Over that long holiday break, Jacobs Media's Paul Jacobs had plenty of time to ruminate over "value added," focus group facilities, and what it all means for the radio business in the new year.
One of the ugliest new words in business jargon is "commoditization" - defined (by the Free Encyclopedia of Ecommerce) as the dilution of a market sector's internal differentiation and competitive nuances in favor of a mass market where price alone determines consumer behavior. The industry's mode of competition thus moves away from innovation of the underlying, commoditized product and toward alternative methods of building value.
I was thinking about what becoming a commoditized business means while recently conducting research for a mobile client. You see, every year, we spend countless nights in focus group facilities. You've seen them - rectangular rooms with fluorescent lighting, M&M's on the table, microphones embedded in the ceiling, a two-way mirror, and ten (hopefully) well-recruited respondents who are willing to share their thoughts for 90 minutes in exchange for $75.
The facility itself is usually located in a colorless office building, and the staff is friendly enough - dedicated to making sure the food arrives on time, the respondents show up, and hopefully, to get everybody out the door by 11 p.m.
In other words, if you've seen one focus group facility, you've seen them all. They are essentially a commodity - they provide a service, you pay them, and you move on to the next city. One of my biggest nightmares during a heavy focus group cycle for Jacobs Media is receiving an online survey from one of these facilities a week or so after a project. For the life of me, I am hard-pressed to recall any specifics about these companies in order to fill out the questionnaire.
Then there's Baltimore Research, a facility we've used several times in the past on behalf of many clients in the D.C./Baltimore corridor. Their facility is nice enough, but that's not why we like to work with them.
Their staff is awesome - attentive, professional, and extraordinarily competent. But one of their key difference-makers is their company chef. That's right, instead of the traditional deli tray, cold pizza, or array of carry-out menus, they have a professional chef on-site who is there to make sure the client has a memorable experience and will tell others about it. The owner is on-site - he makes a point of introducing himself and personalizing the relationship.
Why should anyone care about the fact that there's a great research facility in Baltimore? Because the trend in many business categories is to cut, strip, and standardize to the point where no business actually stands out from the other. When that occurs, it all comes down to pricing, and when that happens, there are no winners.
Baltimore Research obviously has a different strategy. While everyone else may be reducing services and personnel, they have invested in the customer experience, betting that their clients will tell others about them - and we all know the power of word-of-mouth.
And while their recruiting is very strong, it's not like other companies don't have the ability to fill up a conference room with articulate respondents.
And that's the point. How does an advertiser decides between five stations that have a 4.0 share? Too often, it's simply pricing, and that's where radio is hurting itself. We hear a lot about share compression, but very little about how stations have strategized about how to break out of the pack, and provide a better value for its clients.
I was reminded about Baltimore Research when I received their digital Christmas Card last month. It contained a corny, but clever video, which once again reinforced the difference between them and the competition.
All businesses - especially radio - can learn from Baltimore Research. Radio is sadly becoming a commodity, its value reduced to ratings and price. Advertisers have become sharks in the water, playing stations and clusters against each other, as salespeople stop selling key value points and simply whip out their calculators.
The end result is that the things that make stations valuable - consumer results, personalities that engage listeners, a quality selling environment, well-executed promotions, creative digital strategies - get compressed into the CPM grinder. And in order to get on the buy, clusters wind up actually bonusing lesser rated stations to provide "added value." How can companies demonstrate value when commercials are given away at no charge?
2010 needs to be the year a radio station, cluster, or company says "Enough!" Who will step up and invest in what advertisers really need in order to set themselves apart? Who will produce videos (like Baltimore Research has) and develop meaningful sales marketing tactics to enhance perceived value? Who will commit to a serious, sophisticated sales training program in order to develop professional account executives who understand how to craft multi-platform marketing solutions?
Simply waiting for the economy to turn around isn't going to cut it. The legacy of "Less Is More" has permanently damaged the value of radio in the collective mind of advertisers.
So, what's your "secret sauce" that sets your station or company apart from the competition? Are you just another station in the market or another radio company? Or do you have values, assets, and attributes that get advertisers - and listeners - talking about your key differences.
What's your "chef" that separates your operation from the competition?