local media insider

What to do about advertiser churn

Alisa Cromer
Posted

Advertiser churn - the number of advertisers who do not continue with your company - is notoriously difficult to track. 

Are they just "taking a break" or "seasonal" as the sales rep contends? Or gone for good? 

And, as we all know, what does not get "measured" does not get the attention it deserves.

Even if you are not measuring churn, it is happening and is a key indicator of whether or not your sales of digital services - much less media products - will succeed or fail. 

To make the true cost of churn concrete, let's take the example of the cost of an average digital hunter. 

A $60,000 hunter who makes 36 sales a year, will sell $4000 to $6000 per account for a small business and $10,000 to $20,000 for a larger accounts. That's $144,000 on the low end to $400,000 plus in revenues for say, a second year rep who is "killing it."

The first cost of churn is simply what you paid the rep - $60,000/36= $1,666 per account.

But it does not end there. You also lose $5000 to $20,000 per year in annual revenues from each account. 

So, if half of new sales do not "stick", you've lost $5666 to $21666 per account, or $101,988 to $346,000 per hunter sales rep.  Even a 25% churn for a team of four loses all the revenues that one rep bills. 

Do we have your attention?

There are lots of tactical ways to reduce churn - a great inside account manager in charge of "customer success", for example, is a best practice now for digital agencies with an aggressive sales force.

But the number one reason for churn is deeper than personnel organization - it is lack of measurable results.

Think about it, would you, personally, continue to spend the financial equivalent of a California mortgage payment every month if you did not have proof that you were making money on the campaign? Would you continue if you knew you were, say, doubling your investment over the course of a year? 

Then consider differentiating your agency by providing digital marketing programs that always deliver a measurable result  - not click through rates, which measure relative success of creative and distribution channels, but actual conversions. 

Let us help. 

One of the goals of this site in 2014 is to continue to provide  examples of "what works" not just for media to grow digital revenues but also for local merchants to achieve measurable results. Top Ads will evolve next year into a searchable database of successful marketing cmapaigns by advertiser category.  

Your reps can use these ideas to sell more, be excited and have happy customers.

This week's reports look at two outstanding examples of campaigns  with measurable results. One that generated 300+ in-home consultations for  sales of granite countertops in 35 markets, and one that allowed a pizza company in Houston to respond to 250 to 500 monthly Twitter conversations around food with an offer and referral program.

The Twitter campaign was built using the Social Compass platform, which we review here.  Find more on platforms used  and alternatives that have been rated and reviewed by other media companies on MediaExecsTech.com.

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.

Comments

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  • howardowens

    Want to reduce your churn? Improve your content. Small business owners will be loath to drop an ad from a news product that everybody in town is talking about. Content is king.

    Wednesday, December 18, 2013 Report this

  • Alisa Cromer

    Thanks for sharing your opinion. I'm a deep believer in quality content. But quality of content does not reduce churn in the kind of directly proportionate way that you suggest. Content is the brand and merchants are indeed influenced by brand credibility. However, the research shows that the number one factor merchants will consider when choosing which marketing channels to keep or drop in 2014 is measurable results. Merchants plan to reduce channels that do not produce a result, content be damned. So if you are interested in making great journalism, and you are not a non-profit, then the business side needs to understand the concrete reasons that merchants quit and what kinds of things they are still buying. It's not enough to have the readers, if you don't have programs for merchants that can turn them into customers.

    Thursday, December 19, 2013 Report this

  • howardowens

    If you have readers who are addicted to your content. Advertisers will get result.

    This isn't just an opinion. I live it every day.

    Monday, December 23, 2013 Report this

 
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