Smart Inventory Management

1. Smart Inventory Management Kirk Nelson, CRMC Vice President, Sales & Marketing

2. Sound Familiar? • I always have tons of inventory… • I have plenty of inventory, but Morning Edition is always sold out… • Our rates in morning and afternoon drive are FANTASTIC, and we still have tons of inventory left to sell…

3. My drive time inventory is sold out, but I’ve got tons in midday, evenings and weekends… • There are certain shows on the weekend where inventory always seems to be sold out, like Car Talk and A Prairie Home Companion, but nobody seems to want to buy the other programs… • We are sold out for the next six weeks…

4. I’m only selling about 60% of my stations drive times, and only 25% of all the other dayparts… • I’m doing a great job selling out my stations inventory, but I still haven’t made budget. I need more inventory…! • What’s the point ?

5. YOUR INVENTORY DEMAND IS A DIRECT REFLECTION OF HOW YOU ARE SELLING UNDERWRITING

7. Inventory Management Approach • Set Up Reports • Look for Stories • Create a Sales Strategy • Monitor Sales Behavior • Evaluate Results • Make Adjustments

8. Traffic Report Set-Up • Avails Report • Average Unit Rate report • Billing History - Scheduled • Billing Projection – Contracted • Conflict Codes - Category Report • Aged Receivables

9. Critical Point Your inventory should always be a reflection of your revenue

10. Look For Stories • The obvious: • Tons of inventory? • Disproportionate use of drive times? • Weak selling periods? • Sold out for next 8 weeks? • Some weekend shows sold out? • Selling Morning Edition as daypart?

11. Not so Obvious: • Rate averaging over schedule? • Soft major categories? • Categories our revenue comes from? • Too much billing from too few accounts? • Too many small underwriters? • Not attaching revenue to inventory?

12. Create A Sales Strategy Four Guiding Principles • Grid Theory • Locomotive Theory • Belief System • Pricing Philosophy

13. Principle One

14. Principle Two

15. Principle Three

16. Principle Four The theory of supply and demand describes how prices vary as a result of a balance between product availability at each price (supply) and the desires of those with purchasing power at each price (demand). Alfred Marshall

17. Create a Sales Strategy

18. Three Common Themes • Tons of extra inventory - December & January • Business soft during Summer • Disproportionate use of drive times

19. Strategy Number One Situation: lack of demand Dec/Jan Solution:“Thank You” • December 5 - evaluate inventory • Available late December – early January • Sales offering • Prior year underwriters only • Make it physical • Track daily

20. Strategy Number Two Situation: Soft Summer Solution: Summer offering • Tiered discounts • Plans limited to 13 weeks • Provided incentives

21. Strategy Number Three Situation: Buying only Morning Edition Solution: Retailers Kit Four marketing legs • Web page • Station promos • Underwriting credits • Static window sticker

22. Monitor Sales Behavior Weekly Behavior • Order Entry • Schedule inventory expectations • Rates assigned to inventory • Rate alignment with expected standards • Proper coding • Presentations • Amount of ask (share or rate) • Negotiation outside of standards • Pending Business

23. Monitor Sales Behavior Monthly Behavior • Projections • Pacing • Average unit rate by daypart • Percent of inventory sold by daypart • Expected growth by rep experience • Entry level • Experienced • Seasoned

24. Evaluate Results Based on your sales strategy • Met or exceed budget expectations • Collections pacing with revenue • Average AR report • Increase sell of spread • +/- AUR • Increase unit count per month • Average spending by account • Revenue growth by rep

25. Make Adjustments

26. Basic Adjustments Situation: I always have tons of inventory… Adjustment: • Reduce your rate structure • Promote packaging • Hire more sales reps

27. Situation: I have plenty of inventory, but Morning Edition is always sold out… Adjustment: • Increase morning drive rates • Expand Daypart to 5A-10A • Offer bundled price reduction plans

28. Situation: Our rates in morning and afternoon drive are FANTASTIC, and we still have tons of inventory left to sell… Adjustment: • Reduce your rates to coincide with inventory demand • Package more inventory together

29. Situation: My drive time inventory is sold out, but I’ve got tons in midday, evenings and weekends… Adjustment: Adjustment: • Increase morning drive rates • Offer bundled price reduction plans

30. Situation: There are certain shows on the weekend where inventory always seems to be sold out, like Car Talk and A Prairie Home Companion, but nobody seems to want to buy the other programs… Adjustment: Create a Car Talk (or whatever) package

31. Situation: We are sold out for the next six weeks… Adjustment: Raise your rates!

32. Situation: I’m only selling about 60% of my stations drive times, and only 25% of all the other dayparts… Adjustment: • Maintain rate card • Bundle inventory at uniform levels

33. Situation: I’m doing a great job selling out my stations inventory, but I still haven’t made budget. I need more inventory…! Adjustment: • Evaluate inventory • Adjust rates

34. Inventory Management Approach • Set Up Reports • Look for Stories • Create a Sales Strategy • Monitor Sales Behavior • Evaluate Results • Make Adjustments

35. Final Thought Let your pricing system work for you • Specific program purchase • Long term discounts • Contract length • Non-profit rate approach • Priority codes • Packages promoting SHARE • Exceptions

36. ?? Questions ?? Kirk Nelson, CRMC Vice President, Sales & Marketing