Pandora, Radio & The New CX

April 10, 2012
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In today’s post, Paul Jacobs takes a hard look at a recent Radio Ink interview with the owner of a New Jersey car dealership – his views about advertising on radio and why he’s shifted his dollars to Pandora.

In 1990, United Airlines ran a memorable TV commercial that featured a CEO convening a meeting with his entire sales staff.  He explained how the company had just been fired by one of its oldest customers, and pointed out that his sellers were relying too much on “a phone call and a fax” (OK, it was 1990) instead of more direct forms of communication and marketing.   He then handed out plane tickets so his reps could pay a personal, face-to-face visit to all of their key clients.

>EMAIL RECIPIENTS: CLICK HERE TO WATCH UNITED AIRLINES TV COMMERCIAL<

It’s a classic ad regardless of the decade because the lesson is that there’s no substitute for direct, honest conversation and collaboration with the companies and clients you do business with.  The “money line” in the ad asks a powerful question:

“If you’re the kind of business that believes that personal service deserves a lot more than lip service, welcome to United.”

That’s not really an airline positioning statement; instead, it is a corporate core value.  Shouldn’t this be the marketing posture of your radio station, cluster, or company?

Last week, Radio Ink posted an audio interview with the owner of a New Jersey car dealership, William Feinstein of Planet Honda, who has shifted his dollars out of radio and over to Pandora.  Now I know what you’re thinking – another pro-Pandora/radio sucks blog post.  But no, that’s not what this is about.  I urge you to spend a few minutes, listen to the interview (linked above), and then consider what he’s really saying about radio and Pandora – and selling cars.

Radio Ink will probably get some blowback for featuring this interview, but they have done the industry a favor.  We don’t know Feinstein or how much he represents the mindset of local advertisers everywhere, but it’s obvious that he has spent a considerable amount of money on radio over the years.  He is sending the radio industry a message – if we care enough to listen.

In the interview, Feinstein lauds Pandora because it has changed the way that he buys and thinks about media.  With Pandora, he doesn’t need to buy dayparts, because he’s buying specific consumers.  He talks about how Pandora is accountable and trackable, and how it allows him to control not only the number of times a listener hears his ads but how he can geo-locate the reach of his campaigns down to the county.  Since his dealership is 15 miles outside of New York City, he points out that he’s been forced to pay New York City ad rates since his market is in a more compressed area in New Jersey.  And as he explains, he’s tired of paying for wasted audience.

But if you really listen to what he’s saying, this interview goes beyond the technical differences between buying broadcast radio and Pandora.   In fact, it is less about Pandora’s assets, and more about the way that radio has let him down.  The essence of Feinstein’s complaints about radio focus on how he has been treated by reps over the years – in contrast to the service he’s receiving from Pandora.

For some time now, we have talked about CX – the customer experience.  I would strongly suggest radio could help itself by redefining CX to mean the “client experience.”  Radio no longer owns a segment of the advertising market.  There is competition and it’s viable.  Improving the “client experience” is something that radio station sales staffs need to embrace in the face of changing advertiser attitudes as hot new media options proliferate.

In the Radio Ink interview, Feinstein talks about the attentiveness, caring, and honesty he receives from Pandora – elements that he alludes to are in short supply from the radio stations he’s been accustomed to dealing with.

While it’s easy to take a single car dealer’s complaints and write it off as just one guy’s opinion, I would urge you to dig deeper into the larger lessons because many of his concerns are correctable:

