Bonuses, Added Value, and Other Ridiculous Demands

Somewhere in the annals of history, there is one single person at some media company responsible for accepting the first order where a client asked for bonus commercials or some sort of added value in exchange for placing an order.  That person, by accepting that order, set up a precedent that many media companies now live by – which is to get, attract and retain customers we must give away a percentage of our inventory as a bonus or added value.  That theory says the product didn’t have value to begin with, and we couldn’t just sell it on its merit.  We literally have been doing ourselves a disservice ever since.  If I ever invent time travel or Dr. Emmett Brown shows up at my door with a time machine disguised as a DeLorean, I am going back to the magical date and punching that person in the face, hard. 

One of the most egregious asks I ever received was while working in Texas.  I had received a request from a chain of liquor stores.  They were looking to place advertising on my radio stations but to do so they required 3 free placements for every one purchased.    This was not only appalling but also insulting; as if my top radio stations weren’t enough, they wanted to pay 25% of its value – and I was supposed to be ok with that request.  Fat chance.  I picked up the phone, called the buyer, and had this conversation. “I received your request and notice that you would like 3 free commercials for everyone one you purchase, is that correct?”  The buyer on the other end responded with, “Yes, that is our policy.”  My nest question, “let me ask you, would you give me the same deal at your place, today, because I am going shopping later – I want three free bottles for everyone one I buy!”  The buyer, plain as day said, “it doesn't work that way, sir.”  I told the buyer, “It damn well better.”  We did not do business together.  But later that week I heard their advertisements on some of my competitors, so I know they took the dirty deal.  Sorry, I won’t. 

What happened to clean business.  I am quite sure that nowhere in America can you get the kind of deal that companies, media buyers, and agencies try to get us to agree to in exchange for buying our services.  First, they want to tell you the rate you are charging is too high, then they want to dilute the purchase by telling you their lower rate that is trying to grind you to is not enough and they have to have bonuses or added value to get the deal done.  I am sure I have taken some ugly business in my time, but not anymore.  I am worth more than that – I have a value and that value allows just to walk away when the deal is too ugly.  In fact, I have gotten to the point where I respond to ridiculous demands in kind.   I know there is no chance we are going to do business together, not at that rate and not with those additional stringers.  So, why not have a little fun with it.

Several weeks ago, I received such a request from a media buyer at an unnamed ad agency. It read: “I have spoken with the client and like to run a test run on station XXXX. We have a ‘limited budget’ to test the waters and like you to put together a proposal for me. We have $XXXX gross and like to see what we can do for a 4-week run. The client likes to focus on mid-day and the PM drive areas for the paid stuff but for bonus spots, she is open to other options. It is not much but it is a starting point, see what the best is you can do for me so we can start next week.” When I finished laughing, I thought about and ran the numbers on what they could purchase with the money allotted. And then just responded in kind. My response “Here is what we can do with such a limited budget – we can get you 15 commercials: 60’s a week in either Mid-Day or Afternoon Drive.   I would suggest PM drive; it has a slightly bigger audience. We don’t do much with bonuses. We don’t have too many clients that give me bonuses for anything we buy from them, so we just stay out of that entirely. I am on vacation next week.  I have copied our director of sales; please reach out to him if you would like to proceed.  He can get your new customer information and get you set up in our system. Then we can get everything loaded to start next Monday.”

I figured at that point, this exchange was over, and I would never hear from that buyer again. But, no …I got indignation and bluster as a response. Here was the response, “Your response caught me off guard because over my 20 years in the business and dealing throughout the US in general, I never came across a situation like this, everyone has a "rate sheet" which is for planning purposes as a starting point and to help new clients with bonuses is a very common thing. So, when you send me a proposal that goes by the rate sheet and dismisses the bonus it surprises me even more. Now, if you don't negotiate your purchases from third parties it is really shocking, so let me help you next time you are shopping. I do understand it is a small budget and that is why we need a good partner to help us succeed and make the budget grow, so I would rather wait for your return to explore any options, what do you say.”  

There are many things wrong with this response, and this buyer obviously has never dealt with me before.  One – generalizing that we are the only station group that objects to ridiculous demands.  I am sure there are a few others, but I consider it a badge of honor that we try to run a clean business.  The buyer seemed shocked that we would not take his anemic budget request and try to stretch that into more – as if I could go into the butcher shop, tell them I want the $30.00 T-bone, but by the way I only have 10 bucks – but if you give me the T-bone this time, maybe my budget can grow to $20 next time.  Never going to happen.  Whatever bad deal we accept now will become the new norm.  If we give them anything extra, it will always be expected.  Which I why I refuse on the upfront.  The last part really made me laugh, using the words good partner.  A good partner would do good, clean business.  What this buyer really wants is a lackey that will do whatever they want to get the business.  We are in a very different position and don’t need to do that, sorry pal.

So now I want to have a little fun with my new friend. My response: “I am sorry you have had such poor experiences with fellow broadcasters.  I can assure you buying our radio station effectively would not cause you to have to ask for bonuses and free additional weighting to make your schedules work for your client.  I have been running radio stations/TV stations for 30 years.  I have been successful precisely because I do not give away the inventory.  Inventory is finite and should be treated as such.   It is not my responsibility to make our product work for those that cannot afford it.  It is my responsibility to sell campaigns that are adequate to be successful.  On station XXXX right now, I would be in the 30-35 commercial a week range, if I wanted to give it the ‘true test’ of what it can do for your client.  

In our world, advertising only fails for three reasons. 1) terrible message, 2) mismatched audience or 3) inadequate frequency. 9 times out of 10 the third reason is the cause. People in our position have accepted orders with inadequate frequency to be effective. We have taken the opposite approach. What we are doing is looking at every customer and recommending an adequate amount to accomplish the goal. That is how we run our radio stations, as a business. There is no other business on the planet that gives away its product. The idea that because a client can’t afford to buy what is effective means we should make up the difference with bonus weight is the reason most radio stations have trouble paying the light bill and must agree to terms that are unfavorable. What we are proposing is an equitable exchange of access to our audience for the prevailing rate for the daypart.

If you went to a tire shop and wanted my best tires, but could only buy 3 of them would you expect the store to bonus the other one?  No, that store would expect to be paid, and you would expect to have to pay for all 4 tires. You may not agree, and it may not be what everyone else does – but we are in a unique position to not have to follow the herd.  If you would like to wait until I return, that is fine.  I will be back in one week however, my position on what we are willing to do and not willing to do will not have changed.  If you would like to book your schedule as advertised, please connect our director of sales – I am sure he can help.”

Now I am one hundred percent certain I will never hear from this person, again, and I am ok with that.  Taking ugly business like this sets a precedent and a ceilinged threshold we could never overcome.  The customer is offering about 40% of the value of what they would need to do to ‘test’ the station.  But the simple fact is, my station, your station and the station across the street are not on trial.  They work, and they work for the hundreds of customers you have now that are having success working with you. 

Don’t be fooled or lured into the idea that you have done the unthinkable just because someone is waving a carrot of more in front of your face.  That carrot is a façade.  It will never appear in its true form, in fact, that buyer is going to try to cut the number just as soon as it is placed and then expect you to make up the difference.  We have a choice in every sales conversation and every negotiation.  Make sure you are making the right, long-term choice rather than falling for the promise of greater riches by being a “good partner.”  I know I was born at night, but it wasn’t last night – beware bonuses, added value, and other ridiculous demands.  Always ask if you can get the same deal at their place.  This works more times than it doesn’t.