(By Eric Rhoads) My thick skull often takes decades to learn important lessons, but one lesson has made me more money in the last two years than in the prior five years combined. I’ve moved my business from gradual, incremental income to a tsunami of cash, and in a very short time.
It turns out I was the dam holding back that flood of cash, because of that thick skull telling myself, “This isn’t the business I’m in.”
Before I share it, please know that your own thick skull will immediately discount the possibilities. Yet if you follow this track, your profits will soar beyond anything you ever imagined. Though I’m only one example, I can tell you that I’ve never seen anything like it.
This journey started five years ago, as I hit the 20-year mark with Radio Ink. I realized I was not much wealthier than when I started the magazine. I had, essentially, a paycheck, not a business.
Sound familiar? What if I told you your radio company could leverage the power of your audiences and your ads to build a division that will generate more revenue and higher margins?
You’d probably tell me all the reasons it can’t work. I know, I’ve been there. But after 20 years of a good but relatively modest income, I spent five years immersing myself in education, attending Internet and digital events. (Now some of you are thinking, “There’s no money in digital. We’ve tried it.” OK, those of you who feel that way can leave now — more money for the rest!)
I ended up reinventing my company, and today it is more of a digital company than a traditional media company. I’ve doubled the size of my business twice within the last five years and I’m on track to double my business year-over-year in 2017.
So here’s the move: First, you build loyal audiences. You’ve already got that part done. Then you get those loyal audiences to give you their e-mail addresses and follow you on social media. Most of you have already done that, too.
Then you build a deeper relationship with that audience (most people miss this critical element). Then you start selling them stuff. Orders will come flowing in, and you will be flush with cash. It’s what I call creating a back end.
“But Eric, we’re in the business of selling stuff for other people. Plus, we have radio to sell stuff, why would we use e-mail and social media?” Well, I have magazines that sell ads. You have radio stations that sell ads. But I could get only incremental growth. Though I’m sure I could do better, I’m not sure I can make my business grow 10 times larger in a couple of years. But with this strategy, you can do exactly that.
What every radio company today needs is a direct-response section to bring in revenue in new ways — a “DR division” for your group or chain. (Yes, this can be done on a small scale for independent stations.) A small team can run this division and probably equal the revenue of your entire radio division within two or three years, and then you’ll start seeing exponential growth. (Well, if you’re a multibillion-dollar company, you’ll need a bigger team.)
Oh, I understand that investing in something new can be nerve-wracking. But I hired a killer digital maven, who built a killer team. It took us about two years to get the infrastructure built, and it took some time to develop products. But the results have been remarkable, and we’ve only begun to tap it.
You can build this business on digital products your team invents for your audience, with no shipping, handling, or human hands needed for order fulfillment. And when you make great products, people are happy and will buy more. (Of course, you can do physical products, too. We do both.)
I’m convinced this is the biggest opportunity ever to hit radio. You have relationships with millions of listeners who know and trust you, and you have the ability to enhance what you’re selling with your unsold inventory.
Is anyone in radio doing this today? Not that I’m aware of, but it’s just a matter of time. What I love about this strategy is that I don’t have to make sales calls, I don’t have to pay commissions, and it doesn’t disrupt my existing business in any way. I barely use any of my own inventory for it (frankly, I don’t need to).
I predict that the first radio company to use this strategy will, within five years, double or triple its current revenues. I know that seems like a bold, even insane claim, but based on what I’m experiencing, and with the right guidance, this strategy could explode radio.
You see, you’re not in the radio business. You’re in the business of growing an audience and monetizing that audience. If you think of it from that perspective, everything changes.
Eric Rhoads is Chairman of Radio Ink magazine and can be reached at [email protected]