  1. He needs metrics that matter.  Feinstein takes radio to task for the lack of granularity and flexibility that exist in ratings “estimates,” especially compared to the specifics he’s getting from Pandora.  While this is a challenge that could be difficult for radio to address, he points out that he’s worked closely with Pandora to figure out the best metrics model for him.  They didn’t provide a one-size-fits-all approach.  Instead, they spent the time to learn his needs and craft a solution.  Conversely, with radio, he complains that he never gets a “straight answer,” and is often confused by station audience claims.
  2. He needs to know the truth about both radio’s and Pandora’s strengths and weaknesses.  False assumptions about radio’s alleged weaknesses have been allowed to become fact.  He perceives radio as a background medium, while he believes that Pandora holds the user’s attention.  While he talks about the visual reinforcement that is part of his Pandora campaign, he somehow doesn’t account for the fact that many of its listeners minimize the player or when listening on mobile, the screen goes dark.  This suggests that radio reps have focused on their priorities – ramping up share by dropping rates or bad-mouthing the competition rather than aggressively reinforcing the medium’s benefits to him as an advertiser.
  3. He needs to be reminded of radio’s primary strengths and assets in terms that benefit his business.  Throughout the interview, Feinstein points out what radio doesn’t provide – geographic focus without the waste.  And he complains about radio’s inflexible ad model based on ratings and dayparts.  But what is truly unspoken but prevalent throughout is the sense that radio’s primary goal is to get his dollars while Pandora’s is to sell his cars.
  4. He needs to know that radio has a stake in his company’s success.  Given the chance to compare experiences, Feinstein truly believes that Pandora cares, all the way to the corner office.  It’s clear when listening to this interview that Pandora has won him over through a combination of his infatuation with their product (which never hurts), a collaborative sales approach (note:  his Pandora rep used to work at Clear Channel), and a flexible technology and metrics that fit his needs.  But the defining moment of this interview comes at the end when he talks about a meeting at a Pandora cocktail party where Tim Westergren took an active interest in how his Pandora campaign was working.  Feinstein even offered up a suggestion about ways that Pandora could improve its service.  His conclusion?  Pandora is invested in creating a better marketing product, helping him succeed, and shooting straight with him, even when they don’t have all the answers.  By implication, radio falls short in these areas.  You get the sense he’s telling this story to a lot of his colleagues just as he enthusiastically told it to Radio Ink.  It’s great word-of-mouth that reinforces Pandora’s value while positioning radio as dated and out of touch with his business.

Yet, despite the fact that Feinstein has shifted his ad dollars to Pandora, and just signed a 12-month contract, he has outlined the framework of a solution for radio.  In this case, radio’s failure has less to do with technical issues that make Pandora different from broadcast stations.  It has little to do with radio’s main assets – cume, personalities, promotions, and integration.  And it has nothing to do with a lack of knowledge of his market.

It has everything to do with service, approach, and caring – the essence of the CX – or “client experience.”

To serve its customers, radio reps need to understand that it’s not about them.  It’s not about whether they got on the buy.  It’s not about how they’re ahead of the other guy’s cluster in Miller Kaplan.  It’s about the client.  When we help make them successful, we’re successful.

This isn’t about the ability to skip songs, play fewer commercials, or be available on laptops, tablets, and phones.  It’s about caring about the client, taking an interest in her business, and helping her reach her goals by providing marketing plans that are tailored to individual needs.

Radio has to achieve client engagement from the top, middle, and bottom rungs of the organizational ladder.  The most painful part of the interview with Feinstein is when he talks about meeting Tim Westergren.  It’s not that he’s star-struck – it’s that Tim listened, engaged, collaborated, and showed an honest interest in helping his business succeed.

The United commercial ends with the CEO “getting on a plane to go visit our oldest client who fired us this morning.”  There is no reason why radio should find itself in a similar position.  Radio’s corporate heads are bright, articulate spokespeople.  But now more than ever, they need to be engaged with the clients, sponsors, and key businesses that are now faced with myriad decisions about marketing their products.  They need to do more than make rah-rah speeches about radio’s reach, longevity, and tradition, and actually work with clients to understand their needs in a challenging economy, and provide commitments to create integrated solutions that sell cars, put butts in seats, and people in stores.

Pandora is essentially a one-dimensional product.  It’s an audio stream.  Broadcast radio has multiple assets and tools, from the database (which can target geographically, right down to favorite car brands) to podcasts to live and local personalities to on-site promotions that can all be connected to reap results for a guy like Feinstein.

Do radio’s major local personalities truly know local clients, go out on sales calls, and have presence at the agencies?  They are human resources that Pandora cannot match, but too many DJs continue to work within job descriptions that were devised in the ‘60s.  The role of the personality needs to be redefined to derive marketing benefits that can bring value to key local and national clients.

