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Appointing a Public Relations Agency: A How-To for SMEs

Written by: Wendy McWilliams

Article Overview: Your business has finally reached the point where your secretary/PA has told you that writing press releases was not in her job description. This is the time to seek help from a public relations professional. This white paper covers in-house versus outsourced, method of operation (retainer, per project or hourly rate), budget, objectives and agency selection.

Appointing a Public Relations Agency: A How-To for SMEs

White Paper
Appointing a Public Relations Agency: a How-To for SMEs
© copyright 2008 WMC Public Relations Pty Limited www.wmcpr.com.au

Appointing a Public Relations Agency: a How-To for SMEs

Your business has finally reached the point where your secretary/PA has told you that writing press releases was not in her job description.

This is the time to seek help from a public relations professional.

There are myriad considerations before you start calling a recruitment company, writing an advertisement, or public relations agencies/consultancies or, including:

In-house versus outsourcing
What is your budget?
What are your objectives?
How do I select the right agency?

In-house Vs Outsourced

Most PR agencies will tell you it is more cost effective to outsource the PR role rather than having a full time or part time in-house Public Relations Officer.

In general the benefits when outsourcing include:

1. Access to a greater skill base and people who have wider experience, contacts and expertise. An agency is also more in touch with trends and developments in PR practices and techniques.

2. Flexible budgeting: when you appoint a PR agency you only pay for the time they spend on your behalf and the tap can be turned on and off as necessary (although this isn't recommended).

3. Agencies can manage peak workloads, bringing on more people as required.

4. Infrastructure costs to set up a new employee (PC, desk, business cards, etc.), in addition to the real estate required, aren't required.

5. In-house staff are often called upon to undertake duties in areas other than the public relations and communications roles for which they were employed. This dilutes the position, which can affect the desired outcomes.

6. Agency staff are independent and therefore will provide objective advice and analysis, without the constraints of internal politics that may come into play with an in-house PR Officer.

Method of Operation

For small to medium enterprises (SMEs) an agency should have one primary consultant or account executive/director who is the day-to-day contact for your business. Other staff would be provided as additional resources as required.

Likewise, the Account Executive should deal with one person at your organisation. Ideally, it should be a senior person: either the President/Managing Director/Owner or the Sales Director, depending on how many employees you have. Their PAs should be present at meetings, as they provide the necessary backup and support. Assistants are valuable too by contributing ideas and providing any internal legwork that may be required.

There are usually three methods of operation that each have an alternative billing system, although they can be intertwined.

You should have a choice of either paying a monthly retainer for the duration of the campaign or ongoing program; paying per project agreeing on the cost beforehand; or paying an hourly rate either for a specific project or on a continuing basis.

A Retainer: A retainer agreement is usually for a 12-month period, renewed annually. The minimum period would be six months. However, it can be for any set period or even ongoing until terminated by either party, giving at least one month's notice. It is a good arrangement for you, the client, because it is a set fee and there aren't any surprises each month. Another benefit of a retainer is that both parties are committed to defined outcomes.

Things to be alert to:
* You should be advised by the agency what you will receive for the retainer: ie roughly how many hours will they perform on your behalf. Note that there will still be peaks and troughs each month, depending on the program you have agreed to.
* You should be provided with an activity report and a status report at the end of each month.

Per Project: Some clients like to start on this basis with a new agency because it gives them an opportunity to see if they are happy working with the person/team the agency appoints to your account. Attributes you want to look for include: they are professional, innovative, easy to work with, and most importantly, they get results.

Setting the project budget can be done in two ways:
• you set the budget and the agency recommends the best program to achieve your objectives, and
• the agency prepares a program (and budget) to meet your objectives, which you agree to. If, for example, you have set an annual budget of $50,000, the agency should explain how this will be allocated each month in terms of fees and expenses (out of pocket costs as well as supplier costs such as photographers, media monitoring, graphic design, printing, etc.).

