What would you charge for public relations services?

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istock_000000752057xsmallI received an email  through the CCPRF Website from a new public relations practitioner asking how he should charge for his services. I’d like to share his email and my response.

The question:

I’m an up and coming media/PR consultant.  I was in the media industry for 13 years and now I’m looking to develop my own consulting business.  …

Recently, I acquired my first client.  I’ll be paid on a per project basis. The client wants me to work on a social networking website campaign I suggested.  Basically, I’ll be putting together this small business’ Facebook and Twitter pages.  I’m trying to figure out how much I can charge this business.  Should I go with a per hour rate?  If so, how much?  Or a flat rate? If so, how much?  I’m also trying to determine how long it will take to build traffic and interest to these social networking pages.  I’m guessing it’ll take 4 to 5 months for any substantial growth.  This company is looking at this campaign as a new way to attract interest to its website/store.
I’d appreciate any thoughts as to how much I can charge.

My answer:

What you charge depends on the overhead you must carry (your needs), the value to the client (what you should charge), the budget of the client (what you may only be able to charge.) Bottom line, I’d start by asking for a fee equal to what I think the project will be worth the the client based on anticipated results. Then, if they cannot afford this, you can decide whether to negotiate an acceptable fee.

Your thoughts:

How would you answer this question? What’s the right way to charge for public relations services?

Cross-posted from the CCPRF:

This is cross-posted from the Canadian Council of Public Relations Firms‘ Weblog. I’m this year’s Chair of the CCPRF. And while the posts there are not as frequent as I would like, I think it’s worthwhile subscribing to it’s feed. When posts do appear, they’re usually authored by a CEO of a Canadian PR firm. It’s a unique aggregation of content.

Managing through the recession – One Win at a Time

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A few weeks ago, I wrote a post about my thoughts on what Thornley Fallis and 76design and companies like us should be doing to survive the recession. In that post, I pointed out that retaining existing clients is a critical first step to keeping your business healthy. Now more than ever.

Well, this past weekend, I received some great news. One of our senior account managers had just succeeded in renewing two client relationships. Not only did he renew them. But  he expanded the scope of each one with a modest budget increase.

That’s great news to be receiving. It reflects hard work on the part of the account manager and our team. And it provides evidence that we may be on the right track to not only survive the recession, but to emerge stronger.

Here’s the email that I wrote to the manager. I also copied it to the other managers in the firm.

One win at a time … that’s how we’ll not only survive but thrive in the recession.

I’ve just learned that you are on the verge of getting an additional assignment from [an existing client].

Last month, you won us a renewal and budget increase from [another existing] client.

One win at a time.

It’s also about picking and choosing. Retaining and growing the clients we have is SO much more efficient and effective than the competitive pitch. And if we hang on to all our existing clients, then we can be choosy in the new pitches we do, picking the ones that are blue chip (they will actually pay their bills) and want us because they’ve come to us.

One win at a time.

Keep going in this direction please.

Why am I writing this series of “Managing through the recession” posts? Not to boast about how well we are doing. It’s way to early to be that smug. I hope with these posts to share the lessons I’ve learned through my experience in the last downturn. Hopefully, that will help you and managers in other companies. Of course, I also hope that the people in my own companies will read and consider what I am suggesting.

So far so good.

Memo to Jim Flaherty: Please don't make it harder to manage through this recession

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At Thornley Fallis and 76design, our payroll costs routinely run at about 60% of our topline revenues. That means that 60 cents of every dollar we receive for our services goes directly to create jobs. Good jobs. Jobs that employ creative people. Jobs that employ knowledge workers. Workers who help companies – and government – use the new social media to create communities of interest, accelerate knowledge sharing and get closer to the people they serve.

So, I was dismayed to read the following section in Finance Minister James Flaherty’s November 27 Economic Statement:

“There will be no free ride for anyone else in government either.

“We are directing government ministers and deputy ministers from every single department and agency of the Government to rein in their spending on travel, hospitality, conferences, exchanges and professional services.

“This includes polling, consultants and external legal services.”

Consulting. That’s me and my industry. The government contracts with knowledge workers as consultants. So, are we about to be on the chopping block? Does Minister Flaherty think that we are some kind of bureaucratic boondoggle?

