Session: Setting Long Term Goals Kirk Nelson, VP Public Radio Partners

1. Session: Setting Long Term Goals Kirk Nelson, VP Public Radio Partners

2. The nicest thing about not planning is that failure comes as a complete surprise rather than being preceded by a period of worry and depression. John Harvey-Jones

3. Setting Long Term Goals • What’s long term? • Establishing long-term revenue projections • Creating an annual plan

4. What’s Long Term? • Station philosophy • Where are you are at? • Where are you going? • Where station want’s to go?

5. Long-Term Revenue Projections • Where’s the money? • How do you project long-term revenue growth for department?

6. Value of Inventory Broadcast Web Events E-Newsletter Challenge Grants Values in thousands

7. Project Long-Term Revenue Growth • Converting broadcast ratings into revenue • Conversion Ratio • Market revenue projection • X stations P12+ AQH Share (4 book avg) = 1:1 ratio • Station revenue ÷ 1:1 ratio = Conversion Ratio

8. Evaluating Station Product Potential • Projecting revenue from current ratings • Calculate 4-book avg • Market revenue projection x P12 AQH Share x 50% • 50% conversion represents the highest performing average

9. Conversion Ratio Graph

10. Evaluating Station Revenue Potential • Conversion Variables • Higher average • NPR/News formats • Market dominance • Large sales staff • Lower average • Classical, Jazz and AAA formats • Major market agency dependence

11. Market Revenue Resource • Investing in Radio BIA Financial • J.C. PatrickNPR Station Development Manager1.800.329.5380, ext. 2736 stations281.494.6577 direct281.494.6578 faxjcpatrick@npr.org

12. Revenue Levers • Performance comes from • People • Inventory • Systems

13. Creating an Annual Plan • Create Operating Plan • Annual Business Plan for department • Focused, planned, deliberate & benchmarked • Communicates objectives • Sales Reps, GM, Development, Accounting, Traffic, Production • Helps you make adjustments • Monthly, Quarterly

14. Creating an Operating Plan • Survey historical performance • Benchmarking revenue pacing • By rep • By department • Inventory snapshot • Three scenarios • 100% at rate card • At AUR & projected sellout • One for planning purposes

15. Benchmarking Revenue Pacing

16. Objective PRP Operating Plan • Annual action plan • Focus on those few things • People • Inventory • Department Initiatives • Greatest results • Reviewed monthly • Operationally automatic

17. Getting Started Your City Market Operating Plan FY ____ Department Goal • Revenue: $ • Growth: % • Revenue goal in dollars and percentage growth • (Attach Annual Budget Projection)

18. Two Steps to Projecting Revenue • Understand your inventory • Scenario 1 • Total available at rate card • Scenario 2 • Inventory at average unit rate • Or for planning purposes • Scenario 3 • Assumption usage/AUR prior year • Or use for planning purposes

21. Two Steps to Projecting Revenue • Understand your inventory • Total available at rate card • At average unit rate • Assumption usage/AUR prior year • Build your budget revenue • By rep • By month • Quarter • Average weekly • Total growth

22. Rep Growth Rates • First Year 100K – 150K • Year Two 250K • + 50 – 100 % prior year • Year Three + 25 – 50% • Year Four + 20% • Senior Rep +10% • AE Billing Performance • Research and benchmark yours

23. New Rep Growth Expectations $0 - 1,500 Month 1 $2.5 - 5,000 Month 2 $5 - 10,000 Month 3 $7.5 - 10,000 Month 4 $8 - 12,000 Month 5 $8 - 12,000 Month 6 $10 - 15,000 Month 7 $10 - 15,000 Month 8 $10 - 15,000 Month 9 $12 - 20,000 Month 10 $12 - 20,000 Month 11 $12 - 20,000 Month 12

24. Two Steps to Projecting Revenue • Understand your inventory • Total available at rate card • At average unit rate • Assumption usage/AUR prior year • Build your budget revenue • By rep • By month • Quarter • Average weekly • Total growth

30. Plan Overview Few sentence overview of the market goal and initiatives to achieve your goal • Include last year’s revenue • Incremental revenue to achieve goal • Summarize revenue impact of initiatives

31. Plan Overview - Example KKWW sales will be reaching a level of maturity with the current sales staff being in place for over 4 years and in its available inventory that will yield a 15.6% growth over 2004 fiscal year. We have two continuing initiatives in 2006 that will help us in meeting our goal including selling out our traffic sponsorships and continuing to increase our AUR against available inventory. New initiatives include a “large account” initiative, adding a fourth salesperson, and attaching a revenue stream to KKWW’s newly created New Media

32. Individual Salesperson Goals • List each salesperson’s revenue goal and growth percentage individually

33. Individual Salesperson Goals Example • Johnny to grow 20% to 560,000 • Paul to grow 15% to $483,000 • George to grow 35% to $395,500 • Ringo to grow 60% to $230,000 • Pete to bill $95,000 in new revenue • Brian (SM) to grow 10% to $200,000

34. Initiatives and Action Plans • Please include the following for each initiative: • Description of the initiative • Specific goal • Key actions and corresponding dates to accomplish initiative

35. Initiatives and Action Plans • Please include the following for each initiative: • Description of the initiative • Specific goal • Key actions and corresponding dates to accomplish initiative Adding one new sales rep in order to insure revenue growth and to increased pressure on underwriting inventory

36. Initiatives and Action Plans • Please include the following for each initiative: • Description of the initiative • Specific goal • Key actions and corresponding dates to accomplish initiative New rep will add $95,000 in new business during the upcoming fiscal year and help increase pressure on station inventory to 84%

37. Initiatives and Action Plans • Please include the following for each initiative: • Description of the initiative • Specific goal • Key actions and corresponding dates to accomplish initiative Posting week of June 9 Interviews week of June 23 Finalists and referral calls week of June 30 Offer letter week of July 7 with two week start Average billing $5-10K by month three and $8- 12K by month six

38. Initiatives and Action Plans Description: Adding one new sales rep in order to insure revenue growth and to increased pressure on underwriting inventory Specific Goal: New rep will add $95,000 in new business during the upcoming fiscal year Key Actions and Corresponding Dates: Posting week of June 9 Interviews week of June 23 Finalists and referral calls week of June 30 Offer letter week of July 7 with two week start Average billing $5-10K by month three and $8-12K by month six

39. Monthly Department Update

40. 1-Year Operating Plan Now your department has a plan that’s: • Focused • Planned • Deliberate • Benchmarked • Measurable

41. One More Thought… • 60 Minute Strategic Plan • 13 steps process for establishing long term goals • John E. Johnson • 530-758-0203 • http://www.60msp.com/ • Email: JohnE57@AOL.com

42. Setting Long Term Goals Questions?

43. Says Thanks to its 2008 PRDMC Platinum Sponsors