When PeopleSoft PR director Steve Swasey was with his previous employer, food company Tri-Valley Growers, he hired an agency that had ’a great national reputation and put on an amazing show, a full-blown presentation with all the big guns there,’ he says. But once the agency started doing the work, Swasey found himself always dealing with the junior staff - even when he called the senior people. Worse, he found out that the agency had also been working for one of his competitors without telling him.
When PeopleSoft PR director Steve Swasey was with his previous
employer, food company Tri-Valley Growers, he hired an agency that had
’a great national reputation and put on an amazing show, a full-blown
presentation with all the big guns there,’ he says. But once the agency
started doing the work, Swasey found himself always dealing with the
junior staff - even when he called the senior people. Worse, he found
out that the agency had also been working for one of his competitors
without telling him.
It’s a familiar story to most PR pros on the client side. And for every
tale like Swasey’s, there’s another five about the client who hired a PR
firm on the advice of a golf buddy and found himself six months down the
road with depleted coffers and no clips to show for it.
Let’s face it: hiring a PR firm is a risky business, and there’s no
one-size-fits-all recipe for achieving success without getting
burned.
And the rules of this game have changed significantly in recent
years.
As the dot-com boom has driven demand for agency services through the
roof, and with PR suddenly deemed the golden child of the marketing mix
by VCs and entrepreneurs, the shoe has shifted to the other foot when it
comes to new business. No longer do client companies - even those with
million-dollar-plus budgets - call all the shots. In fact, in San
Francisco and Silicon Valley, typically it’s the prospective client that
needs to audition for a slot on the roster of some of the area’s hottest
hi-tech PR shops.
Agencies are beginning to eschew the traditional, multistep,
request-for-proposal process when other potentially profitable and
less-demanding clients are waiting in the wings. And for clients, the
whole idea of conducting extensive reviews has become synonymous with
so-called Old Economy thinking. ’When you need to move quickly, you
really need to devote the time to identifying your company’s needs, the
role the PR firm can play for you and possible agencies - not on the
steps involved in writing a formal RFP,’ says Debby Fry Wilson. Fry
Wilson completed an exhaustive search for her former employer,
Drugstore.com, just before she left in May to join CarOrder.com as SVP
of corporate communications.
At the same time, not every client is an IPO-eager start-up. And as
agencies begin to reconsider the get-rich-quick, account-churning
practices of 1999 and instead concentrate on reeling in more solid
corporate clients, traditional bake-offs are reappearing. Luckily, there
are a few general, tried-and-true guidelines that still apply in hiring
a PR agency - for those who are able and willing to invest the time to
do it right.
Getting started
To adequately research and evaluate candidate firms and to check
relevant client references - in addition to allowing the agencies enough
time to prepare substantive presentations - most experts say to allow at
least 10 to 12 weeks (or about 100 to 200 hours of staff time) from
start to finish. This kind of time frame also enables the bottom-line
needs assessment that most experts say is a critical and often-neglected
step.
’You should first develop a clear, concise description of your PR needs,
the characteristics and competencies you seek in an agency and the
criteria you will use in selecting the agency,’ offers Jerry Swerling,
principal of Swerling & Associates, a Marina del Rey, CA-based
consultancy that specializes in agency reviews. ’To do otherwise is to
run the risk of making indefensible decisions.’
It’s also smart to examine your objectives in hiring an agency. Are you
looking to get press, and if so, in what types of media? Are you seeking
assistance with message development and analyst relations? Do you need
to capture the attention of VCs to attract funding? Make sure you
consider only those agencies that specialize in the areas that can truly
help your organization reach these goals.
Be sure to separate the real needs from those attributes that simply
look good on paper. For example, do you really need international
capabilities?
Is it critical that this agency have industry-specific experience? If
your goal is to score national exposure in mainstream business
publications, for example, hiring a firm with great contacts at the
trades in your sector makes less sense than a generalist firm with a
proven track record in headline-making campaigns.
Finally, determining some sort of rough budget is necessary before
contacting any agencies. The candidates can’t be expected to come back
with realistic strategies if the expense parameters are out of whack.
’We’re in a creative business. It doesn’t do either side any good to
come up with something that would take a dollars 75,000-a-month budget
to implement when the client’s budget is dollars 20,000 a month,’ says
Terri Firebaugh, principal of Corinth, TX-based Firebaugh
Communications.
