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Why Fans Matter To Your Radio Station
February 8, 2019
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Radio stations spend a lot of time and money chasing cume. And cume is important, for sure. The more customers, the better the chance to build a loyal fan base.
But many stations put far too much emphasis on attracting more listeners, when they should be concentrating on the value of fans. And this alone is enough to cause a logical person to immediately invest in database marketing. That's especially true for Contemporary Christian stations.
Building fans is hard, and it takes time. Listeners don't change habits quickly or easily. That's even more true for products they don't think about much and don't have to pay for (radio).
Step back and evaluate the impact of fans, and it's easy to understand:
- Overall, the audience doesn't listen much. In fact, 50% of a station's Daily Cume tunes in less than 2.5 minutes per day. Wow.
- The vast majority of a staton's ratings come from a small fraction of their best listeners. At most stations, about 90% of the quarter hours come from just 10% of the audience.
- Those listeners who are passionate, raving fans are extremely valuable. And those fans convert to actual dollars. That will make the GMs and bean counters take notice.
But how valuable are fans, really?
The Value of Fans
You may debate that 90% of total listening coming from the core fan base. Okay, I understand that. But it's at least 80%. That would fall in line with the 80/20 rule that applies to nearly all businesses.
Sometime ago, DMR Interactive created a model for their clients. It's easy to run this exercise on your station.
Fist, calculate the value of a P-1 listener with this formula:
- Annual revenue of the station:
- Multiply by the % of revenue driven by ratings (This is typically 85%)
- Total = Ratings Driven Revenue for the station.
- Multiply by percentage of ratings driven by fans (80-90%).
- Total: Total Revenue Driven by Fans
- The Value of An Individual Fan
Now, let's figure out what each individual fan is worth.
- Total Station Meters or Diaries Over Last 12 Months:
- Value of a Single Fan's Meter or Diary: (Total Revenue By Fans/Total in Line 1)
- Next, calculate the Incidence Rate for the market, based on the total population or a demographic:
- Population (total population or focus on demographic
- Ratings Period In tab population (for last 12 months)
- Total Ratings Respondents per 1,000 Population (Divide Line 2/Line 1)
- The Value Of A Smart Database
Stations that build active databases know that members of that database are more likely to be fans than those that are not. That makes sense, right?
So let's assume the station has done at least a reasonable job of building, maintaining and communicating with the database. In other words, it's legit.
Here's what we calculate next:
- Number of Database Members
- Divide by Ratings Respondents per 1,000 (in above calculation)
- Total # of Ratings Respondents in Database (Line 1/Line 2)
Now we know how many likely ratings respondents are in the database right now. That's powerful information, huh? But wait, there's more.
Now, you can more easily calculate the value of your database:
- Value of fans - a ratings respondent (From second calculation)
- Multiply by the number of ratings respondents in your database (From above)
- Total database value
Okay, the math is starting to get a little complex, and you may be totally confused as to what goes where.
Just know this:
The obvious value of fans is why a smart database is one of the most valuable assets a radio station could have. Your station likely has a loyal, passionate core. But how much do you know about them?
Not only is it the most effective way to stay in touch with fans and potential fans, the database can be the hub of a powerful hyper-targeting strategy for first-preference listener expansion.
This is also why growing the database should be a primary goal for every radio station.
Conclusion
That's the science of the value of fans. Ratings success, of course, demands a balance of art and science. One without the other is an exercise in disappointment.
When a small fraction of the weekly cume is responsible for the vast majority of quarter hours, doesn't it make sense to invest in resources that allow the audience that matters most to be specifically targeted?
The goal should be to create as many passionate, loyal fans as possible. This may will upset some listeners on the other side. That's okay. For every 100 true fans, there'll be at least one who doesn't like you. And they will be the loudest.
Focus on fans. Find them. Love them. Stay close to them. They're probably already in your database. Now you just have to give them reasons to love you back.
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