Frank E. Kavenik “Increasing Revenue Using RadioMetrics-DSS™”

Market leaders like Amazon, Netflix, and K-LOVE use Data Science to grow and prosper.  Using Data Science, they Measure what matters, and Manage what they measure.

RadioMetrics-DSS™ is a strategic planning system based on data science that helps increase radio station and radio network revenue.  There are five primary ways to increase revenue for a radio station or network.  The RadioMetrics-DSS Data Science System helps increase revenue by managing and improving the five Primary Growth Factors and the five associated Key Performance Indicators.   RadioMetrics-DSS can help you increase revenue and accomplish more of your goals and objectives.  

 

 

 

 

 

 

 

 

RadioMetrics-DSS™ Revenue Growth Cycle

In 2002, the General Manager of the Oakland Athletics, Billy Beane, used the SABRmetrics Data Science System to win more baseball games than teams with much larger budgets.  Beane invested in players using the newly developed Key Performance Indicators that SABRmetrics had proven mathematically to win more baseball games. 

To remain competitive, other teams also adopted the SABRmetrics Data Science System.  Billy Beane used SABRmetrics to measure what mattered, and manage what he measured.  In 2002 Oakland won 20 consecutive games and finished first in the American League West.  The team’s breakout success using the SABRmetrics data science system is the basis for the best-selling book and hit movie Moneyball.

In 2002, K-LOVE CEO Dick Jenkins was using Data Science to increase signal coverage, listening audience, and donor revenue for the K-LOVE radio network.   Dick measured what mattered, and managed what he measured. 

The K-LOVE radio network started with just one station in 1982.   By 2019, K-LOVE and Air 1 were reporting over $200 million in revenue.   As a radio consultant, Dick Jenkins now helps other radio stations and networks grow and prosper as he did at K-LOVE.  Dick’s e-mail is [email protected]

Like SABRmetrics for baseball, RadioMetrics-DSS is a powerful Data Science-based system developed for use by radio stations and networks.  RadioMetrics-DSS provides the metrics to increase revenue, audience, and coverage, reaching more listeners for Christ.

RadioMetrics-DSS drives your long-term Growth Cycle through compound annual growth.  RadioMetrics-DSS defines and quantifies the five Primary Growth Factors and the associated five Key Performance Indicators (KPIs) for your radio network or station.

A listener-supported radio station or network grows through five Primary Growth Factors:

  1. Signal Development – Growing signal coverage.
  2. Market Development – Growing market awareness.
  3. Program Development – Growing program effectiveness.
  4. Pledge Development – Growing pledges to provide support.
  5. Gift Development – Growing gifts received.

Five Key Performance Indicators (KPIs) help balance the allocation of resources to maximize growth:

  1. Signal Development: KPI1 = (Target Listeners Covered)/(Capital Dollars Invested)
  2. Market Development: KPI2 = (Cume Listeners)/(Target Listeners Covered)
  3. Program Development: KPI3 = (P1 Listeners)/(Cume Listeners)
  4. Pledge Development: KPI4 = (Pledged Dollars)/(P1 Listeners)
  5. Gift Development: KPI5 = (Gift Dollars)/(Pledged Dollars)

RadioMetrics-DSS provides actionable data and information to help leaders allocate resources in a manner that maximizes coverage, listenership, and donorship.   The resulting increase in donor revenue enables additional capital investment in Signal Development to expand your network or station even further, driving your Growth Cycle. 

Listed below for each of the five Growth Factors and KPIs are examples of the types of investments you might make to grow your station or network using RadioMetrics-DSS.

 

  1. Signal Development: KPI1 = (Target Listeners Covered)/(Capital Dollars Invested)

The goal of Signal Development is to invest financial resources to increase the ratio of target listeners covered to capital dollars invested.   Note that the goal is to increase the number of target listeners covered.   That is not necessarily the same as increasing the number of persons covered.    

For further information on Donor-Based Signal Development see “Forecasting Donor Revenue For Purchasing A New Radio Station – Five Methods” HERE

 

Examples of possible high Return-on-Investment opportunities for Signal Development may include:

  • Investing in higher quality audio processing systems,
  • Purchasing more reliable transmitters,
  • Installing backup equipment and transmitters,
  • Installing backup power generators,
  • Upgrading antenna systems,
  • Retuning existing antenna systems,
  • Remounting antenna systems (FM stations),
  • Repairing or replacing antenna ground systems (AM stations),
  • Relocating transmitter sites to cover more target listeners, and
  • Investing in additional signals to cover more target listeners.

Improving your Signal Development KPI1 usually requires making long-term capital investments.  Using RadioMetrics-DSS, you can calculate the resultant increase in donor revenue and Return-on-Investment from each potential new capital investment.

 

  1. Market Development: KPI2 = (Cume Listeners)/(Target Listeners Covered)

The goal for your investments in Market Development is to increase your ratio of Cume listeners to target listeners covered.  Annual subscriptions to specialized software systems, services, and databases enable you to pre-identify your best prospective listeners and donors by name, address, giving capacity, and dozens of other donor-specific characteristics.

After building your detailed Market Development Model, you can then apply your model to your coverage area(s) to identify new prospects and high-value donors.  For further information see “Forecasting Donor Revenue For Purchasing A New Radio Station – Five Methods” HERE

You can use the name, address, and other identifying data that your Market Development Model generates to develop highly targeted and effective marketing campaigns to increase your Cume audience.  Examples may include highly targeted:

  • Direct mail postcards and letters,
  • Outbound phone calls,
  • Personal invitations to special events, and
  • Outdoor advertising.