It’s also a good idea to secure agreement on the above by all of the
senior managers who will be affected by the PR function. ’This will help
to build consensus and avoid needless conflict and disagreement,’ says
Swerling, who generally interviews top-level execs (CEO, COO, CFO) along
with members of the marketing team. Topics they discuss before drawing
up a list of potential agencies include ’the ideal agency,’ past
experiences with other firms and what their expectations are.
The shortlist
It pays to know what’s going on in the agencies. PRWeek provides regular
news and insight into both the major firms and hot (and cold)
boutiques.
There are also many reference sources available online and offline to
assist in drawing up a long list. The PRSA Counselors’ Academy offers
The Red Book, a listing of the academy’s members, which is available in
hard copy and online at www.prsa-counselors.org. O’Dwyer’s Directory of
Public Relations Firms is also published in hard copy and as an online
reference tool at www.odwyerpr.com, where agencies are listed in
alphabetical order as well as by geographic location. Neither of these
two options enable blind electronic searches based on specific criteria,
however.
For this level of assistance, the Council of PR Firms’ ’Find a PR Firm’
service at www.prfirms.org is a better bet. The database enables client
companies to search for agencies based on factors such as location, size
(by revenue), international capabilities and service areas and
expertise.
Similarly, the PR Central Web site (www.prcentral.com) hosts a variety
of agency-finder resources, including a searchable database of
firms.
A note of caution: neither PR Central nor CPRF’s screening tool seems to
be 100% accurate in its search results. For example, on a search of PR
Central’s database, where ’San Francisco/Silicon Valley,’ ’Public
Affairs’ and ’Crisis Management’ fields were specified, three hi-tech
firms (Niehaus Ryan Wong, The Horn Group and Applied Communications) and
one food specialist agency appeared, while the tool omitted GCI
Kamer-Singer or any of the other well-known Bay Area crisis experts.
PRWeek will be offering a more comprehensive search service to be
launched early next year as part of its new Web site.
An alternative service, which is free to clients seeking PR firms, is
Agencyfinder.com, an online, searchable database of about 4,000
advertising, marcom and PR agencies. Pre-screened and pre-qualified
agencies pay to be included in this listing. After an initial field of
candidates is drawn up, an Agencyfinder.com representative contacts
client organizations for further assessment of their needs; at that
point, you can request a packet of essays completed by several agencies.
Based on these essays, you can select a handful of ’best matches,’ and
the Agencyfinder reps arrange a face-to-face meeting.
Along these lines, it can be advantageous for some clients - especially
those with limited time to invest in search activities - to hire a
full-blown agency consultant who has a working knowledge and an
invaluable database of current PR firms (see sidebar on page 27).
Many client-side PR pros, however, still believe that the best sources
for agency information are personal networking and the community at
large.
Look at companies, even competitors, and see who represents them (either
call the company’s PR contact and ask directly or sleuth it off a press
release posted on the newswires). You can also look at those agencies
that have won recent industry awards for similar types of campaigns -
for example, Bulldog Reporter’s Media Relations Awards, PRSA’s Silver
Anvil and PRWeek’s own PRWeek awards.
Many experts recommend asking analysts and journalists which PR firm
they prefer to deal with. ’You definitely want an agency that is going
to get its calls answered and that doesn’t have a reputation for
’flackery,’’ says PeopleSoft’s Swasey. Reed Byrum, director of corporate
communications for EDS, says that one Silicon Valley agency has burned
so many bridges with media contacts that it ’simply can’t do what they
promise.’
At the same time, keep in mind that comments from journalists can be
misleading. For example, who’s to say that it wasn’t one inexperienced
AE five years ago who soured a particular reporter on Agency X?
’I think you should only call journalists if you already have that
established relationship with a reporter, not just phoning someone up
out of the blue,’ advises Byrum.
Types of firms to consider
In determining what types of agencies to consider, avoid the ’usual
suspects’ syndrome. Don’t consider only the major agencies in your
backyard or those known for major-name accounts, when a mid-size or
specialist agency could be a much better fit for your needs. Consider
looking at a selection known for different things - a mid-size
general-service firm, a boutique with an established reputation in your
industry or a boutique without direct industry experience, but a
reputation for outstanding creativity.
Some experts advise looking at agencies of comparable size, in which
most of the clients have budgets in the same range as your own. As G.A.
’Andy’ Marken, president of Marken Communications in San Jose, put it in
an article he wrote on hiring an agency: ’If the budget is large and the
agency is small, your objectives can suffer. If your budget is small and
the agency is large, you can get lost.’
