Strategies for pricing the rest of 2020
By Erin Koller
As we settle into this current reality – certainly not comfortably but with an acceptance of how things are and how we should react – it’s natural to start thinking ahead. Many customers report significant Q3-Q4 negotiation activity, which feels encouraging. We’re pretty happy with where June has gone over the last few weeks, and we have every reason to believe that July and future months will follow suit. Things ARE improving, but cancellations, budget cuts, and demands for reduced rates will certainly continue. The economy, advertisers, and consumers have all taken an unbelievable hit to both finances and spirits over the last few months, and it will take time to climb out of it.
But if we can get most of our sporting events back;if we can figure out how to continue to open up safely while keeping COVID infection and death rates down, we’ll start to make bigger jumps.
Not knowing when or how quickly we’ll see significant improvement, and not having historical trends or analysis to lean on, makes it very hard to forecast and price the future. In both certain and uncertain times, pricing is all about your comfort with risk. When you don’t know what’s going to happen, when you have to take a gamble and just go for it, what kind of “wrong” are you willing to be?
Wrong #1: You’re optimistic about a faster recovery and big money in Q3, while also expecting a big improvement over Q2, and push pricing. But you’re wrong, it takes longer to come out of this, and in fact you’ve overpriced, you’re running wide open, and you’re beaten up on share by your competition who bet on the second kind of “wrong”.
Wrong #2: You’re a lot more pessimistic about Q3, or you just want to rack up the share points. You lower pricing, expecting very small improvements over Q2. But you’re wrong, things got better, faster than we thought. You’ve under-priced, are way too tight, and you’re preempting like crazy the buys from all those advertisers you just begged to come back. You’ve killed your LUR and not driving those precious political rates.
Here’s the fun part: neither approach is really wrong. You might run a little tight or a little open depending on your choice, but you accept that as your risk and push on. In truth, you can’t get yourself into too much trouble unless you are entirely unwilling to change as new information presents itself. You’re not going to do all of your business in one week, so just make a call one way or the other, and then adjust from there.
Clients of our ShareBuilder pricing software always have a consultant ready to help. Whichever approach you decide to go with, our consultants are committed to supporting you. We may share the opposing view (this is what the data says July might really look like based on June losses, or that September target feels a little aggressive given what you’re saying in August) just to give you another perspective. It’s your call in the end, and your consultant will be there each call to help you adjust as the new info suggests you should. Our team lives in this environment, just as you do. Your consultant will bring not only a fresh set of eyes to the data, but insight and analysis on the industry around the country to help you get out of this on top.