In just days, I’m honored to be doing a presentation of key Techsurvey 22 findings for Joel Denver’s AllAccess Audio Summit – along with key action steps so important to getting the most out of data. (I’ll also be hosting a free all-industry webinar presentation of the study, so be on the lookout for that info.)
I’m pulling together all the charts and graphs, focusing my presentations on arming programmers, managers, and owners with info and insights most helpful to radio broadcast teams. Inevitably, I’m going to hear from the skeptics, questioning whether a study focused mostly on core listeners is legit – a bona fide way of understanding radio’s relationship to its audience and its community.
That’s the cue for me to remind observers of Pareto’s Principle, better known as “The
8020 Rule.” Vilfredo Pareto discovered more than a century ago that in almost every key area of performance, 20% of a population generates about 80% of results. It’s true of sales staffs (and clients), podcasts (although maybe that’s closer to being Rogan’s Reality- “The 95/5 Rule”), and, of course, radio ratings.
So when I think about the Techsurvey sample – mostly comprised of a radio station’s database members – I think of old Vilfredo and what he might have said. Yes, the vast majority of our sample are people using radio now – in some cases, a lot. They’re still very much in the game. Most appreciate personalities, news, music, and the emotional return they get back when listening to a favorite radio station.
I have long postulated that when you know who your “Core 20” are and what they value, and when you learn what they do and where they go when they’re not listening to you, it answers myriad questions of importance to those charged with running stations or companies. That’s not to say that fringe listeners – P2’s, P3’s, and beyond – aren’t important. They contribute to audience ratings and shares. But you have to wonder whether the traditional effort of trying to convert P3’s into P2’s, and P2’s into P1’s hasn’t become something of a fool’s errand.
Is it realistic to think former radio listeners who have embraced Spotify, SiriusXM, podcasts and other new content and gadgets can be lured back to an FM station? Smart people looking at the broadcast radio business from the outside in – that is, in other industries – might conclude it’s just not possible; that radio would be better served by focusing its efforts on keeping current listeners happy and engaged, rather than trying to appeal to those who have gone missing or never listened in the first place.
One of those outsiders would be Marc Rosen, the new CEO of J.C. Penney. He has assessed his brand’s chances for survival in world where shoppers have infinite choices – high-end stores, fancier department stores, online ecommerce sites – and he’s concluded that investing in fresh thinking, innovation, and new services may be a waste of money and time.
Penney’s existing client base is still substantial, it is more middle class and aspirational, and perhaps most importantly, it loves shopping at these stores.
After surviving a near-death experience – Penney’s declared bankruptcy in May 2020 – Rosen believes that chasing the latest retailing trends doesn’t connect with JCP’s core customer base.
In a great article in the Wall Street Journal (it may be behind a paywall) by Suzanne Kapner, Rosen explains how his strategy came to him while doing a morning run, a clear-eyed, blunt look at Penney’s history, its business model, and its realistic chances for success – or perhaps better put, survival.
For many years now, I have referred to this philosophy as a “Core 20” strategy. It’s that 20% – also known as your P1s – who get the focus. And that’s precisely how Rosen is steering Penney in 2022. As he told the Journal:
“The biggest difference this time is we are loving those who love us…we need to give them more opportunity to come back and find things they love.”
Whether you’re running a sagging department store chain, an underperforming record
label, a restaurant that’s seen better days, or yes, a radio station, this philosophy goes against many marketing axioms. Most companies are always working on attracting new customers, including those who have little affinity to the brand.
The tried-and-true notion is that you do your homework usually in the form of research and development, you develop a strategy, you hire the best people you can, you create a product or service, you continue to craft and shape the product, and when it’s ready, you market it like crazy to your target audience.
But realistically, how much of that regimen is actually taking place in radio in 2022?
In order to win back old customers who have left “the store” or bring in new users, a brand has to invest heavily in research, content people, and marketing. In many broadcast radio companies in 2022, that’s no longer the way it’s done.
