Selling Radio advertising can be a rewarding career both professionally and financially because you are helping build the American dream. Your customers are business owners who are pursuing their dream of building a business that will grow and prosper. As a Radio advertising sales person you can help them achieve those dreams by helping them find new customers and keep their advertising costs down.
The key to building a financially rewarding career in Radio sales is the active customer count, the number of businesses who are buying advertising in the current month.
Let’s be very clear about what the active customer count is. The active customer count is the number of advertisers that are spending money with you in the current month. The active customer account is the number of customers who are on the projection report for the current month.
Your active customer count is not the number of accounts on your list, it is the number of accounts spending money with you this month, right now. The number of active customers does not include new customers who are going to spend money with you in the future or have spent money with you in the past.
How many customers are spending money with you right now, in the current month? Do you know the number of your active customers exactly?
The most successful Radio advertising sales people can tell you the exact number of active customers they have on the air at any given moment because they understand the key to a financially successful career in Radio advertising sales is all about the number of active billing accounts.
How many billing accounts do you need to have on the air to earn the kind of money you want to earn? In this article, we will help you learn how to do the math for your own situation.
We are going to do the math that will help you determine how many billing customers you need to have on the air each month to reach your income goals.
First, start with the amount of income you want to earn. In our example, we have a sales person that wants to make $60,000 a year or approximately $5,000 a month.
You need to know the commission rate your Radio station pays for advertising sales. Many Radio stations pay 15% commission for local direct business and a lower rate for Advertising Agency sales. In our example we will assume the commission rate for Agency sales is 7.5 percent. If you will be working with both local direct and agency customers you should use 11.25 percent.
If you divide your target income of $5,000 by 11.25% you find that $44,444.44 is required in monthly sales to earn $5,000 in commissions. If you are using a calculator remember that 11.25% commission is input as .1125.
Find out from your Business Manager the amount of the average monthly order for your Radio station. In our example we will say the average monthly order is $1,900.00. Divide $44,444 by $1,900 and the answer is 23.39 customers.
In our example, if you want to make $5,000 a month you need 23.39 billing customers every month.
Here is the example with the formula you need for a spreadsheet or calculator.
|
Desired Income |
Average Commission |
Formula |
Number of Accounts |
|
$5,000 |
11.25% |
5500 / .1125 |
23.39 |
Now you know how many billing accounts you need on the air every month to earn the amount of money you would like to make.