Articles - "So stupid! 10 PR agency mistakes to avoid"

PR agencies could make tens of thousands more profit if they stopped making simple negotiation mistakes. It’s not dumb to make a mistake. But what’s really dumb is to repeat the same mistake. Profitability has declined for many PR agencies. My work with agencies typically sees a substantial improvement in profitability, increased confidence and most importantly an improved client/agency relationship. So what are the top 10 mistakes PR agencies make?
Mistake 1: Price crumbling. Clients will challenge your price. It’s their job. However, price crumbling too quickly will cost you dearly. Clients will see your willingness to drop your price not as generosity, but that your original price was over-inflated.

Mistake 2: Lack of preparation. It is common to skip preparation before negotiation meetings and phone calls believing you can “wing it”. There are few areas in life where preparation pays off more than in negotiations.

Mistake 3: Thinking great “client service” is always saying “yes”. Agencies are haemorrhaging profits by being too quick to say “yes”. Great client management should be about delivering loads of value at a fair return for the agency.

Mistake 4: Tolerating unprofitable clients. Unprofitable clients are often held onto because they are seen as a significant contributor to turnover or seen as “important names”. How many “trophy clients” can you afford? These unprofitable clients, “the profit vampires”, suck out agency resource and profitability.

Mistake 5: Over-dependence. What percentage of your revenue comes from your top three clients? If it’s more than 60 per cent, beware. Client-agency relationships which are out of balance produce poor work, become increasingly unprofitable over time, and are rarely motivating for the agency.

Mistake 6: Accepting poor briefs. Verbal briefs, or poorly thought through briefs, allow clients too much “wiggle-room” and the opportunity to ramble. Written briefs force the client to focus and prioritise. Briefs with no budget or budget guideline are also highly risky.

Mistake 7: Presenting proposals to clients that are unprofitable to you or pitching your price too low. This can be the result of aggressive competition. Or the lack of confidence can be when the agency is on the back foot, perhaps during a re-pitch or a new senior client questions every price.

Mistake 8: Short-term generosity becoming long-term obligations. We provide something of value as a goodwill gesture, often intended to be a one-off favour. For a variety of reasons, the gesture becomes expected by the client - an established precedent.

Mistake 9: Lacking negotiation expertise. Poor negotiation skills among many agency personnel are costing agencies a fortune - possibly 15 to 20 per cent of their profits. We negotiate all the time with clients. Negotiation comes into nearly every area of agency client management.

Mistake 10: Scope creep. The client keeps pushing for more and more to be done within the existing budget. These extras are somehow expected to be included within the original price. How much are these mistakes costing your agency, your confidence and your relationships with your clients? How much more profit could you be making?