting down on items that don't move.
"We got rid of dictionaries and travel books," Fitch said. "We've been judging the kind of books people want."
Independents must find ways to provide extra value to help keep customers and gain new ones, said Beehive Books' Brulotte.
"We've added services such as ordering hard-to-find and out-of-print books and will soon...order e-books and e-readers for those who have made the electronic transition," he said.
Some book shops are offering full printing services for on-demand books, while others employ updated marketing outreach.
"We used to mainly focus on radio and print but in addition to that, we're using strategies like advertising on Facebook, Pandora and more," said Doyle Thomas at Half Price Books. "These strategies are important for us in expensive media markets like San Francisco."
The independents still standing have endured a tough elimination process, said Larry Chiagouris, professor of marketing at Pace University.
"The stores that were weak have been weeded out, including chains like Borders," he said. "What we have left are the ones who figured out a good business model, like adding great customer service."
Many independents have benefited from Borders' 2011 bankruptcy (which was blamed in part on its expansion into outdated music and movie products) along with the buy-local movement, said Cullen at ABA.
But there's still concern.
"The economy is a worry," he said. "If consumers don't have enough discretionary spending for items like books, that can hurt independents."
And the resignation of Barnes & Noble's CEO last month could signal an increased emphasis on its stores, making it a bigger threat.
E-books are another challenge. They can be either an income source as a sales item or a major competitor as consumers download titles instead of buying hard copies.
About one in five books sold last year was an e-book, accounting for $3 billion of the $15 billion in total publishing revenues, according to the Association of American Publishers and the Book Industry Study Group.
Meanwhile, audio books are going through an explosive period, with sales up 21.8 percent last year from 2011, to $241 million. Amazon bought the biggest maker of audio books, Audible, in 2008 and has the lion's share of the market.
This comes as book sales are in general decline worldwide, with sales in the U.S. down 9.3 percent last year.
Independents hold just 10 percent of the overall book market compared with Barnes & Nobles's 20 percent and Amazon's 29 percent, according to the ABA.
"Independent bookstores won't get back to the high numbers they had some years ago," said Pace University's Chiagouris. "So they will have to keep changing to survive."
Reading the bottom line is the key to success in a competitive business, said McIntyre's Fitch.
"Back in the 1980s was an amazing time to be a bookseller," she said. "There wasn't the ruthless competition there is now. There were a lot of good stores that just couldn't make it.
"My advice for someone who wants to own a bookstore is: Do your homework," Fitch added. "Learn the business. Don't just do it because you love books."
(Source: CNBC, 08/09/13)
Daily Sales Tip: What To Do When Your Point Person Leaves
Every stage of a sales relationship can be tricky, but it's the time in between relationships that can be downright terrifying. What happens when the person you've spent time and effort establishing and cultivating a strong relationship with leaves the brand or company you've invested in? Luckily, there are steps you can take to keep relationships cruising even when individuals abandon ship.
The first step in the rebuilding process is understanding the departure of your point person. Reach out to the original contact to determine whether it was a friendly or hostile departure. If leaving the company was amicable, then you could ask the original contact if he/she would be willing to do a hand-off to the new contact.
If it wasn't a positive departure, then you might have to take some additional steps. Providing a few favors should not be out of the question. Let the company know that you're there to do anything you can to keep the transition as smooth as possible.
However, focus on favors of time and non-tangible items instead of tickets and other spiffs; save those until the relationship is further along in its rebuilding. Favors won't just help in the rebuilding process; they'll make you memorable. Work to send a clear signal that you are a significant -- and essential -- resource for the organization.
Once you've begun rebuilding the relationship, there are action steps you can take to maintain it. First, learn as much as you can about this new person through LinkedIn, Twitter, and other online resources. Then, reach out directly to the new point person. Try to set up a phone call or meeting to introduce yourself. Go ahead and send the person a handwritten note congratulating him or her and letting them know you're there to help in any way. Be patient for a response, as they'll likely be swamped at the start.
Once you're able to connect, make a point to understand the person's preferred method of communication. Just because the previous person liked face-to-face meetings doesn't mean the new person will. You might have to be willing to adapt in order to sustain your relationship with this new contact.
Growth is a huge part of the rebuilding process. A new contact gives you opportunities to present ideas the previous person may have shown no interest in or even turned down. You'll need to start over in educating this person about your product or service, but you can tailor this as informative, not sales-driven.
Try to interest this new point person in what your company does -- as well as your collaborative history with his organization -- as soon as possible so he/she sees this as a mutually beneficial relationship that needs to continue. Show them how you can add value to what they do.
Make a Statement
In the end, the departure of a key point person is the perfect opportunity to send a powerful message to the company that your relationship is more than just a connection between two people. You are there to provide value to the company as a whole. It also gives you the opportunity to form a new type of relationship -- one that's poised for not only stability but also for growth.
Source: Adam DeGraide, CEO and founder of retail consultancy Astonish