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Rob Adair

The Math Of Making Budget

1-25-2013

I never put much credence in closing ratios. Whenever I hear someone say, I have a 50 percent closing ratio I never believed they really knew. After four decades of managing sellers and being a radio seller, I can tell you that I have no idea what my closing ratio is nor can I tell you the actual closing ratio of any seller that has ever worked for me.

I did, however learn the true mathematics of making budget. This formula served me well over the years and never proved wrong. My entire career, probably like yours, has been the assignment of delivering the number. As a salesperson, a GM, a regional VP and a COO, every day was the task of delivering the number. As a seller and a sales manager, the number was my budget that given month, then the quarter, and finally the years number. As a GM, and positions higher up the radio ladder, it became a top line and a bottom line number every month, quarter, and for the year. I wasnt in radio very long before I realized there were few business problems that couldnt be repaired by more revenue. I could control expenses, but driving that top line number was the key to virtually everything. I never spent energy on increasing closing ratios. I spent all my energy on asking for enough business to insure the number.

Any time I could simplify something, I did. With that in mind, heres the math to making budget; to delivering the number time after time.. ANNUAL BUDGET TIMES 10, DIVIDED BY 52 EQUALS THE WEEKLY DOLLAR AMOUNT THAT MUST BE PRESENTED. Lets say youre a seller with an assigned budget for 2013 of $500,000. Your budget times 10 = $5 million, divided by 52 weeks = $96,154. You must ask for a minimum of $96,154 in business every week. This will always come in a variety of presentations, from a 30-day campaign for $5,000 to an annual campaign for $60,000. It doesnt matter when it airs, just never ask for less in any week. They key is honoring the math. The same formula is true for a radio station, a market or, indeed, an entire company. Every week we ask for the right amount, well end up delivering the number.
For years weve been told selling is a game of numbers. We just didnt know the math. Now we do.

Rob Adair is the President of Pinnacle Solving. His company provides revenue growth solutions, branding and differentiation strategies to radio and other industries. Adair is a former radio industry COO and Sr. VP overseeing 25+ stations and multiple major markets. He can be reached at 405-641-0458 or by e-mail rob@pinnaclesolving.com




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