Cost Per Point

It seems to happen any time I get together with other broadcasters. We spend part of our time talking about what the business was like years ago and what it will take to bring it back. We also bring up those two four letter words that apparently didn’t make it onto George Carlin’s list of “ten words you can’t say on radio or TV”… Arbitron! Of course the biggest issue is how or even why we sell with a product that is inaccurate, rather than consider whether a station works for a client instead of just delivering numbers!!!!

Here’s something that I found/used years ago to best describe the problem of how our product is being bought by the largest spenders;

One day a customer walked into the showroom of a Lexus dealership.

"Hi, I'm interested in purchasing a Lexus."

"Well, you're making an excellent choice,” the salesperson replied enthusiastically. "Is there a particular model you have in mind?"

"Yes," said the customer. "I would like a Lexus 400 at a $6 CPP.

"I'm sorry," said the salesperson, "Did you say CPP"?

"Yes," replied the customer. "You see, it’s a very simple formula; I took the cost of a four-door Chevrolet and divided it by its weight. Based on 4000 pounds, I came up with a $6 Cost Per Pound."

"That's a novel way of pricing a car", the salesperson replied, "but don't you think that style, performance, and quality need to be considered? Not to mention how it's going to be used and who will be driving it?"

"But those things don't matter to me," said the customer. "You see, I'm a professional buyer and I won't be actually driving the car. I'm here on behalf of your customer, whom I told I could buy a car at $6 Cost Per Pound. I really don't care about quality or features, I'm just here to negotiate price."

"Perhaps you might want to consider a Toyota," the salesperson said. "Your customer won't be getting the Lexus they actually wanted, but I'm sure we'll find something that fits your pricing criteria."

"That sounds fine," replied the buyer. "After all, a car is a car as far as I'm concerned. The cheaper the better. Oh, by the way, whomever I buy the car from needs to give me a year's supply of gas-for added value, if you know what I mean."

"On second thought, may I suggest that you have your customer come in to experience the Lexus for himself, and in the meantime, you may want to see one of our used car salespeople. They have automobiles that would meet your need to find the lowest possible price. It's a used Yugo."

Next time one of your clients tells you they make their advertising decisions “by the numbers,” tell them this story and let them know which numbers are really important… the number of customers who buy product in their store, or just the numbers based on a few potential radio station “listeners” during any given day part.

If you don’t no one else will.