Mark Cohen, director of retail studies at the Columbia Business School put it succinctly about the rough road back for Penney’s:
“Many of (J.C. Penney’s) customers have gone elsewhere. It’s very difficult to get that goodwill back.”
It looks like Marc Rosen has accepted that reality, tough as it may be to swallow. It beats filing for bankruptcy a second time.
So what about a “Core 20” policy for radio, where you super-serve those who already enjoy the medium, and hopefully, your station? That means embracing the existing audience, and giving them what they
want. Doesn’t that provide a better ROI?
Instead of chasing new (and younger) cumers, most stations implementing a “Core 20” strategy would focus on their “regulars” – the creatures of habit who listen on most days, and who are generally satisfied with the product. Yes, the kind of consumers who make up most of our Techsurvey respondents, and the same ones who continue to give many stations solid Net Promoter Scores.
Now for those of you thinking about whether a “Core 20” approach means ditching digital, let me remind you that even the most traditional radio listeners have embraced streaming, mobile apps, smart speakers, and virtual meetings. Many of those in the upper end of the spectrum – Boomers and Gen Xers – learned how to better manage technology during the pandemic. They logged onto Netflix and Hulu, got their cameras working to see their families on Zoom and Facetime, figured how to download mobile apps, paired their phones in their cars, and even overcame how to successfully communicate with Alexa.
A “dance with those who brung ya” strategy has historically serve politicians very well. By appealing to the base, you ensure you’ll at least show up strong, and perhaps even win. It’s a retrench
rather than a retreat. And could a more focused approach work in radio – commercial, public, and/or Christian?
We’ll soon see what this looks like when we reveal our Techsurvey 2022 results later this month.
If you’re not one of our 450+ stakeholder stations, there’s still time to register for the AllAccess Audio Summit. I’ll be presenting a “special cut” of Techsurvey 22 at the Summit on Thursday, April 21 at
9am PT/12n ET.
After living with the data for weeks, it’s always fun to share it with engaged group of broadcasters. And a new “data nugget” will now be appearing each day in AllAccess’ Net News as a tease for the actual presentation.
There’s no one way to program a radio station these days. And as we’re seeing, legacy brands are experimenting with unconventional strategies in order to survive.
At its core, who in radio is ready to walk down that same path?
Jacobs Media has consistently walked the walk in the digital space, providing insights and guidance through its well-read national Techsurveys.
In 2008, jacapps was launched - a mobile apps company that has designed and built more than 1,300 apps for both the Apple and Android platforms. In 2013, the DASH Conference was created - a mashup of radio and automotive, designed to foster better understanding of the "connected car" and its impact.
Along with providing the creative and intellectual direction for the company, Fred consults many of Jacobs Media's commercial and public radio clients, in addition to media brands looking to thrive in the rapidly changing tech environment.
Fred was inducted into the Radio Hall of Fame in 2018.
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This is an excellent blog full of what is the right approach. Years ago, when Gary Donohue worked at what was then Arbitron, first identified the strength (need) of P1 listeners. The number that I saw for successful stations was 30%. That was the floor to maximize an audience. The approach you propose is the one we should return to focusing on. Much like the retail example you share. Well done, Fred.
I remember talking with Gary about his discovery about the value of core. I “get” that when there was no Internet, Spotify, iPods, and SiriusXM, radio could afford to seriously go after “fringe” (P2s, P3s), but you have to wonder whether that ship has sailed. Thanks for those thoughts, Mike.
It’s certainly right for stations to focus on core listeners, and it has been for decades.
The question is whether radio AS AN INDUSTRY should entirely focus on its core. Doing so would mean abandoning outreach to younger listeners and dealing with a continually aging audience.
That might be the right move in the short term. But it would mean blowing off the future.
Dilemma.
Sadly, Mark, I think the future has been blown off. When was the last time a client wanted to look at 18-24 year-olds? Much less teens. With few exceptions, I believe the industry has made its decision. Good to hear from you on this important topic.
