As 10-year-old boys growing up in northern Wisconsin, my neighbor and I would often discuss whose dad could most likely beat up the other’s, usually after arguing over a game-winning shot on our driveway basketball hoop.
This has nothing to do with advertising, but it has a lot to do with how you structure your rates. The degree to which we choose to stick to our rate card is an age-old debate among publishers. The great majority of us have some flexibility in our rates, allowing salespeople to determine how bad we want that last quarter-page advertisement through discounts steeper than the smiley face offers at WalMart.
We don’t negotiate our rates at COLE Publishing. That’s not to say we don’t offer discounts, — we do offer them for frequency and early payment — but we don’t stray from our rate card at any time, for anyone. Most of you may be snickering right now, scoffing at the money we’ve foregone by not knowing when to swallow our pride and let some agency beat us up for one last insertion. But here’s what I’ve learned over the past decade of standing behind this no-negotiation philosophy:
Advertisers will respect you more when they know they are paying the same rate as everyone else, especially their competitors. If you charge Company A $2,000 and Company B $2,400 for the same ad, inevitably Company B finds out. Where does that put you on the level of trust for marketing their company, products, or website?
It’s far easier to negotiate discounts than it is increases. If you give discounts to survive a downturn, how long might you expect it to take to get back to the rates you were once charging? Months? Maybe. Most likely, years. Standard rate increases for inflation and cost of living usually run in the 3-6 percent range. However, discounts tend to run much steeper, in the 10-20 percent range.
We’ve got faith in our products, and charge accordingly. By lowering your price, you send the message that your magazines have less value than your competitor’s titles or that your own rate card indicates.
Rate cards capable of offering steep discounts must be inflated to begin with. This is a Selling 101 tip we teach all of our salespeople. We could have easily set our rates at $10,000 a page, then sell them for $5,000, or a 50 percent discount. That would make agencies feel like good negotiators, but it does little to value your true services. Instead, we’ve chosen to price our ads appropriately.
With one rate card, there is never any confusion over what price was quoted.
In hindsight, I think my Dad probably would have gotten beat up. I’m glad he and my friend’s dad never actually fought. I’m also glad I’ve never lowered my rates, or my advertisers’ expectations of what they can expect from our company. Can my rate card beat up your rate card?
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