Good marketing people never do anything without a plan. That's a given...
So, it stands to reason that good PR people shouldn't embark on a program without a plan. The question is, how much should a client pay a firm for that plan?
That's one of the most striking differences between pay-for-performance (PFP) firms and retainer-based firms. The good PFP agencies don't pad their bills with extra fees for a strategy. The reason is, they get paid for media exposure and "strategy" is a requisite tool for successfully securing media.
Retainer firms set a standard monthly fee, and bill the client's account by subtracting the hourly fees racked up by their team. Just like a law firm, agencies have different billing rates for different team members. A junior account rep who does the grunt work might bill against a retainer at $100 or $150 per hour, while a VP might bill in the $350 range. Even the administrative assistants get into the act, sometimes billing between $50 and $75 per hour. Because retainer-based firms have to account for each hour spent on the account, sometimes the agency will even bill out for the time it takes the administrative staff to pull together all the information for that report. That means that clients often pay between $100 and $150 just to have their monthly bill and report assembled.
Strategy, however, is the big ticket item, because it involves the senior staff. In many cases, they'll hold hours-long strategy sessions with the client, utilizing specialists from other departments and at least one VP. If you add up the billable hours, one three-hour strategy session can cost a client upwards of $3,000 against their first month's retainer.
In the pay-for-performance arena, strategy is a given, and the good firms don't charge a line-item fee for it. After all, how can an agency book media without a strategy? That's a key way that PFP firms represent a sizable advantage for their clients over their retainer firm counterparts.
I liken it to taking your car to a mechanic. Most reputable mechanics won't charge you to look at your car to see what's wrong. They'll look at your car, develop a strategy to fix it, and then give you an estimate for the tactics they'll use to fix it. They don't hold a big meeting with their owner, manager and two or three top mechanics and then charge you for it. They just tell you what they think you should do, and then give you a price on what it will cost to get it done.
This is why PR agencies sometimes get a bad rap. It's not just that some of them don't deliver against their promises-it's because they charge big money to develop a strategy that in some cases doesn't even work. That's one reason why PFP firms are a better bet-they generally don't mark up the strategy, and they promise results and not just best efforts.
The bottom line is that when engaging a public relations firm you should expect-and insist-on a detailed explanation of exactly what services you will receive for monies spent. Question each item and take the time to ensure you understand everything, including what outcome you can expect at each step of your campaign. If the information doesn't add up, keep looking for the firm that has the answers that make sense for you!