And finally, are radio AEs relying on email, texts, rankers, and rates at the exclusion of creating client engagement and collaboration?  Are “solutions” defined as bonus spots, tossing in the lame low-rated FM station in the cluster, or offering a live read or remote?  Do these tactics solve client problems or are they Ginsu knife add-ons that only cheapen the brand?  (“But wait – there’s more!””

Feinstein’s (pictured) comments about his experiences with radio reps should cause every LSM, GSM, DOS, and CEO reading this to re-think how local sales reps are interfacing with clients and providing service and solutions.

Radio cannot control Pandora and its mission.  But radio can take a critical assessment of its own approach and take some lessons from Pandora, as well as the myriad other competitors like Groupon and Google that are focusing on the local sales environment.  They are offering something that’s not only bright and shiny, but is in-sync with what local advertisers want.

Yet, too many radio stations are utilizing 1980’s sales techniques and tactics – too focused on ratings, cost-efficiency, market share, and yes, making the false assumptions that radio will always own a share of the ad budget, and that the competition is the cluster across the street.

Forget about the propaganda you hear at radio conventions and read in the trades.  Pandora is a major competitor.  So is Groupon, Living Social, Google, Facebook, local cable television, newspapers, and others.

But all of these digital innovations and media have their strengths and weaknesses.  And radio does, too.  It’s time to stop being defensive about Pandora (just like how the industry played it with satellite radio).  It’s time to create a coherent, collaborative, and contemporary sales marketing approach that fits a client’s needs in 2012, not 1990.  It’s time to stop arguing about whether Pandora is “radio.”

You can call Pandora whatever you want.  I call them an opportunity to step up, take a critical look in the mirror, focus on our CX, and strap it on.  Because if we don’t, we’re going to hear from a lot more William Feinsteins.

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15 Responses to Pandora, Radio & The New CX

  1. Michael Dalfozo on April 10, 2012 at 7:13 AM

    Paul,
    You hit this issue dead center. It is time for radio to stop trying to convince itself that Pandora isn’t radio. Looks like a duck, quacks like a duck and sells to your advertisers…Hmmm must be a duck, or at least a competitor just like Satellite, iPods, TV and all of the other media choices todays consumer has. Radio needs to get back to its roots and remember what it was like “in the old days” when relationships with advertisers mattered more than station rank. When our AE’s knew and spent time with clients learning about their business and figuring out ways to help them grow their business.
    Let’s also not forget that radio can compete head-to-head with Pandora using our digital assets to get-target listeners, provide real metrics that clients can understand, and deliver real, trackable results. The tools are there, we just have to stop complaining and join the digital revolution and provide some of that good old fashioned service and attention that our clients are asking for.

    • Paul Jacobs
      Paul Jacobs on April 10, 2012 at 8:00 AM

      Thanks for the thoughts, Michael. The challenge with digital is the tendency to treat it as a foreign object because it doesn’t fit the usual construct that sellers are used to. So, when the clients start thinking about new digital solutions, radio (despite having many of the same assets) is out of position because we aren’t always engaged in the right conversation. We’re busy bonusing the weakest station in the cluster or throwing in live reads instead of actually listening to what the client needs and having the resources and knowledge to deliver.
      This isn’t brain surgery (that’s why I’m in it), and that’s why the United ad is so instructive – there are basic principles about selling that are always effective but not always implemented. Hopefully this post will shake things up a bit.

  2. Michael Doyle on April 10, 2012 at 8:43 AM

    Paul,

    I agree that the Client Experience is key. I’ve been saying it for years. Maybe I learned it from you.

    However, I think you are painting all radio sales people with a broad brush of a bad CX, when many of our best reps provide outstanding ideas, solutions, and great customer service. I could name dozens right now.

    Are you right about the tendency to see Radio as a wholesale business about ratings and low rates? You are. But the best radio people see it as a Customer Service Business.

