independent publishers: where to cut back, where to invest
TRANSCRIPT
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Independent Publishers:
Operating in 2010 and Beyond
Where to Cut Back,
Where to Invest-- Frank FinnBriefings Media Group, LLC
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About Briefings Media Group
Diversified B2B publishing & training company
Headquartered in Richmond, Va.
Product Lines: Magazines
Newsletters
Training Events, audio conferences, videos,online courses
Database directories
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About Briefings Media Group
Markets/audiences served include:
Hospitality
Human resources Industrial safety
Apparel
Business management and communications
Healthcare facility managers
Residential painting contractors
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About Briefings Media Group
Products include:
Communication Briefings newsletter
Workplace HR & Safetyezine
American Painting Contractormagazine
FacilityCare magazine
The Organized Executive newsletter
Trend Letternewsletter
MeetingPlannerLists.com
Audio conferences and in-person events
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The Challenge
Eagle or Turkey?Feed or Starve?
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Words to Manage By
Cutting back is okay, but you have to know
which aspects of your business are worth
reducing and which require further
investment, even in a down economy.
--George Green
e5 Global Media
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Cost Control: Magazines
Advertising is primary revenue source
Keep costs in line with revenues using
Required Cost Reduction (RCR) Calculator Publisher must recoup a portion of ad revenue
miss
Process applied issue-by-issue Finance department monitors compliance
with cuts
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The RCR Calculator
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The RCR Process: Step 1
Calculate the Ad Sales Miss
Name Budget Sales Variance %
Jim $50,000 $30,000 ($20,000) -40.0%
Mary $25,000 $22,000 ($3,000) -12.0%
Bob $20,000 $10,000 ($10,000) -50.0%
Total $95,000 $62,000 ($33,000) -34.7%
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The RCR Process: Step 2 How Much of the Miss to Cover with Cuts?
Name Budget Sales Variance %
Jim $50,000 $30,000 ($20,000) -40.0%
Mary $25,000 $22,000 ($3,000) -12.0%
Bob $20,000 $10,000 ($10,000) -50.0%
Total $95,000 $62,000 ($33,000) -34.7%
85% of variance from budget
$ (28,050)
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The RCR Process: Step 2 (cont.)
How Much to Cover with Cuts?
Considerations:
Set a Trigger Point (minimum 10% miss) Are Misses Unusual or Chronic?
Whats the Variance to Budget YTD?
Are You in Investment or Cutback Mode?
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The RCR Process: Step 3 Calculate Commission Savings
Commission plan: 3% of sales
85% of budget required to earn commission
Rep % of budgetC
omm.
Jim 60% $ -
Mary 88% $ 660
Bob 50% $ -
Total $ 660
Commission budget $ 2,850
SAVINGS $ 2,190
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The RCR Process: Step 4
Hunt Down Additional Savings
Print Costs
Postage Costs
Selling Expenses -
Circulation -
Marketing -
Editorial
Other
Total Commitments -
Variance to Requirement $ 2,190
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The RCR Process: Step 5
Track Cost Reduction Commitments
Publisher completes RCR spreadsheet
Finance makes sure cuts from future expensebudgets are delivered
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Why Use the RCR Process?
Focuses cost cuts in underperforming areas
Forces all departments to share the pain
Takes the drama out of a difficult situation
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WhereWere Investing
Products and Projects That Meet 3 Criteria:
#1. Generate quick return on cash outlays#2. Build parts of the business with long-term value
#3. Bottom-up ideas with buy-in from line managers
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WhereWere Investing
Newsletters
Subscription Acquisition Direct Mail
Target Net Profit Ratio of $.85 to $1.00
Result: Mailing less, but maintaining flow of new
subscribers and ancillary revenue
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WhereWere Investing
Database Directories
MeetingPlannerLists.com
Largest online source of qualified meeting & event
planners
In collaboration with leading industry association
Users search online database and buy leads for
immediate download
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WhereWere Investing
Audio Conferences
Inexpensive training alternative for customers
Format appeals across audiences HR managers
Finance & accounting managers
Safety compliance officers
Launched portal to offer partners programs ProfessionalDevelopmentUniversity.com
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The Future
Heres to soaring eaglesand fat turkeys!
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Thank You!
For a copy of this presentation and BMGs
Required Cost Reduction Spreadsheet,
contact:Frank Finn, EVP & COO
Briefings Media Group, LLC
[email protected] ext. 249