EDITORIAL: Risk equals profits, finds PRCA survey

The PRCA Benchmarking survey findings present PR agencies with an

interesting dilemma. At a time when some client companies, and in

particular those with American parentage, may be considering tightening

their belts in terms of marketing spend, it would be only understandable

for consultants to seek the increased security of a retainer

contract.



However, the PRCA survey proves quite conclusively that risk equals

profits, with firms with more than 50 per cent of clients on a safe and

secure flat fee deal operating on margins below ten per cent.



By contrast, those firms more willing to espouse project work and

performance related deals are more likely to work on margins above 20

per cent. This will come as no great surprise to those firms who put in

place appropriate charging structures for strategic consultancy.



This year's survey indicated a slightly higher level of retainer

contracts among PRCA members. However, it is the confidence to take

risks, charge appropriate fees and to maximise the potential of

strategic consultancy at a crucial time for all client sectors, that

will prevent the industry talking itself into a recession.



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