How To Recession Proof Your Radio Station

It’s official, we’re heading for a recession and double-digit inflation but should radio station managers worry?

Below I explain why the key for your radio station to thrive and not just survive is marketing your station, it will increase listeners and bring in advertisers. I’ll also tell you which online and digital marketing tools will help automate your marketing, saving you both time and money.

There are five things your radio stations must do to prepare for the next months and years ahead.

1. Cash is King

We’ve already seen massive energy cost rises, which all the central banks say is the major cause of inflation. This, along with a critical shortage of workers and long lead times from suppliers, has meant businesses have pushed up prices.

Maintaining a healthy cash surplus is critical in to order cover rising costs. Even very successful businesses go bust due to lack of cashflow. Small local radio stations are particularly susceptible to sudden rises or unexpected bills. Even in ‘normal times’ many are run on a shoestring and others survive month to month.

I recall in the early days chasing advertisers to make sure invoices were paid before the end of the month and in time to pay our bills. Inevitably on a couple of occasions it didn’t work out, so we were eternally grateful to our understanding landlord.

A question to ask is how long could you remain on air without any of your current income? Instead, relying solely on just the cash in the bank or an overdraft to cover your fixed costs for such things as staff wages, broadcast and software licenses, PRS, PPL, energy, rent and broadband.

Next look at your variable costs. Simplistically these are expenses associated with maintaining or gaining an income and include workers’ overtime, freelancers’ wages, advertising and marketing expenses.

Many businesses immediately think that reducing these variable costs are the answer but that is NOT always the best option especially when your competitors are doing just that! Large businesses often have the option of reducing staff costs without adversely effecting productivity.

For smaller businesses like radio stations the bottom line is look for options to remove costs without reducing your ability to gain new business. This will mean investing in technology, increasing your marketing NOT reducing it and working more efficiently by rationalising your processes.

It wasn’t that long ago that you had to stand in a queue at your high street bank to pay in customer’s cheques.  Now of course we have electronic payment. By default have all your customers pay by Direct Debit or in full up front. This will save you an inordinate time chasing customers for payment. If your bank can’t offer a DD facility, then use a third party. We found GoCardless to be excellent. There are many others.

Incredibly some radio station accounts are still held on spreadsheets! This is frankly nuts given that basic accounting packages are simple to use and cost just a few quid a month. QuickBooks, Xero and Sage are all very capable.

The UK government even pays part of your subscription for you. You can find out more here. https://www.learn-to-grow-your-business.service.gov.uk/comparison-tool?fs=e&s=cl

2. Keep Marketing

In stormy weather it’s natural to batten down hatches and take cover. However, marketing generates sales which is the lifeblood of your station.

In the 2008 recession a well-known takeaway pizza chain grew their business by significantly increasing their marketing budget just as their competition were closing sites and laying-off staff. They not only thrived during the recession but came out of it in much better shape than most of the competition.

It’s fair to say that selling local radio advertising is difficult at the best of times. In the UK the amount spent on just social media advertising in one month is greater than the annual advertising income for the whole UK radio industry.

I remember being asked by a prospective advertiser how we marketed the radio station. On reflection telling him that we broadcast 24/7 to 350,000 people and run our own on-air promotions, billboards and a few strategically placed banners wasn’t going to cut it. If it’s not enough to be on the radio for you then it’s not enough for your advertisers either. Today, online advertising is easy, cost effective and a very attractive proposition for businesses. As advertising budgets are tightened business owners need to see a positive return on investment. With online advertising, not only is detailed data easier to obtain than on radio, it’s also immediately available; there is no need to wait months for survey results.

Investing time and a relatively small amount of money in social media marketing to promote your station will increase awareness and grow your on-air audience. There is also plenty of data, graphs, plus demographic and other information available within your Facebook Page’s Insight tab which you can use in your media pack.

