| Carr Communications |
ELEMENTS OF UNDERWRITING
Prepared by
Carr Communications
The following underwriting tool has been developed for newcomers to the art of selling program underwriting. It is a 27-page manual on the basics of underwriting and addresses the various facets necessary for success. Because of the length of the document, only the first few pages are included here to provide a sense of the style and what might be expected in the remaining text. It is free and can be obtained by contacting Carr Communications.
I. What is Program Underwriting?
Program underwriting is the practice by which members of the business community provide funding assistance for public radio and television programs. In return, underwriters receive acknowledgment for their investments through tasteful on-air credits.
The underwriting facet of the operation is of primary importance to the overall development effort. Monies from program underwriting see a quicker return from efforts than does foundation support and often with more predictable results than can be reaped from membership efforts. In addition, underwriting from the business community not only provides essential monetary support for the operation, but the image associations formed with your prestigious business and corporate partners also assist with the necessary and ongoing positioning efforts for the station.
II. Underwriting Basics
A. There are three essentials in the underwriting process:
1. Information:
Quite simply, information is power. The more information you possess when meeting with a prospect, the more likely you are to walk away with a contract. Therefore, you should not only be well versed regarding your own product, you should have performed in-depth research on a given company and its product line(s), as well as the prospect's personal attributes, before making the appointment.
2. Belief in the Value of Your Product:
Public radio is unique. There is no other product like it. The alternative nature of its quality programming; the objective and in-depth treatment of the news reports; the upscale demographics of its loyal audience; and the effective targeting capability are only a few of the characteristics that give public radio its substantial value. In other words, you must understand and believe in its inherent worth before you can sell it effectively.
3. Attitude:
If you have mastered the previous objectives, your attitude will reflect two of the necessary attributes: self confidence and enthusiasm. Both are required to convince your prospect of the value public radio provides.
If you don't possess a good command of the facts regarding your prospect, you may come across as tentative and unprepared because you're "winging it". If you don't truly believe that your station offers a unique and valuable product, you certainly can't exude enthusiasm. At best you may appear insincere. In short...if you haven't done your homework and if you don't personally believe in your product, there is no way you're going to convince anyone else of its considerable value!
B. Public Radio and Commercial Radio Sales
1. "Spots" vs. "Credits"
Now. In commercial radio you are, indeed, selling. Simply because of the nature of commercial radio, advertisers actually buy air time. The more money the customer is willing to pay, the more time or "spots" he/she can obtain. Unlike the policy for commercial radio, the FCC precludes public radio from selling time.
We can, however, seek support of our programming by businesses and individuals in the form of program underwriting as defined above. Instead of a 30 or 60 second spot, we offer donor "credits" or "acknowledgments", identifying the underwriter.
These credits are highly limited in length and content. Usually they are no longer than 15 seconds and generally state the name of the business, product line and location. There may be no qualitative identifiers, such as "best" or "cheapest"; nor may there be a call to action, i.e., "Call now". Because of these very real constraints, we can't nor should we "sell" like commercial radio.
2. Meeting a Need with a Programmatic Solution
Once again, in public radio you are not selling time. Instead, you are meeting a veryreal need with a valid programmatic solution. In other words, it's not what the prospect can do for you. It's what you can do for him or her. This mind set is extremely important. It affects how you approach every aspect of the solicitation process.
As a result of the necessary research, you will have a clear view of the goals of a given business, as well as the personal goals and interests of its owner/CEO. As such, you will be able to easily identify the need(s) of a business and how one of your programs or special projects can meet that need. In other words, you'll be meeting a need with a programmatic solution...
Note: This document attempts to portray the very real and unique strengths of public radio. It does not, however, wish to do so at the expense of its commercial brethren. Public radio isn't better or worse than commercial radio. It is simply different--with different strengths on which to capitalize.
3. "Donations" vs. "Investments"
a. Charities receive donations.
b. Public radio is not--repeat--not a charity.
All those who support the stations are not making donations to a charity. They are investing in a business--one that provides at least an eighteen-hour a day service, 365 days per year.
Listeners, underwriters, all those who provide monetary support to public radio receive something in return for their investments. For listeners it's the on-air product. For underwriters it's a variety of things: on-air exposure, effective targeting of public radio's upscale audience, posturing themselves as supporters of a valuable community service, etc.
III. Knowledge of Product or Research, Research, RESEARCH
A. Why?
1. As a small development department, every step must count.
2. Therefore, you must research fewer, more likely prospects thoroughly. In this manner, the likelihood of obtaining a contract after visiting a prospect is a good probability, as opposed to a vague possibility.
B. Research Resources
1. Sources of information (only a small sampling)
a. Standard and Poore's
b. Who's Who (there are a variety of these)
c. McRae's Blue Book
d. Moody's Industrial Manual
e. Dun and Bradstreet's: Million Dollar Directory, Middle Market Directory, Reference Book of Corporate Management
f. Directory of Corporate Affiliations
g. Corporate 500
h. Corporate Annual Reports
i. Property rolls, plat books (these indicate major property owners--individuals that may possess large financial wealth, some of whom may be little known to other fund raisers)
j. Social Register
k. Local Historical Society
l. Brainstorming with board, current underwriters and well-connected individuals
Note: You can delegate the research responsibility to volunteers who enjoy that sort of thing; thereby freeing you up for other tasks. However, the research activities, as with all facets of development, must have explicit guidelines and supervision.
2. Business Profile
The end result of this portion of your research will be a comprehensive picture of each prospective corporation. The following are some of the variables you should explore so that you can make an informed comparison of the businesses you have researched:
a. Budget year: one of the easiest pieces of information to obtain and one of the most important. To go into a prospect's office at the wrong point in the budget cycle is a waste of everyone's time.
b. Product
c. Customers or target publics
d. Name of the CEO or the person responsible for making advertising and charitable giving decisions
e. Number of employees
f. Number of years in business
g. Gross sales figure
h. History of advertising/giving
i. To whom, what and what amounts
j. Given to station? When/what amount(s)?
k. What key things have happened to the company/spokesperson recently (expansion, new product, new CEO, bad press...)
3. Personal Profile
This aspect of the research is accomplished by talking with one or more individuals who know the prospect.
a. Name/age
b. Married/children
c. Life style
d. Hobbies and interests (a penchant for sports, scholarly endeavors, etc.)
e. Is the individual well-known in the community? If not, does (s)he want to be?
f. Type of personality: perhaps of all the personal traits this is the single most important. Each of the four basic personality types (driver, analytical, amiable and expresser) requires a different approach in order to be effective.
g. Does the prospect go out for breakfast, lunch, dinner or cocktails. If the answer is "yes", it is infinitely preferable to set up the initial meeting away from the prospect's office. The meeting will be more relaxed and you can continue to gather information over the meal or drinks so that you can tailor your presentation.
4. Station History
(2.) Product: ALL programs, their hosts, distributor, content, air time, etc.
(3.) Audience demographics, pyschographics and numbers
(4.) Station needs and goals for the future
(5.) Basic budget facts and costs of EVERYTHING, in the event you find a prospect who might be willing to fund something other than the options you have proposed
5. Common Questions Prospects Will Have--either spoken or unspoken. A careful consideration of the following will assist with your preparation and the resultant presentation:
a. Who is your audience?
b. How are you funded?
c. How do you spend that money?
d. Do listener/corporate/foundation dollars really help?
e. Why invest with you as opposed to other nonprofit organizations?
f. Are you telling the truth?
g. How well is the station managed or, in other words, is the money spent effectively?
h. How qualified is your staff?
i. Who is on your board?
j. How many volunteers are involved?