THE BEST PRACTICE CAMPAIGN: The Partnership Charter - The first in a series of guidelines designed to offer concrete direction to PR practitioners aiming to increase their professional standing

This is the first in a series of articles on best practice which

will appear on the pages of PR Week in the coming months. These

guidelines have been created as part of PR Week’s Best Practice campaign

that was launched in June with the support of the CBI’s Fit for the

Future initiative and the DTI. A compendium of all the coming best

practice guidelines will be published in January, 2001.

The intention is to provide illuminating advice on the management of

different facets of communications. In this first instance, the subject

is: what constitutes best practice in the area of client-agency

relationships?

The guidelines, which have been sponsored by Mediadisk, appear on the

following pages. They are, of course, useful in themselves. But the

process by which they came to be formulated is a fascinating one. At its

heart was an impassioned debate which involved some of the PR industry’s

leading lights with additional help from the marketing profession.

In trying to devise any set of guidelines that seek to espouse best

practice, credibility is key and the fact that the CBI and the DTI

support the points set out on these pages means a great deal in terms of

raising the campaign’s profile. Yet the acid test of whether best

practice recommendations have worth is whether they are considered

realistic and desirable by practitioners.

With this in mind, PR Week cast itself as a catalyst, seeking to trigger

and facilitate debate. The hard work was done by senior figures from

agencies and in-house teams who selflessly brought their expertise to

bear.

An initial meeting led to a first draft that was considered flawed, but

which raised some issues of crucial importance to maximising the

potential of client-agency relationships. Commitment and attention to

detail at a second meeting, followed by some further tweaking of the

revised text, saw the guidelines knocked into shape.

At first, the intention had been to draw up separate sets of guidelines

for clients and agencies. But once these appeared in black and white a

consensus developed that this was the wrong way to go about it. In

Ketchum chief executive James Maxwell’s words: it would be preferable to

offer a ’partnership tool’ that emphasised the high level of

co-operation necessary to get the best out of a relationship. This, the

practitioners felt, should be called the Partnership Charter.

But let’s begin at the beginning. Discussions kicked off by trying to

define what lies at the core of a fruitful client-agency

relationship.

PRCA chairman Adrian Wheeler spoke of ’the golden triangle,’ a phrase

used by his consultancy, GCI, to describe happiness at all points of a

client-agency relationship.

Obviously client-agency partnerships have less of an opportunity to

blossom if they start off on the wrong foot. Therefore it was necessary

to look at the pre-appointment stage of the relationship as well as all

that follows.

One bugbear shared by many was the trend of clients asking for full

competitive pitches from too many agencies. Shandwick Europe chief

executive Michael Murphy said: ’It’s sensible that we as an industry

should be more high-profile at getting clients to ask three firms to

pitch instead of six or seven.’

Everyone agreed that so-called ’chemistry meetings’ between client and

agency were a useful way of narrowing down pitch lists. It was less easy

to reach agreement on the matter of clients paying agencies a

contribution towards their pitching costs.

’I can live with a contribution to costs,’ said PricewaterhouseCoopers

director of marketing and communications, Roger White. Central Office of

Information business effectiveness manager Pat Johnstone added: ’A lot

of public sector organisations have no idea how much it costs an agency

to put forward a pitch.’ In the end, the formula settled upon for the

guidelines was that clients should be prepared to pay a reasonable

contribution towards the cost of a pitch that involved substantial

creative and strategic work by the agencies.

Another thorny issue at the appointment stage was payment to

unsuccessful agencies for use of their ideas by a client. Ketchum

director Richard Houghton cited a client company in the automotive

sector that had paid his agency pounds 10,000 for an idea that it wished

to use, despite preferring not to appoint the agency that came up with

it.

This is the kind of responsible client behaviour that typifies best

practice.

Essentially, the intellectual property of creative ideas presented in a

pitch belongs to the agency, until or unless it is hired. Should a

client wish to use an idea offered by an agency but opt not to hire that

agency, discussions should be held to agree a figure that compensates

the agency appropriately for its idea.