The goal for Market Development is to increase the ratio of Cume listeners to target listeners covered.           

 

  1. Program Development:  KPI3 = (P1 Listeners)/(Cume Listeners)

The goal for Program Development is to increase the ratio of P1 “fan” listeners to Cume listeners.  The Program Development Model you develop helps improve your program format and grow your P1 audience.

Your Program Development Model provides actionable data and information on the characteristics and interests of your P1 listeners.  You can use that data and information to improve your format and increase your P1 listening audience.

Examples of improvements to your program format may include:

  • Selecting music or discussion topics of particular importance to your P1 listeners,
  • Presenting music or topics in a manner that increases relevancy to your P1 listeners, and
  • Designing your format to maximize the overall perceived benefit to your P1 listeners.

By quantifying the unique characteristics of your P1 audience, your Program Development Model also enables you to select optimized test audiences for auditorium testing of your format.  Systems and services like Dialsmith Perception Analyzer can provide you with actionable data and information on each component of your format.  

A detailed analysis of your ratings and streaming logs can also provide valuable data to help you improve your programming and grow your P1 fan audience.

 

  1. Pledge Development: KPI4 = (Pledged Dollars)/(P1 Listeners)

The goal for Pledge Development is to increase the ratio of pledged dollars to P1 fan listeners.   You accomplish this by developing a Pledge Development Model that identifies, quantifies, and prioritizes your pledge development growth factors.   These factors are derived from the comprehensive analysis of your previous pledge drives.

Your Pledge Development Model helps you increase your total dollars pledged by quantifying the optimal:

  • Length of each pledge drive,
  • Number of pledge drives each year,
  • Dates for each pledge drive,
  • Hourly goals for each day of each pledge drive,
  • Dollars goals for each station and community covered,
  • Number of pledge drive breaks each hour,
  • Length of each pledge drive break,
  • Timing of each pledge drive break,
  • Amount and number for each of your monthly pledge asks,
  • Amount and number for each of your 1x gift asks, and
  • Use of professional pledge drive consultants and personalities.

The strategic application of your Pledge Development Model will increase your ratio of total dollars pledged to P1 fan listeners.

 

  1. Gift Development: KPI5 = (Gift Dollars)/(Pledged Dollars)

Your goal for Gift Development is to increase your ratio of gift dollars received to total dollars pledged.  You maximize gift dollars received by developing and applying your comprehensive Gift Development Model.    Your Gift Development Model identifies which specific investments in donor engagement and gift development contribute the most to increases in the total gift dollars you receive and Total Lifetime Giving.

Effective donor segmentation is key to the success of your gift development investment strategy. If you are still using the classic Recency-Frequency-Money (RFM) methodology, you can increase your gift income by implementing the more modern and effective Propensity-to-Give (P2G) methodology.

The classic RFM method allocates gift development resources by looking at what your donors have given in the past.   The newer P2G methodology invests donor engagement resources more effectively by forecasting what your donors and prospects can give in the future with enhanced and targeted donor engagement. 

The P2G methodology will discover new high-value donors and prospects who will make larger donations.  P2G helps to increase Total Lifetime Giving for each donor.   P2G enables you to engage with new high-value prospects, even if they are not yet donors and were therefore invisible in the classic RFM methodology.

SIZE AND SPEED OF FIVE REVENUE OPPORTUNITIES

Each of your five primary growth factors has different revenue characteristics for size and speed. Typically Gift Development is the fastest short-term revenue opportunity, while Signal Development is the largest long-term revenue opportunity.  The size and speed of your particular revenue opportunities may vary from the norm.  The table below summarizes the typical size and speed of the five revenue opportunities:

 

 

 

 

 

Using RadioMetrics-DSS, you can allocate your resources among each of the five revenue opportunities to balance both your short-term and long-term goals and objectives.

If short-term cash flow is your immediate challenge, you may prioritize increased investment in Gift Development. 

If long-term revenue growth is your priority, you may prioritize increased investment in Signal Development. 

SUMMARY

RadioMetrics-DSS is a strategic planning system based on Data Science.  It equips radio executives to allocate resources in a more balanced and effective manner.  RadioMetrics-DSS empowers you to Measure what matters, and Manage what you measure.   

RadioMetrics-DSS enables you to increase your signal coverage, listening audience, and donor revenue.  By reinvesting a portion of your increased donor revenue into Signal Development, you can further grow your station or network.  Using RadioMetrics-DSS, you can repeat your growth cycle year after year, enabling continuous growth.

FREE ZOOM WEBINAR – Increasing Revenue using RadioMetrics-DSS

HisAir.Net Publisher Ted Semper and Revenue Scientist Frank Kavenik will host a free Zoom webinar about RadioMetrics-DSS on Thursday, March 25th at 8 AM PT, 11 AM ET.   To receive your invitation, send an e-mail to [email protected] with the keyword WEBINAR in the subject line.


Frank Kavenik is a Revenue Scientist who serves leaders of Christian radio networks.  He has completed over 900 Revenue Science projects to increase signal coverage, listening audience, and donor revenue for major networks. 

Frank invented and developed the RadioMetrics-DSS Data Science System to help radio stations and networks grow and prosper.  He holds degrees in law, management, and engineering.  Frank has also been a radio station founder and owner.  His LinkedIn profile is HERE

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