Not Charging By The Hour Doesn’t Make Time Worthless

PR recessionary lesson No. 1…save the baby!

You know, as long as we’re stuck in this nasty quagmire of a recession there are a number of lessons to be learned while we all wait (and hopefully work) for the promised turn-around. The first of which is how we keep from devaluing time when we have more of it on our hands. This seems to be a particular trait of larger enterprises where being busy or at least the appearance of being busy was prized and rewarded with ever increasing promotions and escalating salaries. But as the economy has soured and marketing or PR salaries have gone south or disappeared altogether, we have a new phenomenon emerging….doing more for less on the inside of an enterprise…and doing more for nothing on the outside. The attitude seems to be that “if I have to work harder for less, than you, Mr. PR vendor, must work for even less and perhaps nothing until you have proved your value. Since you’re not charging me by the hour, then your time must be free…” Really? I don’t think so.

Granted, this recession is driving many of the bad compensation practices and PR-types cultivated during the boom into the waste basket they deserve…however isn’t there an old saying about babies and bath water that should apply here?

Sure, budgets have disappeared or tightened, and the competition to hold existing business and to secure new accounts is far more competitive than ever. And, traditional PR agencies are even (God forbid) ever so slightly experimenting with performance-based compensation to keep those elevators rising. But does shifting away from exorbitant hourly fees or being more creatively competitive in proposals mean that the time still expended has lost all value? Even if such value is translated only in respect for the time spent. Exactly when did dollars charged equate to respect given? Where is it written or taught that when one does not charge incrementally for something, than the cumulative effort has no value…particularly if it is as a result of a plea for assistance?

We’ll continue to utilize all our experience and put forth our most creative, and therefore most competitive thinking to both sign and launch our clients toward success. If these tough times didn’t call for it, then our respect for our own professionalism as well as our client’s business would require it. What we ask in return is not an hourly stipend but that the prospects and clients respond in a timely manner and participate in the process. Respect our time as they ask us to respect theirs.

We all know that a long-standing truism in this business is that when a prospect or client wants something, it’s always with a yesterday deadline. And, when the agency needs something in return, yesterday deadlines become a few days. Ok, understood. It’s part of the game and we’ve all played it. But, hey…a little respect for our time here…even if we’re not charging you by the hour.

The Current State of American Business…

It’s called ‘hide and seek’

One of the truly great things about the Internet, and specifically the social media revolution, is the instant sharing of imaginative pieces that you wished you had created yourself. Pieces that express your sentiments, but written or produced with talent beyond our own. This week, two such rolled across my computer screen, that when their vastly different content is combined, eloquently state the real problem with American business today. No, I’m not speaking of recessionary pressures, bankruptcies, or even bailout phobia. I’m talking about timidity and price respect.

Mike Hegedus, the former CNBC correspondent and now media consultant, writes in his blog this week, “This timidity is in full blossom now thanks to the current uber recession.” He goes on to surmise that it’s not just the tightening of budgets, but the simple act of making the decisions to spend what is left that is the real problem. Hear! Hear! As the head of a Pay-for-Performance PR firm that oozes value and accountability compared to the traditional hourly fee model, I can’t begin to state the days and weeks we’ve spent waiting for companies to “meet to discuss,” to “get their ducks in a row,” to “pass this around the management team,” etc. etc. If anyone thinks that the most elusive thing in business today is a profit, you’re wrong…it’s a decision.

As a small business owner, I have complete empathy and respect for the process of expenditure evaluation and prioritizing those services that will provide the greatest return. But I also recognize something my wise grandmother (aren’t they all…) used to say, “you actually going to get something done today, or just sit around and think about it?”

But once that rare decision to move forward is finally made…then comes the real fun…”let’s see if we can squeeze even more out of that tightened marketing or PR budget…let’s make a deal.”
This YouTube piece would be hilarious if not so true.



Has this ugly recession driven companies to the point of treating vendors like used car dealers? Of trying to squeeze and manipulate pricing…often even after the service has been provided? And we in the PR industry are even more vulnerable to this practice because of the subjectivity of the product…and the vagaries of those aforementioned hourly fees.

