Company: Deseret Digital Media
Markets: Utah, Idaho and Wyoming
Owner: LDS Church
Traffic: 225 million page views
Initiative: Telemarketing digital products
Key executive: Todd Handy, Director New Media Sales
Summary: Deseret Media's telesales department, launched in January, 2010, generates $240,000 a month in sales of digital products, mostly on the companies television and news radio site. At average sale of just $260, that's a lot of sales and a extremely well-organized department. This case study explores products, pitches, hiring practices, compensation, and management.
Challenge: Utah-based KSL.com, the site of the LDS-owned television and news radio company, is a mega-site with a whopping 250 million page views covering a tri-state area. While the radio and television reps sell KSL.com to national accounts and regional agencies, smaller businesses are the lion's share of the growth market and a full 70% of the site traffic comes from free classifieds. Monetizing the vast traffic requires the ability to sell to numerous small businesses whose average spend is $260 to $280.
"Most AE's will only get out of bed for $1000 or more.... they have to sell in the $1000 to $3000 range before it makes sense to them," Handy says.
Strategy: In January, 2010, Handy developed a digital only telesales department, starting with an investment in four sales people he personally trained. His background managing global call centers at AOL.com and other international telesales outsourcing companies helped. "I know that everything can be measured; it's what you do with those measurements."
A. Products and pitches
KSL.com was blessed from the start with a plethora of good products, especially the "meat and potatoes" of the effort, free classifieds that beat CraigsList.com traffic by an estimated 40%. But conceptually, the products are similar to what most local media have available to sell: Online display, classifieds, directories, deals and automotive.
1. Featured classified listings New reps start out upselling featured classifieds listings. Unlike directory listings, classifieds are listed in order of recency - much like CraigsList. This allows reps to upesll businesses to move their ad to the top in a fixed position (on CraigsList, their are NO fixed positions, even for paid categories such as recruitment).
The pitch is simple - which makes it a great place for new reps to start. Sales reps are trained to suggest that "if the ad is doing well, it will do even better" at the top, and if the ad is not working, well, it should do better at the top of the section.
2. Display advertising
Online display ads are now the largest source of revenues, sold both Run-of-Site and against 500 micro-categories. Retailers can advertise alongside private party ads, and "own" their niche sector for a very small investment. The pitch from reps is "share of voice" of the most targeted market you can find: People who are already buying and selling.
The display ads in these narrow markets are called "sponsorships" and sold on a percentage of Share of Voice model, to fit budgets of any size.
Take appliances as an example. In the washer and dryer section, "everyone who comes there is looking for a dryer," sometimes both sellers and buyers. Plus retailers can post ads for their inventory very inexpensively. The pitch then is simple: "What's your budget? What are you spending? What do you think you can spend? If its a $1000 section, and you only have $400, then 40% (Share of Audience) can be yours."
Some low ROI categories, such as clothing don't work well. However homes, cars, bicycles, RV's motorcycles, electronics and home appliances are all good prospects. "Your margins are too thin on a couple of t-shirts."
"Part of the strength of the sale is that the sections are so relevant. When people are coming here to buy and or sell, that is a perfect time for them to purchase from a retailer. I'm unabashed in selling against everything else that's not digital because i absolutely think it is the best way to go," Handy says.
3. Daily Deals. Inside sales also close daily deals, all though Handy is reconsidering changing how deals are gathered and sold. Revenue from deals is still a small percentage of the overall telesales pie.
4. Auto dealers. The upsell to the auto category are tiered levels that include how much inventory will be shown on the site and other features. Tiers include showing 0 to 16 automobiles, 16 to 30, or 1000 for an aggegrator that wants to put inventory on the site. With 40 million page views monthly in auto, dealers get a sizeable benefit from partnering.
5. Local directories Launched in March, 2011, a new local directory local.ksl.com, includes a number of upgraded packages, such as coupons, texting, video, and featured listings. The area is going well but as its only a few months old, not as well developed as classifieds.
B. Hiring and compensation
After developing good products and pitches, Handy's strategy is recruiting the right people with the right compensation programs. Here is his basic formula:
1. Hiring Experienced Part-timers
Deseret is unique in that Utah where there is a large telemarketing industry and thus a market of trained people. By paying a little over-market, Handy hires people who are already "trained by someone else" in outbound sales, though he will hire someone with inbound call background on occasion.
The inteview includes a phone sales behavioral test; Handy says managers who are hring "go into another room and call" and so new recruits can sell them something before they are hired. See a sample of a recruitment ad for a part-time telesales person, modeled on the one Handy uses, here.
