The Bull Dog Reporter
October 9, 2008
PR Agency Execs:
Ratchet Up in a Down Economy
By Frank Zeccola, Senior Editor, Bulldog Reporter NewslettersMain Street
Last week, as Wall Street and Main Street frantically reacted and responded to the financial crisis, Warren Buffett gave a key piece of advice to investors and business owners while speaking with Charlie Rose: "You want to be greedy when others are fearful," Buffett told Rose. This may seem counterintuitive at first glance—but if you're willing to take the risk, it will pay off when the market rebounds, Buffet asserts.
As the crisis enters its second week, PR agency experts are starting to think like Buffett. At the PR Agency Management '08 Summit (PRAMS) last week in New York, hundreds of PR agency executives met to discuss a number of challenges and opportunities in the agency game right now. No doubt, the biggest thing on everyone's mind was how to succeed in the financial crisis. Not surprisingly, advice from keynoters and speakers at PRAMS echoed Buffett: "It's obvious but scary: Do what others are not doing," said Steve Cody, managing founder and partner of Peppercom. "Instead of taking the ostrich route and sticking your head in the sand, you have to be proactive and speak on behalf of the PR profession."
The take home: "My biggest piece of advice is to spend in a down economy," Cody said. "The smartest thing you can do right now is to be out there talking about PR and evangelizing the industry by writing bylined articles, blog posts and other outreach. There will be less clutter—and an opportunity for you to show that companies should invest in PR."
The lesson is simple: Do what you do best. Get out there and promote your agency and the PR industry as a whole. In a down economy, you now have to spend on your most important aspect and strength—yourself, as a marketer and a communicator. Take time to focus on your staff and market your agency as thought and opinion leaders. Use all the tools available—from traditional mediums like speaking And that's just the beginning. Here are more in-depth tips for winning in a losing economy from the Buffetts of PR management:
1. Refocus on your staff: Inspire opinion and thought leadership. "Don't take your eye off of what's most important: Your staff," says Mark Raper, chairman/CEO of CRT/tanaka. "Smart PR professionals strengthen their relationships with their top performers—especially during times when business is slow. Know who your opinion leaders are and what they do best. Figure out who your up-and-coming leaders are—and task them to get out there and make a name for the agency."
The key is effective time management: "There's no such thing
as invaluable time, even if it's not billable," Raper adds. "You have
to be more aggressive in marketing yourself and recruiting clients. Be prepared
to tighten your belt—but avoid cutting on marketing yourself. If you don't
market yourself, you will lose in any economic environment."
Keep in mind: "At the same time, it's important to take the time to get to know your own clients better." Raper also outlines non-staff cutting ways to get through the downturn: "For example, this year we're looking at scaling back on our big annual retreat by 20 percent," he says. "We're also looking to switch out a percent of IT costs and other operational things."
2. Market into the recession. "During any economic downturn—whether it was the dotcom bust or any other recession—PR agencies have grown," says Darryl Salerno, president of Second Quadrant Solutions. "The reason is that about 30 to 35 percent of clients will change hands. That means that someone has to win back one-third of all business—which is in the billions of dollars. Avoid the temptation to be overly timid—and market into the recession. Enter awards programs. Publicize events. Write op-ed pieces and engage in thought-leadership campaigns. Develop as many relationships as you can and get out there and network. Now is the time to treat your own agency as your number-one client. Allocate resources to marketing yourself, and if you do it right, you can grab a piece of those billions of dollars that will change hands."
3. Embark on consumer education campaigns. "Once the dust settles, there will be a real need to educate consumers about what just happened in the financial industry," Salerno says. "It was a crisis of consumer confidence, and the upside now is that there will be an opportunity to take the lead on improving consumer confidence. We will need to embark on a campaign of education and explanation in terms of some of the misunderstandings that happened."
4. Take every opportunity to sell yourself in every available medium. "Now is the time to practice what you preach," says T.J. Walker, CEO of Media Training Worldwide. "You have to be out promoting yourself during any spare second that's not full of billable hours. Take on your number-one pro bono client: You. Hit every opportunity to speak at a Chamber of Commerce event or Rotary Club. And take advantage of social media. How many PR firms have active blogs with daily content? How many firms are producing daily video? Learn about and use all the new technologies we love reading about. Don't sit around and commiserate. Instead of talking about writing the great American PR manual, do it. The highest priced PR pros have a deep and thorough expertise. But you're not an expert unless you write, speak and talk about the subject in every medium and in front of every audience."
5. Avoid the Ken Lay Effect: Work with the best—and don't be afraid to fire unworthy and dishonest clients. "We don't have to work with the Ken Lays of the world—and we should only represent worthy clients," says Bill McKibben, senior counsel, The Great Lakes Group and author of Play Nice, Make Money. "Why would you want to do anything else? Why represent people who want you to lie, mislead and misrepresent?"
McKibben admits that there's no surefire way to spot potential "Ken Lays" in initial client meetings. However, he stresses that you have to be willing to ditch dishonest and unworthy clients as soon as you realize that you're dealing with them: "It then becomes a fire-the-client situation," he says.
While you will lose out on business in the short term, "Future clients will respect you more—and pay you more," he says. "And you will get a seat at the table. Would you rather be the trusted advisor of the CEO, or a press release pusher?" he asks rhetorically. The key is honesty: "There's never been a time that's called for more candor," he says. In the current economic environment, "The public is desperate for people and companies to tell the truth."
6. Manage client legal and ethical expectations: Put ethics back in the hands of communicators. "In too many companies, ethics and compliance are in the same hands: The legal department," McKibben says. "The problem with this kind of corporate structure is that, while lawyers know where the legal line is, the ethical line is someplace else entirely." As a communications professional, you have to act as the "canary in the coalmine," he says. "Your job is to sit in on the board of directors' meetings and be out among the public to sniff out anything that could potentially cross the ethical line. We have to be the first to smell and see a scandal. That's why ethics must be in the hands of communicators and not lawyers."
He points to the HP corporate board scandal as evidence. "HP had lawyers covering ethics," he says. The result was that, "They didn't draw the ethical line correctly."