No one was in any doubt that a comprehensive brief with clearly stated

objectives and anticipated outcomes was the foundation on which a

successful partnership could be built. The more time and information a

client is prepared to put into the brief, the more productive, creative

and to the point the agency response will be. Moreover, for really

worthwhile results, agencies should be given at least two weeks to

respond to a brief.

The need for a good brief becomes even more important once an agency has

been retained. As Johnstone said: ’Accountability is down to how you

deliver your brief.’

This means that measurable objectives must be set at the outset - as an

inseparable part of the PR campaign planning process - so that the

effectiveness of programmes can be accurately evaluated. Clearly,

provision for research and evaluation within budgets will vary,

dependent upon the size and nature of a particular programme. However,

the sentiment among practitioners was that 10 per cent of budget - as

campaigned for by PR Week’s Proof initiative - was a reasonable figure.

Returning to the issue of charging, there was agreement that any success

fees should be tied in to agencies achieving specific, measurable

objectives. In order for this to work there needs to be utter clarity

from the client as to what constitutes the criteria for success.

BT manager of marketing services purchasing, Steve Sargent, argued that

there was no point trying to reinvent the wheel and that the guidelines

should recommend the use of the Public Relations Research and Evaluation

Toolkit as a means of achieving best practice when measuring PR

effectiveness.

Sargent also argued that clients should bring some of the rigour they

used in purchasing other marketing services into hiring and managing PR

agencies.

The contract between client and agency underpins their partnership. If

there is a delay in getting it signed this can cause all sorts of

problems.

Shandwick Welbeck managing director Claire Davidson said: ’If you want

to manage your client relationship you need some form of contract,

promptly signed.’

The tricky matter of potential conflicts of interest came under

discussion too. This was resolved fairly quickly, with all practitioners

present happy that ’conflict should be defined by the client at the

credentials stage’.

In order to keep a strong grip on their reputation, client companies

need to foster the commitment of their senior management to PR. If

senior staff at the client company make themselves available to the

agency team this greatly helps them understand the corporate culture and

decision-making process. Again, this is one of the cornerstones of a

proper partnership.

Extending the concept of partnership further still, it was felt that one

point in the guidelines should encourage regular joint briefings that

bring the PR agency together with other marketing services agencies -

advertising, direct marketing, sales promotion, media specialists etc -

working on the client’s business.

When the issue of price transparency was raised, the animated reactions

of everyone at the table made it immediately clear that this was one

issue that would need to be tackled. It was soon evident that it might

not be all that straightforward to formulate into best practice.

While there was agreement that charging transparency was a good thing,

some practitioners were keen to ensure that this would not be distilled

down into advice that prescribed only hourly charge-out rates. The

focus, it was felt, should be more on quality of output, with success

fees to be encouraged where appropriate as a means of incentivising an

agency and helping the client meet its objectives.

Not surprisingly, Chime Communications chairman Tim Bell was trenchant

on this point, arguing that while hourly rates might be a sensible tool

for managing a PR business they were not always a good basis for

charging clients. He said: ’Hourly rates assume that if somebody is

younger, or less senior, what they do is worth less. That’s part of the

reason why this whole industry is so undervalued and underpaid. What we

should be selling clients is the quality of work we do and we should be

paid for the quality of the results - naturally with some basic

retainer, otherwise we all go out of business.’

H&K chairman David McLaren put it another way: ’Agencies should

constantly remember that time does not necessarily equal value.’

In a related issue, there was also concern that client expectations were

being distorted by agencies ’over-servicing’ accounts. Houghton said:

’Let’s be honest about it, over-servicing means giving your expertise

away for free.’ A situation which in the eyes of the client clearly

devalues the quality of advice on offer - in that, if a consultancy

prizes its time and skills so lightly that it occasionally gives them

gratis, the seeds of doubt will be sown as to what they are really

worth.

