3 things big PR firms are getting wrong and small ones are getting right

Agency founder Nick Puleo makes his case that the small agencies are winning.

3 things big PR firms are getting wrong and small ones are getting right

If you’re employed at a large PR firm, by now the refrain of complaints from unhappy clients has taken on frustrating familiarity:

“Junior staff with little experience are running my account.”

“I get shunted aside for bigger clients.” 

“You constantly squeeze me for more budget.”

Nowhere are these grievances more applicable than for clients at medium- or smaller-size companies. For those clients, with, just say, a budget of $20,000 a month, the big agency model is not only broken but probably beyond repair.

Believe me, I know. Last year, I opened my own small agency. But before doing so, I conducted in-depth interviews with nearly 100 in-house PR executives and former agency leaders. I wanted to find out, first-hand, what clients want most and to build a business around those needs. Below are my top three takeaways on how smaller agencies are outperforming their bigger peers:

The classic bait and switch still prevails. Senior executives pitch the business and are seldom heard from again. Junior staff run accounts. Senior people stay far from the trenches, jumping in only during emergencies—a shame since most likely only they can deliver the kind of trusted, strategic counsel that clients really need. One of my clients, with 25 years of experience, formerly at a large agency, had someone with five years of experience leading his account.

Smaller clients get short shrift and short-changed. Let’s say that you have a terrific large agency team serving you. Suddenly, members of your team are promoted. Thanks to the rising hourly billing rates, your monthly fee, until then perfectly adequate, no longer suffices. In response, the agency either replaces valued team members in favor of less-experienced staff or extends its palm seeking more funds. 

The agency comes first. Big agencies, especially those that are publicly traded and under unrelenting pressure from holding companies, rank quarter-to-quarter growth above all else. The Fortune 500 accounts get immediate attention, leaving others on the backburner. Staff viewed as underutilized get assigned to accounts regardless of skill sets. Agencies devote inordinate energy chasing awards that mean little or nothing to most clients. In the end, the small- and medium-size clients get PR service that’s off the shelf rather than customized, and sometimes from a team with only a limited understanding of their business.

This is why small agencies are winning. Small firms, with annual revenues under $3 million, saw the least client churn in 2019 (17.7%), according to research from the Gould+Partners consultancy. Larger firms saw turnover rates as high as 28%. 

Forget towering downtown offices, human resources departments and all the usual accoutrements. The latest generation of agencies is building networks of experts cherry picked for assignments according to the services required and operating independently. They’re moving to flat fee models based on results, not hourly needs. And they’re focused on client satisfaction, not trophies and awards parties.  

More and more—less is more. 

Nick Puleo is the president and founder of Comsint. 

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