I spend an increasing amount of time debating the merits of retainers versus the project fee so I thought it time to step out of the PR closet and address it head on.
To do so, I’m afraid I’m going to have to utilise a few of the most overused and trite phrases that have ever been coined – please bear with me.
You see, we’re in an ‘economic crisis’ (told you) and in the ‘current climate’ of a potential ‘double-dip recession’, cash is king.
This means that companies are ‘tightening their belts’ and keeping a ‘firm hold of the purse strings’ (ok enough now) and whilst investing in communications is finally recognised as an essential contributor to bottom line, how it is being embraced seems to have changed.
Ever more frequently, clients seem keen to free themselves of their monthly PR retainers – they don’t want to cut off PR completely (we all know that would be crazy!) they just don’t want the financial commitment of a regular monthly fee.
I understand that during difficult trading times costs need to be stripped back and as we’re a flexible agency, we are always prepared to accommodate our clients’ changing circumstances. We’re in it for the long haul.
But nine times out of ten, clients end up spending more.
It’s the first thing I warn clients about when they move from working on a retained basis to project-by-project. You see, they have become accustomed to the level of service the good old retainer allows and when this has gone, they find that we actually do deliver an awful lot for the monthly fee. Media relations, social media, experiential marketing and not to mention crisis communications are all vital to ensuring companies maintain their glowing reputation with customers and stakeholders and if you have to pay for it bit by bit, costs start to rise. At the same time, it is no longer having the same impact because it isn’t being strategically planned in advance or delivered in the timeliest manner. So now you’re paying more and achieving less. The only option remaining is for you to reduce the level of PR activity being provided – and when consumer spend is frugal and competition is fierce, this is definitely Not. A. Good. Plan.
I know what you’re thinking. If costs are increasing, why don’t agencies just keep schtum and reap the financial benefits? Well firstly, as an ethical and honest agency this doesn’t sit well with us, and secondly the retainer enables us to forward plan activity so we can manage workloads accordingly. Let’s face it, deadlines are challenging in this PR game and anything we can do to prevent further pressure compromising a hard working campaign, means that as a client, you always get a better return on your investment.
So what’s the solution? Budgets are being cut and efficiencies need to be made somewhere, after all cash is king and currently, there isn’t a lot of it about.
Well this is the thing, hasn’t cash always been king? The way we run our business is no different to if the UK wasn’t in debt by one trillion pounds – keeping a close eye on overheads and ensuring profit margins don’t fluctuate too dramatically. Cash flow, always a sticky wicket, is monitored as if it were the blood coursing through my veins. It doesn’t mean we don’t invest in areas that add value to our business or service offer. It just means that we very carefully consider what we spend and who with, so that we’re given a competitive advantage and provided with maximum benefit.
There are clearly occasions when a retainer simply isn’t appropriate, such as when businesses are in their infancy or when a client needs a specific one-off project to compliment their existing marketing communications. We work with all manner of clients in this way and on projects of varying sizes. It’s not the project with which we take umbrage; it’s those occasions when we know a retainer really would make so much more sense.
So, drawing to a conclusion, if you have faith in your PR agency and are confident they are delivering you true value and a real return on your investment, listen to them and take their advice. They know what they’re talking about.
Spend wisely certainly, but don’t stop spending. That’s what’s causing this country’s financial mess in the first place.
Trust me, I’m telling the truth. It’s all in the name.
Lisa French is Managing Partner of Truth PR.