You should be able to draw up a long list of 10 to 12 agencies for
consideration.
While you could start sending out RFPs at this time, it’s generally
better to avoid the cattle-call approach, which requires agencies to
jump through many hoops before they have even made the short list.
To narrow your selection further, do some gumshoe work on the Internet,
checking out an agency’s Web site to look over case histories, basic
capabilities, bios of agency principals and a client list. But don’t be
fooled into thinking every company that appears on an agency roster is
an active, full-time client. Often agencies keep old clients on the site
months or even years after that company has moved on to another firm.
Sometimes the agency has done only one project for a listed company.
After some online snooping, pick up the phone and call the agency
principals to gauge their interest level in your business and/or their
capacity to take on new accounts. Find out any potential client
conflicts and ask about minimum monthly retainers or annual fees.
When you have decided on the top six or eight firms from the original
list, develop and distribute to them a comprehensive questionnaire,
requesting detailed information on proposed account teams, capabilities,
case studies and client references. Allow enough time for the agencies
to complete the task sufficiently, then, using a uniform scoring
process, choose the top four to six semifinalists from these
submissions. Then schedule meetings with them at their offices.
Paying a visit
This agency on-site meeting is not optional but ’critical,’ according to
Chris Hosford, corporate communications director at Hyundai. ’Recently,
we had five finalists in our search for a national agency, and when we
visited one of the firm’s local Los Angeles offices, we found out they
only had two full-time people there,’ reveals Hosford, who has hired
four PR firms in the past 18 months. ’That’s something we never would
have found out otherwise.’
Hosford also recommends scheduling a meeting in the morning or late
afternoon to evaluate what he calls ’the pace of agency culture.’ ’If
it’s 9:00 am and people are still milling around, getting coffee and
chatting, or if it’s five-thirty and the whole office has left for the
day, that tells you something,’ he says.
’Those ’just between us’ conversations you can have with the junior
staff and receptionists can tell you a lot,’ adds PeopleSoft’s Swasey,
who recently hired Phase II Strategies after an extensive review. ’And
when the top folks are out of the room, how do the rest of the staff
act?’
Reference checks
Once you have the names of clients on the agencies’ current rosters,
call some or all of them to ask about the firm’s methodology, track
record of results and other questions that might help determine the
amount of attention you can expect from the agencies as a client of your
size.
If you can, get in touch with some of the clients no longer working with
the agency. In fact, Jericho Communications CEO Eric Yaverbaum, who is
currently writing PR for Dummies, advises clients to ask which agencies
have fired them and why, even requesting the firm to turn over those
former clients as references. ’Everyone in this business has lost a
client and if they say they haven’t they’re lying,’ Yaverbaum explains.
’I believe in the warts-and-all approach: they should know everything
about us before hiring us.’
To RFP, RFQ or neither?
After reference checks and on-site meetings, you should be able to issue
either an RFP or RFQ (request for qualifications, sometimes called an
RFC, or request for credentials) to the top remaining two to four
candidates.
What to ask for in this final presentation depends on the type of agency
you are seeking, the nature of the assignment and what you will need to
feel comfortable and confident in your decision.
For organizations that have well-identified PR goals and needs, a
company- and industry-specific analysis of challenges and opportunities,
as well as a proposed plan of action to address these, can be a clear
way of delineating those firms best qualified and willing to start work
on the account immediately. Before you go about drafting a request for
this type of research-rich and detailed presentation, however, keep in
mind two things: first, most agencies today expect compensation for
their time and ideas on such labor-intensive plans. Second, you will
need to provide competing agencies with enough information about your
company and products so they can work from an accurate starting point.
While this can seem risky, especially with the losing agencies, it is
standard to require non-disclosure agreements from the competing
firms.
If the idea of opening the company coffers and releasing information on
future plans seems too risky for your organization, another pitch
strategy is to issue a sample creative challenge - either a single
hypothetical situation or one real client problem - and ask for
potential ideas on how to tackle it. Other in-house PR execs draw up a
relatively brief questionnaire designed to address issues and challenges
specific to the business.
Finally, some clients are content to query agencies about their baseline
capabilities and qualifications rather than require them to create a
program or problem solution from scratch. In fact, CPRF encourages
clients to issue an RFQ rather than an RFP.
