Wanting to hash out the critical issues in any industry is a lofty goal, but I think we unintentionally hit gold at last week’s Critical Issues Forum. The agenda boasted topics ranging from how to differentiate influence from popularity, what is going on inside the minds of CMOs, how the client/agency relationship is evolving, where brand journalism fits into the news cycle and even “viral” content, but for me the unexpected hero of the hour was “Why does PR continue to give the milk away for free?”
A quick “tip” shared by MasterCard CCO, Chris Monteiro, was that PR agencies are notorious for “giving us [clients] stuff for free” which makes it easier for procurement people to get into heavy price negotiations year after year. His advice was simple: stop doing it. Stop thinking of freebies as “investments” and stop thinking that “if they liked it once, they’ll pay the next time,” reminding us that it’s more likely that if they liked it for free, they’ll never see the point in paying for it at the price you eventually ask for. In short, you will always be losing money.
It landed almost as a joke in the room, receiving soft chuckles, knowing glances from colleagues and more than a few Twitter shout-outs, but it was a concept that left me really thinking. Why is PR like the Souq? Why do clients think that everything is up for negotiation? Why do we allow it? More to the point, what can we do to correct it?
As PR increasingly gets a “seat at the marketing table” this issue rises in importance for the industry. As suggested by moderator, Elise Mitchell, we may have a seat (finally) but are still seen as the low man on the totem pole. And why might that be? Because we control the smallest budgets. Personally, I think she’s on to something.
But how do we go from issue to solution? I think the below ideas might, at the very least, be a good starting place.
- Band together: This will no doubt be the most challenging and yet most important step of all. Taking a stand on pricing doesn’t work if five agencies draw a line in the sand and 5,000 continue to price cut until they bleed. THIS should be on the agenda of every PR event to come over the next however many years it takes to see a change.
- Justifiable pricing/account team buy in: I’ve worked in every kind of agency from boutique to multinational and the one thing that seems to be a challenge for agencies of every make and model is pricing. “How much is…?” is a one-off, emailed-in-the-middle of the night question we have all gotten at some point. “I just need a number to put in the proposal,” being the second most common refrain. We need to end this practice. We need to stop the finger-in-the-air pricing and give clients numbers that we can and do stand firmly behind.
- Remove services as clients reduce budget: Tale as old as time, am I right? We are told one budget, but as soon as we submit our annual plan, those “price adjustments” come in and suddenly we have $xxxx less to work with. Instead of figuring out how to do it all for less, it is important to walk through the plan with the client and ask what elements they would like to remove based on the new constraints. But it’s just as important to remember, as you strip away elements, what the plan HAS to keep to remain effective. It’s a balance.
No simple answers here. But a topic that I hope to hear more and more about in 2016.