When I read Finance Minister Flaherty’s statement, I fear that he and the government are failing to see the value of the economic activity our industry generates.

Clearly, he doesn’t understand:

  • the economic efficiency of our industry in creating jobs,
  • how important government is to our industry as one of the largest communicators in the country,
  • how communicating with Canadians to restore confidence is essential to the economic recovery, and
  • how government spending on communications not only is part of the solution in getting past the recession panic, but will also enable our industry to maintain employment levels.

Does Minister Flaherty understand that if he takes a broadsword to consulting contracts, he will be killing jobs – lots of jobs – at a time when we should be trying to sustain employment?

The Department of Finance announced last Thursday that it is conducting online consultations in advance of the January 26 budget.

This is my submission.

Mr. Flaherty, please don’t pull the rug out from under knowledge workers with one hand while with the other you are seeking to build up infrastructure.

Yes, please do invest in extending broadband Internet access so that more people can have access to the benefits of the Net. (And while you’re at it, please encourage innovation by supporting net neutrality.)

But while you are pouring dollars into building roads, bridges, buildings and bandwidth, please don’t undercut the knowledge workers whom you are counting on to use that infrastructure to create jobs in the future.

People like me are trying to preserve jobs for knowledge workers.

We aren’t getting any free ride. We help government to connect with Canadians. And we also help you to listen to what Canadians are saying. We are also very efficient at creating jobs. Jobs right here in Canada.

We count on you and our government to be wise and to legislate in the public interest. So, please take a closer look at small business and industries like mine before you act. I think you’ll find that it makes sense to provide us with stability, not the back of your hand.

And if you provide us with a stable environment, I’m sure you’ll find that we do our part. And isn’t that really how we’ll get through the recession? If everyone does their part?

Managing through the coming recession

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While I was on vacation two weeks ago, the real world kept intruding by way of reports of a plummeting stock market and world leaders in full-out crisis mode. On Friday of last week the Conference Board reported that Canadian consumer confidence is at a 26 year low.

Economic CrushThe warning signs are inescapable. Challenging times lie ahead.

What does this mean for companies like Thornley Fallis and 76design? We have to prepare ourselves to receive telephone calls that start with, “We’ve decided to reduce the budget…” or “We’re holding off proceeding with the next phase…” or “We’ve decided to consolidate our spending with one agency.”

What are we doing about it?

Well, first, I am changing my own thinking from “grow, grow, grow” to “cash is king.”

In the coming recession, there will be surviviors and there will be casualties. I made some mistakes in the 2001-2002 downturn and I’m determined not to make those mistakes again.

This simple change of mindset will drive a whole series of cascading decisions. We won’t stop growing where we can, but we will be more selective in our investments. More cautious. Less open to higher risks.

How does this translate into our day to day reality?

Zero Budget

First, we’re resetting all of our discretionary budgets to zero. This will force each decision-maker to make fresh decisions about how we spend money. What worked yesterday may not work today. So, let’s reexamine what we’re doing to be sure that we put our resources behind those things that work and match up against the new tighter economic realities.

Maximize

Second, I’m asking each manager to maximize the use of our current human resources – the people who are the essence of our company. Instead of recruiting ahead of our need for people, we will wait until people are working flat out before we hire new staff. In tough times, it’s much better to be too busy and working very hard than to be sitting in an office in which you know that there are too many people for the work to be done.

Choose

Third, we will be more selective in the new business opportunities we pursue. The best opportunity is a happy client who says, “Let’s keep working together.” Next to that, we will scrutinize closely the opportunities and make pragmatic decisions based on our assessment of the prospects for success of the potential client, their business strength and why they have come to us. We won’t participate in any competitions for business unless the prospective client tells us that there is a clear reason that they have come to us. If they know our core strengths or one or more of our team and they really want to work with us, then we’ll compete. If they’ve selected us off a list so that they can round out a competitive roster, well, sorry, we’ll pass that one by.

But wait. There will be opportunities to grow

Ironically, at the very time that things are tightening, there will also be opportunities to grow and to plant the seeds for future growth.

There will be companies that look to make more effective use of their marketing budgets. There will be suppliers whose core business comes unstuck and who shed good clients as their ability to service them is diminished.