’What clients should do is issue an RFQ and select the best firm based
on qualifications, understanding of the industry, track record,
chemistry and the proposed team,’ says Ron DeFore, principal of
Washington, DC-based Strat@Comm. ’Unfortunately, the standard fare is
the client issuing an RFP that attempts to spell out what their
challenge is. This is often not done well and sometimes they really have
not identified what they really need the most.’
No matter what form the presentations take, agencies should provide a
proposed team structure, bios for team members, examples of past work
and case studies and client references, as well as any other evidence of
relevant credentials and qualifications for the business. A good
proposal should also ideally include a timeline of proceedings and a
targeted start date.
Avoiding the dog-and-pony show
No matter what kind of presentation you are expecting, nearly everyone
agrees on one thing: make sure you don’t get taken in by a dog-and-pony
show. The best way to protect against being dazzled by glitz is to
specify that only the members of the account team - those that will be
working most often on your business - be present and participate in the
pitch.
’I always told agencies, ’Everyone coming to this presentation needs to
be on the account,’ and had them tell me exactly what each person would
be doing for my business,’ says Nancy Moss, managing director of Ruder
Finn/Boston and former global PR director for Reebok.
Make sure you question those lower-level execs as well. ’You can also
ask those at the AE level questions about things like target
publications,’ says Michelle Bowman, a PR agency training consultant who
spent many years with Waggener-Edstrom. ’For example, ’What do you think
of eCompany Now? How would you go about helping us get coverage
there?’’
Neil Myers, principal of Connect PR, a Provo, UT-based hi-tech agency,
even advises clients to ask for references on the account executives who
will serve your business and to nail down how many other clients they
each will be juggling at the same time as yours. Myers notes that more
than two clients are likely too much for your account to get the
attention it deserves.
If you are hiring a national or international agency, make sure the
local office directly handling your account has the appropriate
expertise. ’Lots of agencies say they will use the whole network, but
that doesn’t really happen, because they want to keep the revenues
within that home office. But you really need to have local expertise,’
points out EDS’ Byrum.
You should arrive at the presentation prepared with questions designed
to keep the agencies on-point and to test the validity of some of their
claims. Asking for case studies is not enough. You will need to ask
pointed questions regarding these ’success stories,’ such as, When did
this occur?
How many of the original members of that account team are still with the
agency? Or was this success achieved by an agency member while he or she
was with another firm?
Getting the truth behind the claims
Sitrick & Company technology practice head Lew Phelps, who has worked in
corporate positions for Southern Pacific Railway and other companies,
believes getting at the truth behind media claims requires such
questions as, What is their relationship with the local bureau of The
Wall Street Journal, Forbes or Business Week? Who’s the reporter who
covers this industry?
When was the last time you placed a story with that reporter? For what
client? What was the placement? Can we call the reporter to ask how he
or she likes dealing with you as a PR person/agency?
’That last one will scare a lot of people,’ says Phelps, who was a Wall
Street Journal reporter before he entered PR. ’It smokes out the phonies
who haven’t really done what they say they’ve done.’
Finally, watch out for full-blown, sophisticated presentations that look
just a little too slick. ’How could they possibly think out all of your
problems and gain an in-depth knowledge of your company and products so
quickly?’ observes Andy Marken. You’re probably seeing an off-the-shelf
template with names inserted.
But more likely, the problem will be an overwhelming similarity in the
pitches. ’It’s amazing how much all the agencies sound alike during any
pitch,’ says Moss of Ruder Finn. ’I always wanted just good, substantive
thinking about my business - not spec creative but just the ability to
comment on or contribute similar examples of something parallel to my
company’s situation.’
’What I have been looking for is a deep understanding of our business
and evidence of how well they have done their homework,’ says
Excite@Home senior corporate PR manager Alison Bowman, who was in the
midst of an agency review at press time. ’It’s amazing to me how many
agencies propose things we have already been doing for the past year and
then attach a dollars 100,000 price tag to it.’
Making a decision
Depending on what you have asked clients to bring to the table, making a
decision should come down to an evaluation of potential. For example, if
the agencies were asked to address a sample problem, were they
resourceful with their research given the limited time and information
provided? Did they come up with a strategic or original approach? Did
they clearly illustrate how their program, approach or capabilities
would help your company achieve its PR and communications goals?