It was agreed that the guidelines ought to spell out the fact that

retained agencies should not offer clients their time or expertise for

free. Should an agreed budget have been exhausted, or a client ask its

agency to undertake activity not foreseen when the budget was discussed,

extra and appropriate payment should be agreed to cover the time and

expertise required. The phrase over-servicing does not appear in the

guidelines because as a euphemism for free advice it was deemed to have

no purpose. Ideally it should be struck from PR practitioners’

vocabulary.

Although all responsible clients will try to keep their agency costs

under control, PricewaterhouseCoopers marketing and communications

director Roger White conceded there should be a recognition that ’an

agency has an expectation to make a reasonable margin.’ There was a

brief discussion as to whether the size of a ’reasonable’ margin should

be defined in the guidelines - with figures of 15-20 per cent bandied

about - but the majority view was that putting figures in would only

cloud the issue as there is no such thing as a standard profit margin

that would fit agencies of different sizes and varying ownership

structures.

In addition to outlining best practice, McLaren suggested that a list of

10 things that could ruin a client-agency relationship might also be

useful. Other practitioners were supportive of this view and so our

guidelines come appended with 10 examples of worst practice.

McLaren was particularly aggrieved about client poaching of agency

personnel which he feared was ’increasing exponentially’, especially

within the dot.com sector. Other definite no-nos included difficulty in

contacting the right person, high staff turnover, late payment and

allocating account teams that bear little or no resemblance to the team

that pitched for the client’s business.

Overall, there was plenty of soul-searching as to how to make the

guidelines useful to as wide an audience as possible. The hope is that

they have indeed met this objective, but everyone was aware that

comprehensive though the end result is, it is not a panacea.

’You can only create best practice from the biggest examples,’ said

Bell.

’You’ll never write a set of guidelines that applies to every

situation.’

The massive disparity in the size, nature and business sectors of both

client companies and PR consultancies made getting the right tone for

the guidelines one of the most difficult tasks. Disparity also made it

hard to gauge what to include and what to omit.

What market leaders do as a matter of course may not be the case with

smaller players. The desire was to avoid sounding patronising but at the

same time ensure that nothing was left out that might be helpful in

improving a client-agency relationship somewhere.

It may be that a few points appear trite and obvious to the more

sophisticated operators in the business. But as Bell said while

considering this problem, we have to ask ourselves why they need saying.

The answer to this question is simple: they are not universally carried

out. Were they to be, there would be many healthier relationships than

there are today.

Best practice cannot be foisted on an industry. Fortunately, every

indication is that it will be welcomed with open arms because it is of

benefit to both clients and agencies.

There will always be relationships that fail but it is the hope of those

practitioners who drafted these guidelines that fewer client-agency

partnerships will come unstuck because of deficiencies in working

practices that could easily have been resolved. It all boils down to

realistic expectations, achievable goals, prudent relationship

management and delivering results.

The next set of Best Practice guidelines on the use of new media will be

published on 4 February. Further details of the Best Practice campaign

can be found at www.prweekuk.com and comments can be e-mailed to

best.practice@haynet.com.

AVOID AT ALL COSTS

10 Things That Can Ruin A Relationship

1 Poaching staff.

2 Failure to achieve agreed objectives.

3 Dishonesty and evasion.

4 Difficulty contacting the right person.

5 High staff turnover.

6 Repeatedly ignoring advice given.

7 Late payment of fees/reimbursement of expenses.

8 Lack of transparency on charges.

9 Irrational changing of objectives.

10 Account team bearing little or no resemblance to the team that

pitched for the client’s business.

THE PARTNERSHIP CHARTER - PITCHING

Prior to appointment

- Clients should ask agencies for their credentials: published

information that they supply to new business prospects. Often this

extends to a no-cost presentation of the agency’s capabilities.

- Put a low limit on the number of agencies invited to make formal

presentations.

Ideally, no more than three or four agencies should take part in a

competitive pitch. However, beginning with a long credentials list is

eminently sensible.

- So-called ’chemistry meetings’ are a useful means for clients to

narrow down their pitch lists. Informal get-togethers between client and

agency staff are a good way of working out whether people and business

cultures are compatible.

