Do you expect results?9th February 2015
When I pay for a service I expect results.
In the PR industry, however, it appears that results are sometimes of secondary importance. Often, instead of demonstrating the value they’re delivering through results, PR agencies simply justify their existence by reporting where their time has been spent.
As a result, even if the PR agency is unsuccessful in its efforts to gain media coverage for a client, they still bill the client based on the time they have spent trying (and failing) to deliver.
The time versus results scenario was brought into focus by a recent exploratory survey that Clare PR commissioned, which was carried out by the Institute of Communications Studies at the University of Leeds. The survey investigated client management and billing practices in the PR industry*. It highlighted that there is a big emphasis on ‘time spent’ when it comes to the methodology of calculating fees, with 68% of PR agencies questioned using this approach.
Furthermore, only 40% of agencies always provided a service level agreement for their clients and just 21% said they always provided an estimate of the return of investment. How can it be acceptable for a professional industry to operate in a manner that shows such a worrying accountability gap between agencies and their clients?
During the 25 years that my consultancy has been in business, I have worked on a payment by results basis with my clients. Not only is this approach ethical, but it is mutually beneficial for both clients and agency.
The first step in the process is to look at the aims and objectives that the client is trying to achieve. Next we look at how PR can deliver against those objectives. We then agree on key performance indicators and, if I meet these targets, I get paid. The client also receives details of the level of service that I will deliver and has a clear outline of the estimated return on their investment. This simple procedure should not be alien to other public relations agencies, yet the survey shows that few adopt this model.
If agencies are simply charging on the basis of the time they invest in trying to deliver results rather than on the results themselves there is no real incentive for them to deliver on their promises, because they will still get paid.
Not only does this situation fail to provide clients with the service they are paying for but also reflects badly on the professional reputation of the PR industry too.
Public relations agencies must adopt a commercially sound and transparent approach when it comes to their relationships with clients. I would also urge business leaders who may be looking to engage the services of a PR agency to ensure that they have a clear indication of the expected results and of how they will be billed; otherwise their fees may simply be a lump sum used to help a PR agency to maintain its luxury office and overheads.
Comment from Stuart Hicks, marketing manager at Kemper System, a client of Clare PR for a number of years:
“Ultimately you want your PR Agency to deliver results against realistic objectives that both you and your agency believe can be achieved. The way you pay your agency should reflect the results they achieve and be supported by the contract you have with the agency. Both parties need to be comfortable in the relationship. And if service levels or results drop, you need to be in a position to quickly reassess any contractual commitments you have entered in to. I’ve worked with Clare PR for a number of years and they have never failed to deliver results with a tangible, value for money, return on investment.”
*101 people responded to the survey with 92 completing it in full. Just over half the respondents (55%) were based in London and the South East of England, with the remainder distributed roughly across the UK.