I own a retail store that buys advertising (among other businesses.)
The rep comes in today, with a question (I've trained the company's salespeople several years ago, so she asks my advice occasionally)
She sells a coupon book with glossy paper, and the mailing is 25,000 books (8 1/2 X 11 )..maybe 20-30 pages. A full page ad is $600, a half page ad is $350.
She says "I can't sell more pages. Only half pages and quarter pages. I'm losing money"
Now, I know that she pays a large fee for each page up to 16 pages, and above that, it's nearly all profit. So I said.....
'Lower the cost of a full page and raise the cost of a half page. Make the half page $425 and a full page $499."
She said that she would lose money on the full page ads.
I said "No, you'll make far more. You want to fill up the book. They way to do it is by converting half page clients to full page. And a $74 difference in price will do that. Then, you'll have all the pages where you get to keep almost all the money."
We did some quick math, and her net profit would go up 45%, with lowering the full page price $100, and not selling any additional clients. Magic.
Then, she says that the local newspaper is selling a page (same size as hers) for $200. And customers want her to lower her price to match the newspaper. It's impossible. I know her costs.
I asked what she told the customers. She said "I tell them that we have to pay postage, so our costs are more, and that the circulation figures of the newspaper are false. They throw away most newspapers, and they count the unsold ones in their figures."
I had to stop her. "We're friends. I'm going to tell you a truth. Never say again, what you just told me.....Nobody cares about your costs. Nobody cares about the fact that you have to mail the book, and it costs money. And when you talk about the newspaper fudging figures....I know it's true...you know it's true. But it sounds like sour grapes...and a lie."
Here is what I told her to say when the prospect brings up the difference in price.
"You're paying for eyeballs on your ad, right? We mail 25,000. The newspaper has circulation figures of 20,000. But Everyone in town gets The Town Money Saver (her magazine). How many of that 25,000 get the newspaper? (I told her to get a figure) Now, how many read the whole newspaper of those that subscribe? (get a figure) Now, How many find the insert, the magazine in the newspaper? (The figure we ended up with was about 4,000.) So, you are comparing 25,000 pairs of eyes to 4,000 pairs of eyes. Now, when do you throw out the newspaper (Next day). But the coupon book lasts a month (which it really does).
So .."per set of eyes" we are at 2 cents ($500 "new price" divided by 25,000). The newspaper is at 5 cents per set of eyes. ($200 divided by 4,000) My suggestion is that you use both the newspaper and us. They come out at different times of the month. But we also stay on the kitchen table much longer than the newspaper, and we cost less. What makes the most sense to you?".
It was off the top of my head. I really really hope she listened.
Never talk to a client from your point of view. Always from their point of view.
And your expenses? Your overhead? Your employee costs? As an advertiser, I couldn't care less. More eyes seeing my ad? Now I care.
I sure hope this helps someone.