One big reason people give for hiring an agency is chemistry. How can
you test this factor? Hyundai’s Hosford says to ask yourself, ’Are there
at least one or two people in this room I would feel comfortable telling
my company’s deepest, darkest secrets?’ Dan Collins, senior media
relations manager for Mercy Medical Center, points out that chemistry is
a two-way street. ’You need to look inside your own organization to see
if you have the right people to work well with this particular
agency.’
If you’re still wavering on a final decision, keep in mind that you
could hire the leading agency to perform a closed-end project, such as
writing a plan or handling a single announcement, as a test-drive before
buying the Cadillac, so to speak.
Once you’ve made a final decision, you should be sure to notify the
other agencies in play, typically via a personal call to the principals.
It’s a good idea to provide them with some detail regarding how the
selection was made and why their agency wasn’t chosen. This is proper
etiquette that might help them pitch more successfully for other
business, and it also buys goodwill for you, the client, who may at some
point have to go back to the runner-up agencies for other projects or in
the event that the finalist doesn’t work out.
Once you’ve selected the winning team and notified the runners-up, it’s
time to get the agreement in writing. While most agencies will charge
ahead on the work prior to a formal contract signing, don’t
underestimate the importance of this final step, which often takes at
least four weeks to complete.
’These are very serious legal agreements, and agencies need to recognize
this,’ says PeopleSoft’s Swasey. ’You can draw up a simple letter of
agreement presented by an AE, but that’s not right.’
Not surprisingly, it’s often clients who prefer relatively simple
letters of agreement, but for agencies contracts are their best
insurance against getting burned. At the very least, all contracts
should address compensation (terms of payment, fees and/or monthly
retainer), expenses (see sidebar on page 29) and how the relationship
will be dissolved, if it should come to that.
At a time when so many companies are talking about working in ’Internet
time’ and looking to boost efficiency, the temptation to cut corners
during an agency search is stronger than ever. Experience shows,
however, that skipping steps in the process can lead to huge
dissatisfaction down the road - and a greater waste of time overall if
you are forced to start again from scratch with a new agency six months
later. Obviously, the wisest course is to take the time to find the
right agency from the beginning.
Q&A: SOME BASIC QUESTIONS YOU SHOULD ASK AGENCIES AND YOURSELF
What to ask agencies at the pitch:
Will the people here today be the people on my account? If so, what will
each be doing for my business?
How many other accounts do each of these team members currently work
on?
How do you differentiate yourself from other agencies in your space?
What publications do you think are good for our company and why?
How do you intend to get up to speed on our business, and how much of
this time will you bill us for?
What kinds of documents will you need to see from within our
company?
What analysis will you do of our competitors?
How will the results of this program be measured?
How much will this program cost?
What to ask yourself in evaluating the pitches:
Does the agency know our market?
Does it understand and know the media that hit our target
buyers/audience?
Has it achieved success/results for others with similar assignments?
Can the agency’s culture work with our organization’s?
How important will our business be to this agency, i.e., how does our
budget compare to other clients’ on the roster?
Aimee Grove
FROM RETAINER TO EQUITY: THE MANY WAYS AGENCIES BILL
Type: Retainer
How it works: Client pays the agency a fixed monthly fee.
Who uses it: Fewer and fewer agencies, though some - especially more
tradition-bound firms - swear by its consistency and predictability.
Easier to carry off in IR than in marketing PR, some say.
Pros: For clients, a bargain if their agency over-services their
account.
For agencies, security in a monthly check from the client.
Cons: Retainers seem too rigid and stodgy for a volatile business world
where PR efforts must frequently change and adapt. Difficult to measure
PR achievements against client dollars spent.
Type: Hourly Rate
How it works: Agencies bill based on executives’ hourly fees and their
time spent on accounts.
Who uses it: The most common method, currently. Some firms bill hourly
against a retainer.
Pros: When paid by the hour, PR execs are less reluctant to innovate or
take on extra work. Clients can examine the relationship between the PR
firm’s accomplishments and the hours it bills.
Cons: For the agency, no work means no pay: pros must manage their time
more carefully. Agencies sometimes don’t charge for total hours worked
for fear of appearing to overbill. Clients often fear every syllable out
of a pro’s mouth is on the clock.
Type: Performance Billing
How it works: Agencies receive a bonus - or in some cases their entire
fee - depending on whether they deliver on media coverage or facilitate
things like a spike in product sales, bump in stock price or election to
office.
Who uses it: More talk about it than actually use it. Most common among
firms associated with ad agencies.
