For public relations bosses, managing profitability can be a constant headache when trying to balance client expectations and deliver against budget.
We don’t help ourselves though. Often, in our eagerness to close the deal and get started on activity, we neglect an absolutely critical step in the process; getting the paperwork right.
Clearly defining project goals and agreeing deliverables is a fundamental part of the process.
A few months in to a contract, a lack of clarity about what is included within the agreed budget and what sits outside of this can very quickly see a previously healthy client-agency relationship fall apart.
Outcomes over outputs
Good contracts shouldn’t just be tick box exercises either. There are far too many conventional arrangements in which both parties double check that each month the desired four press releases, three blogs and two interview pitches were delivered successfully.
This way of working is hardly a route to organisational success.
As Steve Earl comments in the public relations industry guide #FuturePRoof: “Rather than stating that an agency will “carry out public relations services” and then list either categories or deliverables, we will need to move towards contracts that state not only desired outcomes but how we will measure them and what the financial implications are of achieving those outcomes.”
It’s not as easy as it seems or we’d all be doing it already. This requires business acumen and access to the management team - or at very least knowledge of the business objectives so the PR and marketing objectives can align with these.
Speaking the language of the Board to pitch the case for an acceptable comms budget and the ability to report appropriately in terms of PR’s contribution to commercial success is also a must.
Dealing with over-servicing
Outcome-focused contracts or not, there will always be some clients who will try to negotiate more than they’re due, or where the team doesn’t understand exactly how and where their investment is being spent.
Educating these contacts about the value of public relations and the resource it requires should be seen as a priority task in these circumstances. It’s at this point reporting the financial implications of achieving PR outcomes is absolutely critical as it may be the only language they understand.
The responsibility lies with you
Over-servicing or not delivering against budget however can frequently be the fault of the agency.
It can be quite normal for those eager to win business to over-promise in a pitch situation, which puts the team at a disadvantage from the start.
Poor use of timesheets can make it difficult to see how time is being utilised and whether hours could be better allocated. Take for instance the client wants regular meetings at a venue a long drive away. Identifying the amount of travel time could very quickly help strip out this type of wastage, allowing the team to apply themselves to the public relations task and deliver the sought-after results.
Training account handlers on the importance of timesheets and using the data to open dialogue with the client about areas in which work practices can be improved can make all the difference.
Finally, how time is rationalised within the agency is an important consideration too.
Planned time to grow a client account should be written off as an investment and considered non-billable. Putting this down as client hours gives a false impression of activity versus results which does everyone a disservice.
Honesty and transparency rules ok
Client relationships can be very straightforward where everyone is clear on the task in hand, how this will be delivered within the agreed framework and the desired outcomes.
Being proactive with ideas and finding ways to add value outside of set accounts hours is always a sure fire winner.
Equally, agencies have to be brave and start saying no to clients who want something for nothing or want the same level of service on the cheap. Public relations is a management discipline and should be valued as such.
This post first appeared on the Hiscox business blog in April 2016.