Cost Cutting: The First Step – Measure Your Media Ad Sales Costs

ID-10093044Jim Zielinski, Founder of Zielinski Financial Advisors, LLC, knows all about cost-cutting measures to save money for niche magazine publishers.  There are always ways to look within and do a better job when it comes to margins. We are beginning a Cost Cutting series with posts every Thursday for the next 5 weeks to help YOU improve the bottom line for your media business. We’ll bring you what works and what doesn’t for magazine publishers to improve financials based on Jim’s knowledge and expertise about what works for niche magazine publishers.

The first step: Get a handle on what your expenses really are. You can’t begin to find savings for your publishing/media company unless you know where to look!  It is helpful to create some benchmarks to tell you where the culprits are lurking.  This is what MEASURING YOUR COMPANY REALLY MEANS.   After you identify these problem areas, you can then develop strategies to defeat them.Start with your sales expense. (In future posts we’ll discuss industry averages for expenses and revenues, but for now just ask yourself if you are happy with the number you find.) If it seems too high, then ask yourself these 4 basic questions to find the problem and set internal benchmarks:

1.  Is my production per sales person is too low?

2.  Am I paying too much?

3.  Is the territory is wrong?

4.  Are the sales people are discounting ad prices too much?  (Some owners control this strictly, some don’t.)

Now that you’ve taken a broad look at your sales and sales-related expenses, measure your company’s performance, find the cost culprits, and make the fixes.  Then repeat. This is an ongoing process.

Where do you start measuring? Here are 4 ways to get a handle on your sales costs:

  1. Track your largest customer spending.
  2. Track your ad sales team’s effort against the largest customers.
  3. Find trends that are unfavorable and attack them quickly.
  4. Know the annual sales production per sales person, and measure their total compensation against their sales volume.

After you have taken these first steps to set appropriate benchmarks and measure your performance, you can start looking for areas to reduce costs.  Stay tuned next Thursday for Jim’s ways to evaluate Revenue per Employee and whether your organization is at the right number for profitability. Share your questions with us on Facebook or Twitter.


19afd32About Jim:
Now: Jim Zielinski is founder of Zielinski Financial Advisors, LLC, an independent financial consultancy. The firm’s focus is on acquisitions, bank financing, profit and performance improvement, and preparing your company for sale.
Past Life: Jim worked in banking and equity investing at Chase Manhattan Bank, N.A. and Bankers Trust Company for over 20 years.In 1997, Jim became CFO for Hanley Wood, LLC, a business to business media company, where he was an owner, director, and executive directing the financial affairs of the company until its sale in 2005. Jim is a member of the Board of Managers of Virgo Publishing, LLC, Athletic Business Publications, and MedTech Media.


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