Pros: A pay-for-production billing schedule clarifies objectives and
costs and is relatively simple to set up. If the goal is media, hits are
easy to measure.
Cons: Linking PR efforts to product sales or stock price is fuzzy
science at best.
Type: ’Menu’-Based Billing How it works: Agencies bill a fixed fee for
each service they offer.
Who uses it: Sometimes adopted at firms whose founders came from the
client side and recall unpredictable and inscrutable PR invoices. Works
best when devoted to a particular industry sector.
Pros: Agency and client are in accord up front on each activity and its
fee. No time cards! The scramble to account for time is but a
memory.
Cons: Spontaneity is slightly hampered: every modification must be
approved by the client, or (in strictly observant agencies, at least)
it’s free.
The agency can’t recoup for unexpectedly time-consuming tasks.
Type: Stock Compensation
How it works: Agencies accept stock in client companies as payment. Most
common in strong economic times. Financial consultants typically advise
that PR firms at least cover their costs in cash.
Who uses it: Firms of all stripes, some in hopes of riding the stock to
higher heights, others as a gesture of solidarity with their
clients.
Pros: For agencies, the chance of a speculative score. For clients,
especially young companies, doling out stock conserves cash. It also
helps bind the agency’s fate to theirs.
Cons: See previous sentence. Also, agency stockholders must avoid the
appearance of counsel based on their interest rather than client’s.
James S. Bourne
A HELPING HAND: WORKING WITH AN AGENCY SEARCH CONSULTANT
When Richard Marshall joined Subaru of America as corporate
communications director last October, he faced the daunting task of
hiring a new national PR firm while ramping up in a new position and
building his own in-house team.
Knowing he needed assistance in running a full-blown review and seeking
up-to-date, firsthand knowledge of the agency marketplace, Marshall
hired Jerry Swerling, a Marina del Rey, CA search consultant who also
directs the PR sequence at USC’s Annenberg School of Communication.
’Jerry enabled all of us who were pressed for time to concentrate on the
job at hand, while at the same time really going into depth in
interviews with our team and agencies to find the perfect match for us,’
says Marshall.
’He also made the whole process very methodical, even for a relatively
accelerated review.’
The results: within eight weeks, Subaru had signed Ruder Finn/New York
as its agency of record - a firm Marshall admits may never have crossed
his radar if he had conducted the review himself.
When looking to hire a PR agency, working with agency search consultants
offers several advantages:
1 Uncovering lower-profile firms that may be better equipped to meet a
client’s needs than the big-name agencies on everyone else’s lists. For
example, Swerling helped steer Kinko’s toward Atlanta-based Duffey
Communications; what may have looked like an odd pairing has morphed
into a two-year relationship, he says.
2 Internal assessment - securing consensus among management and building
support for the new firm once on-board. For example, consultant Dennis
Spring of Spring Associates in New York generally sits down with up to
10 executives at the senior management level to determine the company’s
needs for a PR firm before drawing up a preliminary list. Such internal
assessment and consensus-building can help secure support from all
marketing and management team members on the final decision. They may
even result in avoiding a review at all - if the search consultant
determines that it is possible (and preferable) to retain the existing
PR firm.
3 Saving your - and your staff’s - time, from checking references,
writing RFPs, researching firms. Hiring a consultant enables clients ’to
remain 100% focused on their normal responsibilities without the
estimated 100-to-200-hour distraction the management of a review
typically entails. I take that burden off their shoulders,’ says
Swerling.
4 A dedicated and up-to-date knowledge of the existing and evolving
agency marketplace. In a time when M&A activity in PR is at an all-time
high, many clients are at a loss regarding who owns whom, the
implications surrounding such mergers (client conflicts, enhanced
capabilities) and any emerging players.
5 Objective, third-party perspective and solid methodology. Instead of
relying on gut feelings about chemistry (which can turn out to be
misleading later on) or being caught up in the fireworks of a flashy
pitch, clients are led to follow a more methodical and reliable system
for finding the right firm.
Admittedly, the services of a good search consultant don’t come
cheap.
Generally, fees can range from about dollars 15,000 to dollars 35,000
per search, depending on the complexity of the assignment and other
variables such as geography, industry sector, number of firms considered
and interviews involved.
To find a good agency search consultant, check with your local chapter
of the PRSA or with the Council of PR Firms, or see below for a select
number of well-known matchmakers. Most consultants do not specialize in
one particular industry sector over another, and most handle national
and local searches with no limitations regarding client location.