    Is this new? It is not. Pandora is just another of the dozens of competitors who see what RADIO has, relationships with local advertisers that generate revenue, and they want it. Pandora, Groupon, Living Social, Google and dozens of other competitors that did not exist a decade ago want our local relationships and the dollars associated with them.

    Great Radio companies,and great radio people are already on the wall, standing up to the competitive threat, and providing ideas, solutions and results.

    I would think you could also talk a little about the people who are doing it right. After all, doesn’t positive support about your Point of View also provide a road map for others to follow?

    We don’t always have to be negative about our business to make the point.

    • Paul Jacobs
      Paul Jacobs on April 10, 2012 at 8:53 AM

      Mike – great points and a valuable perspective. My experience is that around 2-in-10 salespeople truly get it, whether it’s selling NTR, digital, or true customer service and relationships. So yes, there are some good things being done out there and we see them every day. They should be noted and applauded.
      Which leads me to the larger point – is the radio industry overall doing what is necessary to build this culture, reinforce the brand, and ensure that all local and national advertisers recognize what you point out? My point is that the industry needs a much bolder strategy that permeates through all companies, to the AEs, and out to the clients.
      This is an important conversation and I value your input. Let’s keep the discussion going and maybe we’ll continue to move the boulder formward.

    • Fred Jacobs
      Fred Jacobs on April 10, 2012 at 9:09 AM

      Michael, here’s the view from the programming guy…

      This is more about the recognition that the competition isn’t just Z93 and The Bear. Sales staffs (and PDs, too) often get myopic. After all, they’re paid to focus on the challenge at hand – sales goals, Miller Kaplan ranks, Arbitron ratings. But our competitive world is rapidly shifting, and the Radio Ink piece provides us a glimpse of where we are headed, IF radio doesn’t devote a greater focus and more energy to creating that true CX, we’re headed for trouble. I interface with salespeople a lot, and while there are notable exceptions, too many seem unprepared for the new challenges at hand, have a poor handle on the digital realities, and aren’t being properly trained to solve client problems.

      Denial is the chief enemy that has plagued traditional media during the digital age, and Paul speaks to that issue in his post. We have never been more challenged as an industry as we are today, so it is easy to construe his comments as negative. In fact, they’re provocative, passionate, and challenging. There has been no greater champion for radio (and radio sales) over the past two decades than him.

      I would love to showcase salespeople and managers with great stories to tell who are providing excellent client service in the face of new digital competition. And I hope we hear from them along the way. I truly appreciate you responding and getting this conversation going & would love to showcase some positive sales efforts and initiatives.

  3. Dave Beasing on April 10, 2012 at 4:43 PM

    Radio’s tendency will be to argue with someone’s reasons to buy Pandora. That will save a few accounts.

    More importantly, let’s listen carefully to what advertisers perceive as radio’s strengths and weaknesses. If we don’t, someone will. This isn’t about Pandora.

    • Fred Jacobs
      Fred Jacobs on April 10, 2012 at 4:47 PM

      No, it’s not. We have to listen. This is about OUR service to clients. Thanks, as always, Dave for your perspective.

  4. Stuart J. Sharpe on April 11, 2012 at 5:14 PM

    This isn’t just a “Pandora problem, or a Radio problem.”

    How many “customer/prospect focused” salespeople have you encountered in everyday life in the last week, for example? What’s the percentage among real estate salespeople, copier salespeople, automobile salespeople, office supply salespeople, restaurant servers…the list could go on and on?

    That there are so few really good salespeople is an opportunity for those who learn how to get inside the head of prospects, determine what it will take for them to buy, and are able to execute to meet or exceed expectations.

    Paul’s article is one of the most articulate prescriptions I’ve read for competing effectively in today’s media marketplace and growing a Radio company’s sales. I’ll make sure everyone in our firm reads this blog.

    • Fred Jacobs
      Fred Jacobs on April 11, 2012 at 6:25 PM

      Stuart, I know Paul will have a comment, too. We appreciate your thoughts and taking the time to chime in. The bar is being raised everywhere and consumers are making judgements every day. Thanks.