Yes, I understand the need to derive the most value for least outlay. But if a PR company has actually delivered a tangible result as specified and agreed, not just an invoice for hours in trying to achieve the result, then respect the pricing and don’t ask us to choose what may be behind door number three.

Recession being blamed on “Public Relations” ? We wish we were that important...

As the economy worsens and it begins to affect each of us personally, we begin the very human process of finger pointing and blame gaming. Lately the focus of some of that blame has been leveled at our own profession…public relations. Guess who’s to blame for the recession? It rhymes with ‘shublic belations’

I’ve had a few good rants myself on the subject. But to be fair, my criticisms have not been at the profession overall, but at certain practices and firms that seem determined to black all of our eyes. And there lies a bigger problem for some of us that practice PR a little differently…that is, smartly, honestly and fairly.

In the meantime, headlines continue to be made by not only the extravagant hiring of PR firms, like AIG running amuck, to the City of Chicago’s recent firing of PR firms. Bad PR forces City Hall to cancel contracts

Let’s be clear…PR did not cause this recession and PR is not extending it. And here’s an even bigger blow to the PR blogosphere…we’re important, but not that important in the grand scheme of world geopolitics and geo-economics to be having a significant impact one way or another. That is not to say, we’re not an easy target. We are. And that’s our own fault. PR’s job and those of us who have been proud to practice it for a living over the years, is to facilitate information, to assist in communicating, and at times to educate…and in so doing, to often influence those to whom we’re communicating. We’re our clients’ storytellers when they have things of significance to tell. But we should never be their shills nor their “spinmeisters” and we should never ever become the story itself. And most importantly, when a client asks us to tell a story that in the best case is of little or no news value or worst case, is disingenuous or misleading, we should be honest and give them the best of professional advice…no.

But the most egregious of PR practices and the single greatest target of criticism during an economic downturn is the size of many of the large firms’ fees and the lack of accountability in how the traditional PR world is compensated. Inflated hourly fees for highly subjective and non-tangible results deserve the criticism…and I personally hope the outrage continues.

We as a country and as an economy will weather this crisis, bad as it is and bad as it may yet become. And while keeping our individual and professional roles in some humble and realistic perspective, we as PR practitioners can help and make a difference. How…by demanding that PR go beyond the image of high priced counselors to a more equitable compensation system based on fair pay for tangible performance.

Good PR, bad PR…or not PR

Those of us in this profession that have made the decision to make a living the hard way by asking to be paid only if we actually land positive press coverage for our clients rather than ‘counsel’ them, may be passing on some good income these days. I hope it’s not a sign of the dour economic times, but it’s apparent there are a lot of clients out there in need of some solid counsel rather than publicity. Do Michael Phelps, A-Rod, Jessica Simpson, and continuing fan and press fav, Blagojevich, come to mind?

Maybe it’s a backlash to the seeming adulation and feel-good nature of the coverage of the historic inauguration and charismatic new president, but we, as represented by the media we subscribe to (and ingratiate ourselves to as PR people) lately seem to have veered toward a fascination to report and elevate the weaker and sillier side of our nature. It’s as if we needed a good old-fashioned, what my grandmother used to say, “come-uppence” for being so smug in our reporting of real news that seriously affects our lives and incomes. “Enough” said the media kings and the publicists that feed off of them…"bring back the court jesters!” And of course, there are those amongst us, more than happy to do so.

The fact that we’re in the midst of an important debate with valid issues on all sides of the aisle that will affect all of us in the most personal ways over the next few years does not preclude us from the enjoyment of entertainment news, of sports, of even some fluff to lighten our day. Not at all. We all need and deserve a guilty pleasure or “silly fix” once in a while. But to be transfixed on it, to have it become a story with legs is an embarrassment to the media covering it, the audiences into it, and to the PR-types behind the scenes promoting it for income and profit.