Dennis Spring Spring Associates, New York
www.springassociates.com
(212) 473 0013
Jerry Swerling Swerling Associates
Marina del Rey, CA
www.swerlingassociates.com
(310) 578 2462
Marie Raperto The Cantor Concern, New York
www.cantorconcern.com
(212) 333 3000
Charles Meyst Agencyfinder.com, Glen Allen, VA
www.agencyfinder.com
(804) 346 1812
Aimee Grove
IT’S YOUR DIME: KEEPING YOUR EYES ON YOUR PR EXPENSES
Many clients complain that although they know what their PR agencies are
supposed to be charging them, they are surprised to find extras added to
their bills. Unexpected costs are the number-one complaint clients have
with their agencies, according to PRWeek’s Corporate Survey (PRWeek,
Feb. 28, 2000). Experts say that specifying prices and setting up good
billing practices in the contract - especially for expenses and added-on
services - will help save money down the line.
’I noticed that once the contract was signed, PR agencies would spend a
lot of the time we were paying for trying to sell us marketing
services,’ says Michael Romanies, VP of marketing at Loislaw.com, a
legal research site. Romanies started requiring a 30-day cancellation
clause in his contracts.
’We hired a PR agency for PR services. Now we can specify that trying to
sell us marketing will jeopardize the relationship,’ he says.
Here are 10 tips on how to keep costs down and prices in check from the
start.
1 Before signing a contract, ask to see an invoice from the previous
month, preferably from a similar account. Not only will this allow you
to see the cost of various services, it will also give you an idea of
how organized the billing will be for your company’s account. ’I believe
a surprised client is an unhappy client,’ says Suzie Boland, president
of RFB Communications Group. ’There should be no mystery expenses. The
agency should be willing to provide you with a breakout, a detailed
description of every charge on your bill.’
2 Get a detailed listing of expected costs based on the agency’s
proposal, including an estimate for average monthly out-of-pocket
expenses. Then require that all expenditures be approved prior to
commencing each project. Verify that the work you are being billed for
is work being done only for your company. For example, PR agencies may
send one person to represent several companies at a trade show, so
billing should reflect shared expenses.
3 Know who is working on the account and each person’s hourly rate. ’The
primary partner may sign you on, but most of the work will be going to
lower-level associates. Know how much everyone costs,’ Romanies advises.
Be sure your billing statement will show a breakdown of each team
member’s work in terms of hours and dollars.
4 Hire a newswire service to distribute press releases. PR agencies will
send releases to the same newswires but mark the price up. One client
paid a 40% mark up on press release distribution, but could not
renegotiate because the expense had been approved. Research the true
cost. Have the PR staff write the press release and organize a press
list, then hire the distribution service yourself.
5 If possible, hire other services directly. For work that is contracted
out, such as producing pamphlets, books, VNRs and ANRs, find out how
much the agency plans to charge and compare that to buying the services
yourself. Agencies often add an extra 20% or 30% to what they have paid
when billing the client. Dennis Spring of Spring Associates advises
finding out which items are marked up, since they vary by agency.
6 Hire your own administrative assistants to do faxing, photocopying,
mailing and other administrative duties. This ensures that you are not
paying dollars 120 an hour for an entry-level account executive to stuff
your envelopes. In addition, the cost of these administrative tasks can
be marked up considerably. If you would rather have the agency handle
these tasks, ask for lower rates to be written into the contract.
Negotiate photocopy costs: agencies often charge 25 or 30 cents a copy,
when it is sometimes possible to bring that down to 10 or 15 cents.
7 Require joint ownership of the project’s press list. This will save
you money in the long run if you have any problems with your agency.
Should you choose to move to another agency, you will know who has been
contacted on behalf of your company.
8 Insist that the contract specify liability for erroneous statements in
the press and other problems. If your PR representation makes a false
claim in the press, your company can be held liable. Make provisions in
the contract to clarify legal responsibility. Approval of information
being given to the press can be required, among other things.
9 Insist that once services are completed and paid for, you own the
copyright to the work. Write it into the contract. This is particularly
important with work-for-hire such as graphic design or writing services.
One company found that after it terminated its agency, the agency
challenged its right to print a commissioned article it had paid
for.
10 Hire an internal PR professional to work in concert with your PR
agency. Having one person whom agency staff reports to will help
maintain the focus of your project and help the agency get the
information it needs more quickly. It will probably also save you
money.
Ana Vargas.