The part-time staff works 30 hours a week for $13 an hour with no benefits ( $13 is a decent wage in Utah). But at 100% of sales quota the telemarketers can make another $1300 in bonuses: an accelerator kicks in at 100% so that that pay is even more, and under 80% of goal there is no bonus at all. A sample comp plan based on this model is here.
Top reps working 30 hours a week are running $40,000 to $50,000 a year, with the best of the best earning up to $70,000.
3. Management practices
The key managment tool is sales-to-monthly goal spread sheet (we've created one based on their model attached and explained here) that is watched and managed-to on a daily basis.
Every rep has a daily and monthly quota; the spreadsheet is daily shows sales to quota, and also to the month "through yesterday" for each rep and combined.
A key innovation on this sheet is that if a sales rep has missed the daily quota, it recalculates the new, higher daily sales quota needed for the rest of the month to meet the monthly goal. Handy uses this to set the pace for the department and to troubleshoot issues right away.
"If we are not at the monthly goal, I look at the ones who are off-goal." From there, Handy or the supervisor check the activities metrics, such as calls, and selling skills.
"Are they not asking for the sale or not getting through the gate-keeper," and so on.
Today, since the department has grown from four to 19 sales people, there are two supervisors, tasked with training and troubleshooting with sales reps who are behind on goals.
"We know for each individual, how far off they are off from the goal, and if it is 10 to 20% off the goal, how much more they need to sell on a daily basis to make it back up. If they get too far behind, say $4000 with five days left its not going to happen. We manage to the numbers per day."
The spreadsheet is also circulated. "Each day everyone sees if you are doing well or poorly." And an area on the sheet, "The Champion Vs The Challenger" shows how the two teams compare based on percentage of monthly quota.
"The number one thing I look at is sales to goal on the monthly spread sheet. I don't really care how many calls you are making per day, if you aren't getting your sales. If you are, I might suggest how much better you would be doing if you made a few more calls. But in the end, all I care about is that you are making your sales because in the end nothing else matters."
Since there are two superevisors, the two teams also compete, and the spreadsheet includes the Champion and the Challengers team numbers.
Of the 19 sales people, about seven are new. Of the rest, six consistently meet and exceed goal, including two are super stars who "kill it." Of the other six, four are at 80% bonus, and two are up and down. At any time, four of the 19 could be "on notice." "It's the typical bell curve," Handy says.
Successful sellers make about 60 sales month, or three sales a day, working three hours a day. That is, they make a sale basically every other hour. At an average sale of $268, they sell $500 to $1000 a selling day.
The average rep sells about $15,294 per month, with better reps who have been there for six months selling $23,000 to $25,000. The department has grown to 17 people and is aiming to reach 24 people.
Classifieds and other sales averaging $260 each total $240,000 to $270,000 a month in new digital revenues.
1. Handy acknowledges that the strength of the KSL brand name and marketplace is a keys to the success of the program.
"14 years ago, someone had the forsight to start free classifieds....we have market that trusts our name and that we are owned by the LDS Church, it makes a difference."
2. Training is also an ongoing issue, especially as the department has grown. "We are not training as well as I wish we were," he said. Even though 12 to one telemarketers to supervisor ratio is a "good span of control," it is too thin spread for a real training progam. He is considering hiring a trainer this year. "We have a curriculum, but it grows all the time as we add new products"
3. The department is also outgrowing its technology. "We are still missing a lot of best practices," Handy says. For example, the only way a supervisor can listen to both sides of the call today is via a speaker phone. Handy says the department is investing in a call-recording and monitoring system to aid in the 'side-by-side" training sessions. An outbound dialer might also make the department more efficient, when the volume is there to justify the investment.
4. Handy thinks that newspapers make the mistake of trying to sell CPM banner ads to small businesses. "They can't get it done, the sites don't speak well to small and medium sized businesses. Classifieds is better because it is so targeted. If you are a Mom-and-Pop business selling refrigerators, no one is looking for a refrigerator on the home page."
While Deseret Media has significant advantages, telesales works in a variety of digital marketplace and coupon sites that are huge growth areas for local media companies - both new and old.
Most local media companies who have laid off or are transitioning classifieds departments need to rethink where the growth areas are in their communities, and develop new marketplaces, so telesales is a great way to go. The success of Groupon and Pandora, who have mastered the art of telesales, proves the point.
Many thanks to Todd Handy, Director New Media Sales, Deseret Digital Media, for sharing his expertise with us.
The author, Alisa Cromer is publisher of a variety of online media, including LocalMediaInsider and MediaExecsTech, developed while on a fellowship with the Reynolds Journalism Institute and which has evolved into a leading marketing company for media technology start-ups. In 2017 she founded Worldstir.com, an online magazine, to showcases perspectives from around the world on new topic each month, translated from and to the top five languages in the world.