Radio's Quandary: Loyalty Doesn't Come Cheap

Radio is in a rough situation. Pandora, Facebook, You Tube, Twitter ... these are some of the services that are rapidly winning our listeners' time, interest and loyalty. When all things are equal and the Internet is as easily accessible as terrestrial radio, the listener will go to the ones which do the best job of catering to them. Will they feel like there is a terrestrial station that caters to them? If they do, radio will be able to stand up with these other outlets as listeners will find a way to squeeze your station in with all his or her other favorites.

Loyalty is the key to radio's future. To build loyalty, we need to be more to our listeners than just a music box. Pandora can cater to listeners better on this front than we can. We have to admit that on a music-only basis, Pandora or many other Internet sites can personalize in a way terrestrial radio never can. But, it can't offer them a voice that talks about what they are into; it can't offer them a once in a lifetime chance to do something they've always dreamed of or give them the opportunity to meet their favorite personality on Saturday morning at the mall.

Radio can do that, but for that we will need people. We need personalities who can speak the language of our listeners. Not only must they speak the language to really cater to a listener, they have to truly understand him or her. They have to have a real interest in their listeners' lives. They also have to know how to communicate this understanding on air with efficiency (it is a PPM world, after all.) They are also going to have to be capable in other means of communication. Specifically, they will need to be able to talk to listeners through Facebook. And, how great would it be if they could give a listener a visual (like TV and You Tube do)? Well, modern technology gives us the capability if our personalities know how to use it.

This is a big task, but with personalities of this caliber, radio can build real loyalty. I've seen personalities do this and watched loyalty build as a result. But this level of personality is going to require investment on radio's part. These people don't just grow on trees. They are either already in the business and need to be trained and coached in building loyalty, or they need to be found from outside and mentored. First and foremost, they need to be hired, and that requires money.

Other ways to build loyalty come through great promotions which offer the listeners exactly what they want. But acquiring luxury purses, Super Bowl trips, iPads and other stuff that the listener will feel really speaks to them will require money. And then there is social media. It is true that social media is a great way to speak directly to a listener about exactly what he or she is into. But to have staff who understands how Facebook works and how to communicate on it and in the voice of the listener will require ... well, just that ... staff. Staff means money. All of these things cost money. Building loyalty is not a cheap proposition.

So here is the real quandary: Radio isn't exactly raking in the dough these days. The economy is still weak, the advertising dollars remain well below where they used to be, and a lot of radio operators have debt to pay down in addition to normal operating expenses. The bills are high and the revenue is low, so where is the funding going to come from to invest in building loyalty?

To use an analogy, you don't want the bank to foreclose on your house so you scrape together enough to make the payment. But, you are going to have very little extra to buy the new roof the house desperately needs. What do you do? You do what it takes to keep things going and get by. What else can you do? But, if you don't do any improvements or renovations, your house is going to become less appealing.

That is radio's quandary and our greatest challenge. I don't want to sound alarmist, but I fear if we don't act now and invest in building loyalty in our existing listeners and future audiences, the world we will live in looks like this: The people who still listen to terrestrial radio regularly are those who don't have Wi-Fi or are listeners who are not Internet-savvy. We do still get some ratings, but they have gone down. Pandora (or the like) is everywhere and because they offer local advertising; our sales department is battling that. We may have a cool music app ourselves (iHeart Radio), but we don't really offer enough difference to win the battle. In addition, compared to other media and Internet sites, we look passé and out of touch to the advertising community that now we have to prove our worth to even more for their dollars. In this future, the listeners have left us behind ... and so have the advertisers.

Again, my goal is not to sound alarmist. My intent is simply to state that radio is at a crossroads and has a tough course to navigate. To invest in the people and resources to make radio worthy of something to give loyalty to will require money that is just not easy to find in today's radio budgets. But, if we don't invest in the short-term in building this loyalty, how will we survive long-term?

Is there a way we can allocate the resources we have to offering great local talent who can connect and cater to the audience, promotions that are meaningful to our listeners, communicate on social media in a compelling and sincere way and still pay the bills? I hope so. Not only does loyalty bring the benefit of allowing us to stand with the Pandoras and Facebooks of the world as a top choice of entertainment, it gives us exciting selling power. This will be the topic of my next essay.