By paying attention to our business fundamentals through zero budgeting, maximizing and choosing, we will be able to answer the call when those opportunities arise. If we do this, we can emerge from the recession with all our capabilities intact and as a stronger competitor.

What’s your view?

So, that’s our gameplan this week. I say this week because in this time of uncertainty, we are  reexamining our assumptions and assessments as every week goes by. What seems right to us today may not seem quite so right next week. And we will be ready to change our stance as the world changes around us.

How about you? Have you already felt the effects of the downturn? What are you doing at your company to weather the recession?

Agency Link wants to improve the way that companies select public relations firms

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Competitive pitches for new business. They’re the bane of any agency or firm that must participate. And they’re also an unavoidable fact of life.

Public relations practitioners get up every day looking forward to doing great work for their clients. But in order to get the opportunity to do this, we first must win the confidence of those clients.

This is best done by developing a reputation for doing outstanding work and the network of people for whom we have done this who will then call us directly or provide us with referrals. In this situation, the battle is nearly won by the time that you hear the words, "I have this challenge that I’d like your advice on…"

However, not all relationships originate in this way.

Competitions: Costly and Capricious

Many potential clients, especially large corporations and governments, feel they need to conduct formal competitions for their business.

The way these competitions are run is highly idiosyncratic. Short list. Long list. With creative presentations. Without creative presentations. Proposal only. Proposal plus presentation. Budget revealed in advance? Maybe. Maybe not. A blind competition in which you do not know the identities of the competitors? More often than should be the case.

And costly. Boy, does it cost a lot to win a competition. A determined firm will pull in a team to research the client, the client’s industry and the client’s competitors. Brainstorm(s) will be held to develop ideas. A formal proposal will be prepared. Artwork and mock ups will be created for visual, physical and Web elements of the program. Cost quotes will be obtained and a budget prepared. All of this will be pulled together into a bid package. Then a PowerPoint will be prepared to support the team presentation, which will itself be rehearsed. Finally the team will get a chance to present their ideas to the client.

All in all, thousands and probably tens of thousands of dollars worth of time and direct expenses are invested in a competitive bid. So, it’s only natural that communications firms pine for a simple bid process that is fair and transparent.

Agency Link says it can be better

Now, a new firm, Agency Link , wants to get into the middle of the selection process with a promise to help clients find the PR partners who best meet their needs.

Agency Link offers a range of services, including audits and evaluations of existing client-supplier relationships, assessments of RFPs, assistance with search and selection of PR firms, and contract negotiations. Agency Link will work for the clients, not the PR firms. And they have published a Code of Conduct to reassure both clients and PR firms that they will conduct themselves in a fair and transparent fashion.

This is a new concept in Canada. And most PR firm heads I know are quietly supportive of Agency Link, hoping that it will deliver on the promised of a more effective selection process for those clients who use its services.

Agency Link is the brainchild of two co-founders, Stan Didzbalis and Sheila Corriveau . Both Stan and Sheila have extensive experience as PR firm principals and on the client side. Stan was the founder of BenchMark Communications, which he grew to over 50 consultants before he sold it to Omnicom. Before establishing his agency, he worked in communications at two bluechip corporations, IBM and Inco. Sheila is a former CEO of Porter Novelli in Canada. Her corporate experience includes leadership roles in several communications functions at The Dynacare Health Group.

Interview with Stan Didzbalis

I caught up with Stan Didzbalis this week in Toronto. He took a few minutes to talk to me about what Agency Link is up to.

Stan told me that there are two sides to Agency Link’s business. "One is to help clients find the right agency fit – whether it be a public relations agency, a digital marketing agency, an investor relations firm. … The second part of our business is a consulting practice. We consult with clients to help them optimize their agency relationships and get the best that they can out of their agencies."

The benefits to agencies? According to Stan, "We hope to take some of the inconsistencies out of the search process. We hope to eliminate cattle calls. We really want our clients to minimize the agency churn. The best way we can do that it to educate the clients on how best to utilize an agency resource."

Here. Here. I’ve gotta wish Stan and Sheila total success in achieving these objectives.

You can watch the video of my interview with Stan Didzbalis here.

Interview with Pat Gossage, Chairman of Media Profile

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Pat Gossage, Chairman of Media ProfilePat Gossage, the founder and now Chairman of Media Profile, talked to me recently for the series of video interviews with heads of Canadian PR firms that I’m conducting for the Canadian Council of Public Relations Firms.

