To Sell In Combo Or Not Essay — страница 3

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out of balance was because the commission rates had been based on the stations’ budgets, which had seemed reasonable at the time. Ed and the previous general manager decided the solution to the problem was to hire a local sales manager for KRQO who had some expertise in direct, retail selling and to split the staff. They felt that pursuing direct, retail business was the best strategy, because the KRQO couldn’t compete effectively at the agencies for 25- 54 business, and with most of KRQO’s numbers being 44+, the salespeople couldn’t sell very much on a combo with The Z. They also decided to have one salesperson from each staff call on agencies and clients, and when a buy was up, to have the two salespeople work together and make a joint sales presentation to get both

stations on the buy. They offered a twenty-percent discount on both station’s rates if a buyer would by an equal schedule on both stations. Ed hired Oscar, who had a good track record of increasing direct, retail business at a station in another top-ten market, and Ed split the sales staff. Ed actually hired Oscar the week after Tyler Saunders joined the station as general manager. Ed gave Oscar three of his better, more experienced salespeople–the ones that he felt were more adept at direct selling. When Ed made out the budgets for the two stations, he worked painfully through a number of scenarios. He looked at billing figures going back several years for the combo. He looked at rates for each station and the number of combo buys that they had gotten. He looked at the

current ratings for the two stations. Finally, he came up with a sixty-forty revenue split, based on his estimate of what the two stations could bill–about sixty percent of the total would come from The Z, and about forty percent would come from KRQO. When he and Tyler, who had just been on the job for two weeks, made their budget presentation to corporate, the top brass agreed that the budget projections for the two stations were reasonable, and the numbers were locked in. Now, nine months later, Ed knew the numbers were out of whack. The Z was sailing along way ahead of budget and ahead of last year. KRQO was impossibly behind budget and expectations. The system of making cooperative presentations was not working well. Oscar was so highly competitive with Olivia that he’d

insist that the KRQO people go after an unrealistically high share of the budget. In fact, there was virtual warfare between the two staffs, much to Ed’s dismay. But was it Oscar’s fault or the fault of poor budgeting? In either case, “What do I do now?” Ed thought as he looked out at the setting September sun. “Do I admit I made a mistake and fire Oscar?” “If I fire Oscar, do I hire another local sales manager and keep the staffs split, or do I go back to one staff selling combo.” “Oscar is a good closer; do I keep him and let him and a couple of retail people report to me and have them sell only KRQO, and have the rest of the staff sell a combo with realistic, appropriate rates for both stations?” “Do I fire Oscar and several salespeople, and then have a

nine- or ten-person staff sell only a realistically priced combo (understanding that most of the remaining salespeople used to give away KRQO for ten percent extra and don’t know how to sell its specialized format)?” “How do I establish a budget for next year for each station or both stations in combo?” “What is the best compensation system, and is the one I’m using now fair?” “What comes first, structuring the sales department(s) realistically or backing into the budgets I know I’ll be facing (corporate always wants ten percent more, regardless)?” Ed hated backing into budgets. He remembered several years ago when the company was under severe pressure from bankers, that he had to back into some pretty ridiculous budgets. As Ed looked out of the window over

the setting September sun, he decided to hire a consultant from the Marketing Communication Group, a consulting and sales training organization he had dealt with in the past. Ed had formed an outline in his mind of what he thought was the optimum solution, but he felt he needed an objective, knowledgeable outside opinion. He picked up the phone and left word for the consultant to call him. AUTHOR’S NOTE While the incidents in this case are not factual, they do represent a composite of real situations and common industry practices. The case was prepared to use as a teaching tool. As we discussed, Oscar is a real problem. Morale on the KRQO staff appears to be quite low. There is a perception among both staffs that he is unfair and shows decided favoritism to one person–for no