- There should be a comprehensive brief with clearly stated measurable

objectives and anticipated outcomes.

- The more guidance and information a client is prepared to put into the

brief, the more productive, creative and to the point the agency

response will be.

- Give agencies at least two weeks to respond to a brief.

- A good brief should include the following: a history of the

organisation including its goals, structure, strategy, culture and key

people; the size and nature of the market it operates in and the

standing of the organisation within that market; identification of

competitors and strengths and weaknesses in relation to them; problem

areas or markets; other issues of concern; and identification of

communication target audiences.

- Clients should make relevant research available to agencies at pitch

stage.

- Pitches should never be held if a client does not have a budget

allocated for a PR programme.

- Where substantial strategic and creative work is required for a pitch,

clients should be prepared to pay a reasonable contribution to costs to

the unsuccessful agencies. Such contributions should not be viewed as a

way of reducing agency risk but rather as a means of fostering better

quality ideas and programmes.

Creative Copyright

- The intellectual property of creative ideas presented in a pitch

belongs to the agency, until or unless it is hired. Should a client wish

to use an idea offered by an agency but opt not to hire that agency, the

agency should enter into discussions to secure appropriate recompense

for the use of its intellectual property.

THE PARTNERSHIP CHARTER - BUDGETS AND EFFICIENCY

Budgets and Charging

- Budgets should include provision for research and evaluation. PR

Week’s Proof initiative suggests 10 per cent of budget as a guide.

- If the agreed budget has been exhausted, or if the client wants the

agency to undertake activity not foreseen when the budget was discussed,

extra and appropriate payment should be agreed.

- There should be total transparency in agency charging to avoid giving

the client any nasty surprises.

- Fees should be submitted monthly or quarterly in advance, except for

public sector clients where payment in arrears is the norm.

- Any success fees should be tied in to specific, measurable

objectives.

- Expenses for work on client programmes should be charged monthly in

arrears, against agreed budgets.

- All handling charges (mark-up) should be made crystal clear.

Efficiency and Effectiveness

- Measurable objectives need to be set so that the effectiveness of

programmes can be evaluated. Research and evaluation should not be a

retrospective justification for PR. Research and evaluation should be an

inseparable part of the PR campaign planning process.

- Not everything can or should be measured. If a PR programme has

wrought change it is important to know why things have changed and to

what extent rather than merely that change has occurred.

- Use the Public Relations Research and Evaluation Toolkit, as developed

by the IPR and PRCA.

- Regular reviews should be held at which agency and client review

objectives and if necessary reset benchmarks for evaluation. Objectives

should be flexible enough to adapt to changing circumstances.

- Progress reviews should be part of a system for continuous management

of PR programmes which allows clients to keep track of activity

undertaken in their name, results achieved and budget status.

- If the communications remit is extended (to cover new products, brands

or different forms of PR) agencies should ensure they are thoroughly

briefed on their enhanced role by the client, that a sufficient budget

is allocated for these new responsibilities and that all changes are

agreed in writing.

- Senior staff at the client company should make themselves available to

the agency. This helps agencies understand the corporate culture and

decision-making process.

- Ideally the business relationship will be more akin to a partnership

than a client-supplier situation. But remember, some clients choose to

work more closely with their agencies than others. Some want strategic

advice, others just implementation.

- All PR activity should be planned and managed carefully, but clients

must be prepared to act quickly if their agency advises it is in their

interest to do so.

- Clear guidelines must be agreed as to which persons at the client

company are authorised to act as spokespersons. It must also be made

clear which person or persons has/have the authority to sign-off written

and other materials presented by the agency for use in PR activity.

- The limits to an agency’s authority on a given brief should be made

clear so that its staff know the situations in which they need to get

client clearance.

- Regular joint briefings that bring the PR agency together with other

marketing services agencies (advertising, direct marketing, sales

promotion, media specialists, new media hotshops etc) offer a useful way

in which to share ideas and may assist in fine-tuning PR and broader

marketing/communications strategy.