What a sad commentary. Combine the 54 year old cliff with the 25-40 year old radio ship jumping and you have a medium with a death by1000 cuts, running out the clock strategy (did I include enough clichés?). Imagine if Verizon had, in the early 90s decided to just focus on their core and stick with landlines . I can’t think of any other sector that’s taken this approach, nor can I understand under those circumstances why everyone in radio is sold on this strategy. There are large operators with many clusters who could try out different strategies in one or two of them without a significant impact on their financials.
Why would anyone (especially someone entering the work force) want to work in a field that is committed to a strategized, systematic death? Radios’ Kodak approach will make a great business school case study in about 10 years.
It is a sad commentary, Bob. But I’m not being a defeatist, I’m being a realist. For radio to succeed in attracting new audiences to the medium would require a more concerted effort than we’ve seen for decades. An appeal to say teens would require more than just hiring a YouTube star, and playing nothing but music trending on TikTok.
As the industry is currently comprised, radio is already having trouble attracting talented young people who want to make it a career.
As as you note, there are large numbers of clusters owned by big operators who could try any number of innovative and “different strategies.” So, what do you see happening out there?
(Have we just switched places?)
I’m reminded of the old line about how you can’t put two feet into the same river–because as soon as you put the first foot in, the river has changed. I don’t know how many times I’ve heard the old, “This is how we did it 30 years ago and it worked then” line, with the person not realizing that river no longer exists.
I certainly don’t have the answer but as Bob said, some of these clusters could at least TRY to see if they might attract new and younger listeners with some of their underperforming signals.
Meantime, I fear Bob’s closing line, “Radios’ Kodak approach will make a great business school case study in about 10 years,” will forever haunt this industry.
How many of us will be following Penney’s more closely in the days ahead? (I will.) How many of us will learn from whatever happens to them?
David, we would do well to study Kodak, and any number of other companies that failed to keep up with the trends, and who placed its Q2 performance over a long-haul strategic vision. And as I responded to Bob, this is an old theme in the blog, as you know. Almost every big cluster has a “dog” performer (no offense to our canine friends) that could be that innovative station in the market, trying to new things. Instead, it is more likely to become the second Country station or the third AC. Thanks for commenting as alwawys.
I remember years ago when WBZ-AM focused on its core, its Boston listeners to improve its audience ratings, even though the station’s 50,000-watt signal reached all of New England and had tried to be all things to all people.
That strategy not only improved their Boston radio ratings but had listener growth everywhere else in New England as well. It created a buzz that had everyone wanting to be where the action was.
I wholeheartedly believe in the Core 20 philosophy Fred and look forward to your whole industry presentation.
Dick, these comments are most appreciated. The Law of Sacrifice states that no medium can be all things to all consumers. And the barrier to entry for a radio foray to attract Gen Z’s, for example, is likely going to be a non-starter. This type of venture would require more resources than most owners are willing to commit. And I look forward to the presentation, too. The data looks good. Thanks for engaging here.
Time and time again, a station with a specific strategy seems to always win-if the strategy appeals to its core users. I feel like a broken -er MP3 file when I say that we should appeal to the LISTENER first-the advertiser second. That means giving the listener compelling reasons to listen-and the advertiser compelling ways to say their message. How difficult can this be? Apparently, very-when we’re still running 8 minute commercial sets with 15-20 elements in it. Unfair to the listener (who will seek out other entertainment sources) and unfair to the 8th advertiser whose message is basically unheard. The P1 universe will continue to shrink until these issues are resolved. If this is the best way to get PPM listeners, then (in my opinion) it’s time to fix that PPM methodology!
Dave, “a lot to unpack here,” as they say. You raise some key points. Many decisions about the medium’s evolution (de-evolution) were made many years ago. In retrospect, I do suspect the timing to start PPM metered measurement was unfortunate. At precisely the point when radio should have been trying new ideas and trying innovative ideas was the moment when things tightened up. On the commercial front, PPM signaled two long stopsets, often at or near the exact time across entire markets – not a great experience for the audience, advertisers, or anyone. Thanks for weighing in on this.