No matter what you do for a living, there are moments when the behind-the-scenes stuff in your business can be downright embarrassing. Here’s a look at an example of that from the PR business. It’s a case in point of a practice that should be extinct, but unfortunately appears to be alive.
The truth that many won’t tell is that for generations, pure BS dictated fees in the PR firm business. Typically, firms would charge clients the biggest fee they thought they could get away with every month until they were fired. That model paid for many country club memberships for owners who enjoyed the margins created when fees did not necessarily reflect work. Earlier in our careers, we saw first-hand how client fees were determined by factors like how much the last client to leave was paying or how one partner chooses to outdo another partner’s latest new business conquest.
When we started Tanner Friedman, we decided that to operate with the integrity we promised clients, fees would be based solely on the work performed for clients. We would bill only for professional time, whether via hourly, project or ongoing arrangements. In other words, no BS.
But what happens when potential clients ask for, or even demand BS? That actually happened recently. We received a referral to a company that works in an industry where we have long-term, in-depth experience but, at the moment, no conflicts. They were planning an event weeks away and were months behind on planning. They needed a firm, fast, to jump in help make the event happen, as well as work to secure national industry coverage.
In the initial 30-minute phone call, the head of marketing said that in addition to this immediate project, she was also hoping to retain the selected agency for a one-year campaign. I counseled her to focus on the immediate event first – how to squeeze 90 days of work into two weeks – and then, and only then, turn to how to create a year-long campaign. She then asked for a proposal to support the event, which we turned around in less than 48 hours to meet her time imperative.
Her first reaction to receiving the proposal (which would have saved her hide in pulling off an event for which there had been no strategic planning) was to ask how much it would cost for a one-year campaign. I responded by explaining that, based on one half-hour call, with an event looming for which there would need to be two intense weeks of work, it would impossible and irresponsible to give her an estimate that would, essentially, be fiction.
It’s like they walked into a restaurant to ask for a table for 12 at the peak of dinnertime and, before finding out how they could be accommodated asked “how much would it cost to eat here every day for a year?” without telling anyone at the restaurant if it would be breakfast, lunch, dinner or some combination of the above. Or if they are vegetarian or gluten-free. Or if they were to eat in or carry out. Or how large of a party they had. Without knowing any of those factors, could the restaurant give a cost that is anything other than BS?
She pushed back, writing “we need to have a general idea of the dollars we might be spending if we have a firm handle this for a year. I realize that I have only given you the basics, but… we are looking to you for recommendations and the associated costs.”
In other words, she has to make a boss happy and BS is welcome, if not encouraged. I offered to give her an estimate of what it would cost to develop a plan. She said that was not good enough. So I wrote this:
“I can only answer this question hypothetically. Without determining a plan of action and scope of work, it is impossible to estimate fees with any acceptable level of integrity. All I can tell you is that a medium-sized annual project for us, which this, at first glance, would appear to be, is typically $X to $X on an annual basis. Because a year-long project would include travel to your location, I can guess, and this is only a guess, that it would be on the high end of that.
We begin with clients by deciding that their needs match our capabilities and interests. Then, together, we determine a scope of work and develop a plan (for which we are compensated). Our fees are based solely on that scope of work.”
A few days later, we were informed that this company had selected another firm. We can only assume that some firm was willing to throw out a number – probably the biggest number they thought they could get away with – to get the business while the inside contact makes her boss happy. This time, BS won the battle. But, from our vantage point, because enough of our clients tell us they appreciate our processes and how we do businesses, we think integrity is winning the war.