Having been the PR renegade for most of my working life, it’s not entirely comfortable for me to wear the cloak of professional indignation in discussing my brothers and sisters in the business. The battle I’ve waged against fat retainers and hourly fees versus a pay-for-performance model is not the issue here, however. Public relations and specifically media relations under any compensation model can be a really tough business with more than enough justified criticism from within and especially from without. But for that very reason, it’s especially important to note and separate the pros from those that simply feed off the weaker side of our and some of the media’s nature. Too many of us have worked way too hard for way too many years fighting to squeeze in some justified media attention for clients deserving of the public’s attention, to be lumped together with the self-anointed “PR Gurus” or “PR Impresarios.”

Call it and them what you may, but please don’t call it “good PR.”

Media job cuts can offer opportunity for PR pros, but be prepared for some flak....

Most of the following I must credit to its original author, a friend and associate of mine here at INK inc, and one of the best PR pitchmen in the business, Gary Hanauer. Gary’s analysis and conclusion in a recent company memo is so solid, I thought it worth sharing the best of it…

“ It was a horrendous day at Forbes, with editorial layoffs being announced by Steve Forbes today, and writers grieving over their fellow "family members" being let go. Some were good, promising writers, according to one of my buddies, who survived. Apparently 19 were fired from the magazine and web in the wake of Forbes deciding to merge those two operations. Supposedly, none were senior level people. Forbes editor Bill Baldwin and Forbes.com editor Paul Maidment are now coeditors of the combined unit. Time magazine recently went through the same process.

Gawker says 17 were from the print side, "chiefly those with the longest tenure and the highest salaries," which kind of conflicts with the idea that none were senior level folks. The two from the web were recent hires. Most of the junior reporters who served as fact checkers are long gone. Forbes is also rumored to be moving from its fancy 60 Fifth Avenue digs to Forbes.com's dumpier newsroom at 90 Fifth Avenue so that Forbes can sell the old place. But it's a very bad time to be selling real estate, so the move is still undecided.

What does this mean for us old PR types? I've been around the block for a while and have discovered some tricks that work. And since placements are the lifeblood of the PR business and the only way we get paid at INK, I wanted to pass along what may sound like a new perspective to some and an "old hat" to others.

Believe it or not, with a little bit of attitude adjustment, what's happening at Forbes and elsewhere could mean more (media placements) for our clients!

Why? Because we're pros who don't dilly dally around and waste the time of reporters.

Think about it… with fewer reporters, the ones who are surviving are busier. Who will they be more inclined to turn to for help? To us. The pros like ourselves, who know how to come to them with timely, well thought out pitches that stand out from the crowd. And, the pros who are willing to go the extra mile to think of the "big picture" and to think "out of the box" to get the job done.

Obviously, we should always put our own client and their story forward first. But we should be willing to occasionally pitch a broader story that yes includes our client, but also includes mentioning the names of additional sources beyond the client, even at the risk of mentioning a few of the client's competitors, if it would help you sell a trend or other story and achieve the publicity our client wants.

That isn't how most agencies work, which is why their attempts to achieve publicity at top tier media often flop. They’re thinking like PR people, not the reporters and editors they’re trying to influence."

"In other words, now more than ever, we need to put on the "eyeglasses" of the reporter and try to think like them. What are the tools the reporter will need to get the job done right away? What are the ingredients?

Our job has grown. It's no longer good enough to just give a reporter a lead and a source, and to consider our work done. To move our idea from being merely another interesting pitch to one a reporter will actually use and build a story around, we need to, during the first conversation, tell the person we are pitching why they should do the story "now," when our client is available, who else they could or should interview beyond our client, and how you, as the reporter's new best friend, can send them all the information that's needed to proceed. If that sounds like P.R. 101, but if so, it’s been forgotten.

Additionally, many PR people pitch a story without saying why it must be done either now or soon. And they don't go beyond mentioning the client's name or beyond suggesting the CEO is an interviewee. If so, they’ve only done half their job…which is my point.