Some of the highlights of the interview:

What makes Media Profile a special place?

“I wanted a firm I enjoyed coming to work at every day. And I wanted a firm that had a pleasant, accepting and respectful atmosphere amongst its workers. A lot of teamwork. Bringing people up from within rather than parachuting from above. I was much more interested in creating a culture than creating a big, successful firm. The culture is here and the success followed.”

On client relations:

“The other thing we stress is being incredibly attentive to clients. We’re good listeners. Somebody once told me that when you are listening to the client your are winning. That’s been a theory we’ve put into practice and it’s been an important aspect of us winning and keeping clients.”

Advice to young people considering a career in public relations:

“The atmosphere in an office is very important. … It’s whether you want to come to work at a firm and whether the senior people are accessible, whether there’s a mentoring program, all the things that will allow you to build on your skills over time. And stay with one firm, which is very important to all of us in public relations, so that we have continuity with our people. That’s what the client respects. The client doesn’t want to be dealing with different people every couple of years.”

You can view the video of the complete interview with Pat Gossage on the CCPRF Weblog.

If you do PR for the Government of Canada, there's a meeting tonight for you

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If you live in Canada’s National Capital Region and provide public relations services as a contractor to the Government of Canada, then you will want to attend the special meeting of the Ottawa/Gatineau Chapter of the Canadian Public Relations Society tonight.

The notice of the meeting provides details:

CPRS OttawaThe Government of Canada has issued a request for industry comments (RFIC) for a draft standing offer that would be issued by Public Works and Government Services Canada that would serve as the basic Standing Offer document for a potential new system where PWGSC would offer all departments access to this master standing offer.

This request for industry comments will be available at the meeting for review. We will be drafting a response, as a society, for the deadline of March 12th.

…

To help draft the document, we want to invite our members interested in responding to join us for an evening meeting on Wednesday, March 7th, at 5 p.m. We will be hosting the meeting in the boardroom at Thornley Fallis Communications, and we would welcome all those interested in providing feedback to the process to join us at that time. Please RSVP if possible, but we will welcome anyone who can join us for this session.

WHAT: Special meeting of the chapter membership, CPRS Ottawa-Gatineau WHEN: Wednesday, March 7th, from 5 to 7 p.m. (coffee will be served)

WHERE: Boardroom, Thornley Fallis Communications, Suite 730, 55 Metcalfe St., Ottawa

If you care about the way that the Government of Canada buys public relations services, this is a great chance to be influence the position that will be taken by the local chapter of the CPRS .

Tell the Canadian Council of Public Relations Firms what you think about the government PR Standing Offer process

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Have your sayLast week, I posted about the Government of Canada’s Request for Industry Comment on its proposed new public relations Standing Offer selection process. I’ve also cross posted to the Canadian Council of Public Relations Firms‘ Weblog with the aim of stimulating some discussion that the Council could reference in preparing the submission on behalf of its member companies.

If you run a public relations firm in Canada that has bid for assignments from the Government of Canada or that would like to compete in the future, drop over to the CCPRF site and share your views about the draft Standing Offer.

Canadian Government wants industry input on how it buys PR services

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Have you ever worked late into the night preparing a proposal for a large assignment and thought to yourself, “There must be a better way to do this?”

Canada WordMarkWell, Canada’s largest purchaser of public relations services, the Federal Government has just invited industry comment on a new standard Draft Request for Standing Offer that would be used to select firms to provide PR services to departments and agencies.

The Standing Offer system allows the government to pre-qualify firms as suppliers through a competitive process. Firms then may be contracted for specific services by the departments and agencies for which they have been pre-qualified.

Parliament of CanadaI’ve been told that the Federal Government purchases between $5 million and $7 million in public relations services each year. That’s a big target that entices many companies to compete for assignments.

We all benefit from a fair and effective selection process for work. The current Request for Industry Comment provides us with an all-too-rare opportunity to suggest improvements to this process.

If you have bid for government work in the past or if you have been discouraged from doing so because of the bidding process, don’t miss this opportunity to comment on the government’s proposed new selection process. Download the Draft Request for Standing Offer and submit your comments before February 26, 2007.