You could also use a product like Live Drive which automates your social media and provides you with an additional revenue stream by monetising your social media channels.
Find out more at live-drive.io

3. Diversify Your Income

Every significant change in the economy brings opportunity. It’s often the more entrepreneurial who, not only identify the likely winners, but they’re also able to quickly execute a well-thought-out strategy. If you’re considering diversifying, then make sure you don’t spread your time and resources too thinly or conversely, bet on just one big idea working out. Remember, it’s better to do just a few things very well than many things poorly. And, you’re very unlikely to succeed if you or your team has little or no experience in what you’re aiming to achieve, so be selective.

One of the simplest options, but not always the quickest, is to tap into local, regional and national government funding. Unlike during the COVID pandemic, it’s not known if specific government help will be available to the radio industry to see it through the current crisis.

The UK community radio model mandates that a large proportion of income is from sources other than on-air advertising. Commercial stations should also look to widen their net and seek revenue away from on-air sources.

Another way to diversify your income is through partnership and joint ventures. These are a great way to create new opportunities which are not possible any other way. Partnerships and JVs can reduce costs and risks too. To find partnership opportunities, first identify a potential niche within your target demographic and then seek out other organisations aiming at this niche. By working together, you can create very effective campaigns. Of course, always keep a business focus and know what you want out of it. As station managers we know there’s plenty of ways to produce amazing results and publicity for the station. However, I’m sure we have all been involved in campaigns which, with hindsight, never matched the business’s strategy and weren’t destined to be commercially successful either.

Another option is to look at your core skills and also how you can use your radio station’s facilities to the maximum; this is called ‘sweating the assets’. For example, Bauer provide training and apprenticeship programmes. Others like ITV offer high-end corporate production and the use of their on-air talent as presenters. During the last downturn my own radio station provided media training to PR consultants, marketing companies, communications officers and business executives. We invested in our own training to upskill our staff and in equipment to deliver these courses.

4. Rationalise Your Costs

This doesn’t just mean cutting costs, although that is clearly one aspect. Rationalisation starts by looking at each of your activities and their associated costs.

Often breaking a process into a sequence of steps helps identify duplication and where both time and money can be saved. Large organisations pay for this type of business process analysis. However, it is quite straight forward so you can do it yourself. Simply work through each process identifying who does what, when, for how long and what information is passed in and out of each step. Once you have the steps and the information passed around, consider if is it necessary, can it be done quicker, better, cheaper, another way or, better still, can it be automated?

As I mentioned above, marketing is a key activity which creates sales and therefore generates a vital income. In the past marketing is often reduced by companies during a recession. But because digital marketing on social media is very accessible, it can be easily automated. Don’t forget that access to your social media followers can be as, if not more valuable than your on-air listeners. Turning social media into an income stream using a tool like Live Drive is very easy.

5. Keep positive

The vast majority of us work in radio because we love the industry, it’s fun and can be hugely rewarding. Thankfully it’s a fact of life that economic downturns always come to an end. But when times are tough it can be stressful too, especially for those in management roles and others upon whom the financial success of the radio station depend. To successfully weather a recession, every organisation regardless of size needs strong leaders who clearly communicate a vision and create a sense of common purpose amongst their team. It's vital that as a manager you don’t take on all the responsibility yourself, instead share the load. Asking other people to be involved can be a great way to find new future managers and team leaders. It will reduce stress and help retain your own perspective.

Finally remember there are always two elements of a recession. The first is of course the economic facts. People and businesses genuinely have less to spend and will struggle to pay for essential items, products and services. The second aspect is created by the economic uncertainties which cause people and businesses to choose not to spend where in ‘normal times’ they might.

We in the media play a huge part in the latter. We know it’s more impactful to run stories highlighting the negative rather than the positive. Research by behavioural scientists has backed this up.  They have shown that humans feel significantly stronger emotions after a loss rather than a gain. While economic hardship is sadly a reality, it is not necessarily always universal. If we as broadcasters don’t look for positives, then we can’t expect our listeners and advertisers to either. Keep positive!