My advice about pitching the bigger story, even involving competitors, may sound counterintuitive, but in an age when reporters don't have the time to do much homework and at a time when a sophisticated reporter is going to have to gather this information anyway, my view is that we should be maximizing our chances for success in any way we can, as well as speeding the story from the idea stage to fruition".

And good advice it is, Gary.

Pay-for-Performance PR...why, what, and how...or how not

One truth is not so self-evident…all PR firms are not created equal. This certainly goes for those of us in the profession dedicated to the proposition that charging by the hour might be appropriate for a hot masseuse, but probably not for public relations…and absolutely not for media relations. It seems the economic disaster of the last three months has once again turned attention within our profession toward something “unique,” something “new,” something almost “revolutionary”…pay-for-performance PR. Once more, a compensation model that has been practiced successfully by myself and a few others for almost two decades is being trotted out of the shadows into the bright sunlight by our own trade media as either the “answer” to reduced marketing budgets at best…or as a viable test at worst for companies willing to experiment. How To Get Good PR Without the Big Retainers

I recognize this happens every few years when the traditional big hourly retainer PR firms and their clients begin to feel the economic squeeze of constricting budgets, or heaven forbid, a pang of guilt. Ok…the guilt thing is way overrated.

And with this renewed focus on pay-for-performance PR, comes the usual confusion as to what it is, who does it, and most importantly how do you go about selecting a firm should you decide it’s your path. Here are some thoughts from those two decades…

Pay-for-performance PR goes by many names….”pay-for-results,” ”incentive-based compensation,” “contingency-based,” and the most unglamorous, “pay-for-play”…but all are intended to describe PR firms that utilize a compensation system where the majority of their charges are based upon successful media placements or completion of actual designated services, i.e., speaking engagement, etc….and not by hourly fees or large retainers based on such fees. Some may offer some combination of hourly fees and/or retainers depending on the PR services being requested. However almost always the media outreach portion is performance based. One of the most common misunderstandings about pay-for-performance PR is that it is some how “cheaper” than under a traditional compensation model. Not necessarily. Over the long run of several months or years, a client may pay close to the same number of dollars, but the difference will be that each one of them will be attributable to a specific tangible result…not wasted effort.

And in spite of the old-fashioned basic fairness of this compensation structure, only a few PR firms practice it on a regular basis…and only a very few have practiced it successfully over a long period of time for all of their clients. Some large traditional PR firms have experimented with “pay-for-performance” for short periods or have tried to pass off the hourly/retainer model under its guise but seldom with any long-term success. The most common reason for failure lies in the fact that it is the antithesis of an ingrained compensation culture based on charging for the abstract “consulting” and “effort” rather than for a tangible something.

So, if there is only a small percentage of PR firms practicing legitimate pay-for-performance PR, how do you know which will best serve your needs as a client. Here are several pointers…

• Do a search for “Pay-for-Performance PR” on the Internet and review their web sites. Then contact the principle of the firm directly, discuss your particular PR needs, and their experience with similar challenges. 

• Do not hire a PR firm strictly online no matter what inducements may be offered. You can’t go “cheap” by filling out detailed PR or media needs online and expect any real level of successful service. Successful PR placements are the result of a collaborative process between the client and the agency…not a questionnaire. 

• If still interested, ask for a detailed written statement of the PR firm’s compensation structure and how their fees are determined. It is fair and appropriate to discuss budget and estimated potential charges at this point, but understand that under pay-for-performance compensation, the good news is that budget ceilings may not always be achieved. 

• Be leery of bundled pricing. Ask to see what’s in the “bundle” and that you’re paying for what meets your needs, not the agency’s.

• Make sure that compensation is based on real “performance” based on the successful publication, broadcast, or posting of your story…not just the “setting up of an interview opportunity at a specified date and time.” Make your agency deliver the actual placement…along with its invoice.

• And always make sure you’re willing to work with the agency as a team whichever PR firm you select…i.e., check the chemistry, not just their experience. As mentioned previously, successful PR is a collaborative process based on trust, responsiveness, and teamwork. And oh…patience.