Providing the agency with the budget is usually the best way to operate, although it is worth including in the brief (covered below) that if other good opportunities arise, you will consider them.

Hourly rate: Interestingly, this method of operation can be used for project-based work and if you want to establish a long-term relationship with the agency. It just means you only pay for work that is undertaken on your behalf. If that means five or fifty hours a month, you just pay the agreed fee/s for the person/s performing the work.

It is ideal for SMEs who have many peaks and troughs in the year, so you aren't paying a retainer for a couple of months when there is little or no activity. You just have to be prepared that when the PR requirement is there, the monthly invoice will reflect the level of work undertaken on your behalf.

This leads on to fee structures within agencies. You need to be aware that Directors/Partners/VPs have different (higher) charge out rates than Account Managers, Account Executives and Admin Assistants. You should know what the rate is for everyone who is going to work on your account.

Be aware that expenses are normally additional to the fees (unless you have negotiated otherwise). However, if you have agreed on an overall project cost — perhaps spread out over three or four months — this should include all expenses.

What is your budget?

Setting a PR budget can be extremely difficult or it can be very easy. Easy because that is what has been allocated for the year/quarter and there is nowhere else to draw funds from. Difficult because often no specific allocation has been made to "public relations" (the secretary's time went under "admin") and any costs were apportioned to "sales".

In setting a budget, it is best to decide what your objectives are.

What are your objectives?

Your overall business objectives are usually different to the PR objectives, which would be outlined in a PR program and agreed to by you and your team.

Management's objectives, if written in list format, could in fact be called a PR/Marketing plan, an example of which is below.

In deciding what should be in your plan, input should be sought from key people in your organisation, primarily from sales, marketing (if you have one), your PA and HR.

The PR/Marketing plan should cover a 12-month period, which is the suggested minimum for such a campaign, and could be along the following lines:

• Product launch of XYZ gadget in April
• Expand into wholesale market from May
• Produce a new company brochure
• Increase marketshare of ABC product
• Get company name into media in preparation for a public listing
• Research our customer base to see what they think of us
• Product launch of widget in September
• Develop a crisis management plan
• Built up goodwill in the community
• Investigate sponsorship opportunities
• Create an e-newsletter
• Support for our exhibit at the national conference
• Expansion into Canada/New Zealand/Australia/Asia

The agency will advise what it can do to help achieve your plan within your given budget, or it will advise what budget is required to achieve your plan. The above example is quite complex and would require a considerable investment.

After you have appointed the public relations agency, following indepth discussion with you and your team regarding priorities, strategies and tactics, they would prepare a detailed PR program and schedule, identifying action plans, nominating what material is required, from whom and by when, and setting appropriate deadlines.

How do I select the right agency?

One of the first questions you would no doubt have is, "Do I look for someone who is independent and local or do I look for a national company with an office in my capital city?".

There are many options with many agencies forming affiliations with national and international groups. So while a local independent may not be part of a large national company, they may have the same or similar resources that it can call upon through an international affiliation.

The answer is to find an agency/consultancy that is going to meet your specific needs. Researching candidates' websites provides an excellent insight into an agency and from this, you should be able to produce a shortlist of six agencies that require further consideration.

A phone call to these agencies to talk to someone about your needs should find you eliminate two or three more. Surprisingly, some agencies aren't interested and never return your phone call (cross them out); some will be too small for your needs; and some don't provide the services you require.

If you brief two or three agencies following this process, you will find one that is the most suitable for you.

Briefing an agency is the subject of another white paper, soon to be published. Check back again soon to view this important aspect of working with a public relations consultancy.

www.wmcpr.com.au

White Paper: Appointing a Public Relations Agency: a How-To for SMEs
© copyright 2008 WMC Public Relations Pty Limited, Melbourne Australia. www.wmcpr.com.au

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Article Tags: appointing a PR agency, PR budget, PR objectives, retainer, wmcpr



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