    • Paul Jacobs
      Paul Jacobs on April 11, 2012 at 8:09 PM

      Stuart, thanks for the kind words. Obviously I agree with them.

      Many years ago I was the GM of a station in Detroit. We were doing well, but I felt things were getting stale. We were too reliant on our ratings and were just cruising along. I felt the only questions our sellers were asking were “What’s your budget?” and What’s the cost-per-point?”

      So one day I came into a sales meeting and asked each seller to write down their largest, most important client. Names like McDonald’s and Budweiser were on the list. I then told them that they were to contact the client – not the agency – and tell them that they were to go to work for them. That’s right, flip burgers at a McDonald’s and deliver beer from the back of a truck. I don’t have to tell you the reaction I got from the salespeople.

      The clients loved it. They had never before heard anything like this, and they were all impressed. And ultimately, our sellers grudgingly admitted that they also learned a significant amount from their clients. They actually began to see the world through their client’s eyes. They understood more about their client’s customers. And for many years afterwards, these clients would bring up this exercise to me.

      Selling isn’t hard. Solving problems isn’t either. The problem is that with an over-reliance on metrics and media buyers, we’ve limited the scope of our potential. This isn’t about ratings. This isn’t about clients having a “radio budget.” This is about car dealers who want to sell cars and restaurants wanting to sell food. They are looking for effective ways of reaching consumers, and they will spend money on any provider – including good old radio – who can demonstrate that they have the solution.

      Thanks for joining this important conversation. I look forward to keeping it going and I thank the unbelievable amount of people who read this post and responded.

  5. Bob Bellin on April 12, 2012 at 1:21 PM

    Sorry I’m late to the party on this. Paul, this was a great post.

    Radio is focused too much on telling its story better, rather than telling it’s customer’s story better. If radio had packaged its strengths into a customer focused plan for this guy, they likely would have kept a big portion if not all of his budget.

    I think a big part of the problem is radio’s non-compete/lower commission every year/raise the budget at the last minute after the seller made their bonus culture. Why would anyone with real consultative sales skills/orientation choose that career environment?

    Good, career consultative sales people are rare and at a premium. They will gravitate to where they can polish their craft,learn grow and be compensated for their success. Does radio’s sales system/culture honestly offer that anymore?

    • Paul Jacobs
      Paul Jacobs on April 12, 2012 at 2:18 PM

      Consultative selling is great, especially when sellers have the tools, and that’s what’s not connecting frequently enough, unfortunately. Many radio companies and stations have created some great digital channels – where it falls apart too often is when the AE is with the client and doesn’t connect these assets to solve the client’s problem.

      It’s a process, right? There are some success stories out there. WTOP’s digital revenue that came out today is a case in point, and I’m aware of others. But in an industry where the core revenue is basically flat, it doesn’t take a rocket scientist (and I’m certainly not one) to see where the growth potential is, and where the client need is.

      • Bob Bellin on April 12, 2012 at 3:13 PM

        In a lot of cases the digital channels don’t bring enough audience to have much impact, although in cases like WTOP where they do, digital can bring a lot to an advertiser.

        Big companies with significant traditional verticals could combine them in ways that could work wonders for solving client challenges and companies without those verticals could forge alliances that would create them.

        I would maintain that if radio’s sellers practiced what you preached here, that revenue might be up and not flat.

        • Fred Jacobs
          Fred Jacobs on April 12, 2012 at 4:41 PM

          Bob, programming guy here: Many radio stations have more digital assets and solid metrics that are typically sold or marketed. Because traditional spots have become the primary currency of most AE’s, some of these other tools and channels simply go unused even though their integration could contribute to benefitting the client. I believe that you and Paul have it right – Pandora is a stream – most solidy programmed radio stations have multiple assets that could truly solve client problems, making radio a more powerful medium. This goes beyond having a spot sales goal and a digital goal. It’s not either/or. Thanks for your point of view and for taking the time.

  6. spotmagicsolis on October 20, 2014 at 1:34 AM

    We are doing this for all of radio. Join us to combat the radio wanna-bes :)

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