THE PARTNERSHIP CHARTER - THE BASIC REQUIREMENTS

Ethical Behaviour

- Agencies must inform a client before accepting an assignment from any

other client organisation whose business or products are in direct

competition with those of the client. Conflict should be defined by the

client at the credentials stage.

- There is a duty not to disclose without a client’s permission any

confidential information supplied to them by the client, including

studies or surveys commissioned and paid for by the client. This

obligation applies both during and after an agency’s term of

appointment.

- Clients should not subject retained agencies to competitive review

merely for the sake of it. If there is a problem with the relationship

or new thinking is required, these issues should be discussed.

- Payment of fees and expenses should be within 30 days of receipt of

invoice.

Contracts

- It is impossible to manage a client-agency relationship properly

without having a signed contract in place.

- The date at which a contract commences should be made clear.

- In the case of clients that use agencies on other than the specified

brands, products or services, or for a different PR remit, the contract

should establish the sole appointment of the new agency for its

designated tasks. Clients should be willing to agree not to use another

agency to carry out services that an agency has been contracted to

undertake.

- The contract should be drafted in such a way that it allows either

party to terminate it ’without prejudice’ if either side breaks any

important agreements set out in the contract or if one party goes into

liquidation or receivership.

- If a client-agency retained relationship is to be terminated, at least

three months’ notice should be given in writing, or three months’

payment given in lieu of notice.

- Before terminating a contract due to breach of agreement, constructive

discussion should take place with a view to resolving the situation.

Fourteen days is considered a reasonable amount of time for such

discussion.

- Agencies should be free to use any general marketing or market

intelligence gained during the course of their appointment for planning

and implementing campaigns, as long as the client does not object.

THE PARTNERSHIP CHARTER - AGENCY GUIDELINES

Points Specific To Agencies

- Cost communications programmes properly, including the profit margin

you wish to make. This then becomes the basis for sensible discussion

about budget.

- The amount of time that staff spend on an account should be monitored

closely to ensure that it does not become an unprofitable piece of

business.

If payment proves to be insufficient for the job in hand, try to

re-negotiate the budget to a more appropriate level with the client.

- Hourly staff charge-out rates are very useful for internal business

management purposes. However, agencies should also build into their

charging structures costs for factors such as 24-hour availability,

market expertise and, where appropriate, success bonuses. Agencies are

not just selling time, they are selling their ability to deliver

results, which should be an important factor when costing

programmes.

- Manage expectations by constructively challenging what clients say

they want from a relationship to make sure that in the end they really

do get what they want.

THE PARTNERSHIP CHARTER - CLIENT GUIDELINES

Points Specific To Clients

- Before approaching agencies, clarify for yourself why you believe you

require agency support.

- Establish expectations from the outset by being clear on what is

wanted from the relationship.

- Look hard for areas open to misinterpretation in a brief. Try to make

sure all pitching agencies understand the brief fully.

- All necessary internal approvals should have been secured prior to

releasing a brief to agencies.

- Should a client have trouble formulating a written brief on its own

for a specific programme it should ask for input from its agency,

although it should never hand over full responsibility for a brief. Once

a satisfactory brief has been written, the client should sign it

off.

- Strategic programmes cannot be developed overnight. Err on the side of

briefing agencies too soon, rather than too late. Last minute briefings

can mean lost opportunities.

- Try to supply PR agencies with as much information as they need. In

order to give the best advice, agencies need to have the full

picture.

Access to the ’information loop’ of top management and knowledge of any

proposed important business changes will enable all PR implications to

be fully explored by an agency.

- Recognise that agencies are entitled to make healthy profit

margins.

- Encourage agencies to advise candidly, without fear of penalty, even

where the advice they give is not to the liking of the client’s

management.

- Be prepared to pay a premium for genuinely superb creative ideas that

exceed expectations.

- Unless you are willing to recompense agencies for any expenses

immediately, you should be prepared to pay handling charges to cover the

cost to agencies of managing cash-flow on your business or purchasing

goods and services on your behalf.