While many publishers don’t believe in rate cutting, they feel forced to do it to stay competitive. However, rate cutting can be a tricky game. There are many financial, budgeting, managerial, and sales reasons to stay on the rate card. Let’s take a look why:
Effect on the sales team
Rate cutting puts a lot of pressure on the sales team by creating ambiguity and confusion about how they are to conduct business and how far to go with cutting deals. On the other hand, publishers are sometimes frustrated by the demands of their salespeople who want to make easier sales by offering clients special rates.
Creating insecure salespeople
Forced into price-cutting and deal making, many salespeople perceive themselves and their publications as weak. No one can be convincing as an advertising salesperson if he or she is insecure about their product. Breaking the rate card is also viewed as unprofessional by many media buyers, as well as advertising agencies. Also how can a client trust your word if he or she discovers their competition got a better deal from you? On the other hand, prospects who pressure salespeople to get a price break, often turn into difficult clients, who will desert you for the next better deal.
Salespeople get side-tracked
Instead of concentrating on building and selling the value of their publication, many salespeople are busy worrying about how much to give away and when.
Negotiating rates encourages salespeople to focus too much on price. Instead of working as consultant-counselors, they must now operate as “deal-makers”. Instead of building long range relationships, they are in danger of losing the confidence of their clients. For the new salesperson who is still learning sales skills and gaining confidence, they do not need to see experienced salespeople negotiating rates.
Rate cutting establishes a dangerous precedent
Many salespeople offer rate deals because they think once the advertiser is in their publication, they can get them back on regular rate card rates in the future. But the salesperson is setting a precedent that’s on the record with their customer.