Friday, 7 March 2008

Garbage In; Garbage Out - A Contrarian View on PR Agencies in India

I am a little tired of rants including mine so here is a contrarian view, as you can see I do this contrarian thing quite well (or badly depending on your world view today). This post originally started as a comment and as it grew embarrassingly large, I decided to actually graduate this to a post instead of the original comment it was meant to be!

Client and PR relationships are like marriages, they feud, but can"t stay without each other and more or less work out if both parties give it a half decent shot. There are exceptions on both ends and so let's not go there today for the sake of the majority. On the specific question of clients not paying or paying too less or other grouses, I see essentially see this phenomenon in two parts.

Product or Services Differentiation

Firstly, it is an ability to differentiate your self in positioning. The PR Firm market has been a commodity market for the longest time with no entry barriers for hole-in-the-wall mom-and-pop shows. I saw this happening 10 years ago and today is no different. There is room for both and it is good that entrepreneurship is still a possibility in the market place. What is the big difference in working for the big 5 PR Firms in the country (if you can actually figure out ever who they are by number of people employed or revenue in a transparent fashion, beyond claims) and the home office 2-3 people outfit, one can argue. I am sure there are a lot of differences in offering and durability in time of intense attrition but we who profess to be champions of branding do a rubbish job of its when it involves our own brand characteristics and touch points across websites, corporate identity markers from business cards to collateral branding including electronic collateral like the microsoft power point, the one leg of the one legged, PR Industry are all pretty crap.

How many people can recall different practices in a large popular PR Agency unless they happen to be a specialist firm? If I take names I will be slaughtered as these are all friends, colleagues, ex-colleagues, so I'll be prudent and duck my tail in on that but there are no many opportunities lost because no one in the leadership is really thinking about it beyond lip service and also-ran measures. Practice differentiation is not something just to do as a business whenever a fat client with a fat retainer demands it or when a projects to a reusable solution offering. It too needs the branding and marketing that will differentiate it as an offering and help you charge a premium for the effort in doing so.

Text 100 first changed the retainer landscape in the country in late 1990s with retainer values far in excess of what was then 'going price' for retainers in the Tech PR game at least. Again without taking names, there were enough nay sayers who never thought such retainers were possible or rated the survival chances of Text 100 in India. When the dust settled, history had been made with the Microsoft Account and there were many red faces. To be fair Text 100 came with an international mandates, best practices, processes but whatever local clients they picked up too came at larger retainers.

They were leaps and bounds ahead in differentiation, branding, positioning, and clients loved them and paid too. This gave hope and eventually benefited so many other legacy PR Firms who over a period of time started to attain similar retainer values because they moved up the value chain and comparing. This is when they had all along been largely sedentary about the possibility of a retainer being more than a lakh or two. There are many other examples of large retainers in Automotive, Financial Services, and Real Estate etc.

Let's talk for a minute about the client perspective here. What clients complain about is a lack of employee stickiness and just getting legs and no brains when they employ a PR Firm. If you sit on the client side which I have many times with multiple PR Agencies, these issues become important, so there are two sides to this coin! Don't kick what you eat as there is seldom a one sided argument and there is no smoke without a fire!

So it isn’t like clients don’t pay. If you think you have an offering that deserves more (and good old vanilla media relations ain't going to hack it partner) Pitch it right, be bold, be brave, and state your value proposition up front, brand your offering and you can get away with a screamer for a retainer!

Lack of Employee Stickiness and Intellectual Capital Capture in Public Relations Firms

The second important aspect one would do well to consider here involves employee longevity. Measures that arrest attrition including real dedication to employee training, specialization in vertical or horizontal practices, succession planning and an ability to see the next step-on-the-ladder.

There are philosophical and conceptual question there - what profitability are you after in terms of a gross margin is something that needs to examined in the interest of growth and scaling up. 'Reverse price arbitrage', this time in favor of employees and an inconvenient analysis of employee cost-to-company, as compared to retainers will show the employee wage bill as a percentage of revenue. What an owner, or promoter forsakes in terms of pay and work environment can only be good for the business but it is a question of rationale and greed. I have seen many owners and promoters lash out about a lack of loyalty and commitment in employees while they themselves have zero empathy in return. Why is loyalty and commitment only an attribute expected of the employee and not the employer? If you want your people to stay please take care of them, treat them like individuals with aspirations and pay them right! Pay peanuts get monkeys - sound familiar?

So that is what I meant by garbage in- garbage out. Although there are good things happening out there in pockets, I am inherently in love with the idea of a consolidation based on market and supply dynamics, big names with standard global practices coming in can only mean better things for the industry and things moving to a new equilibrium.

The culture of crony PR firm associations has no done anything for the Industry or maybe I have not seen it and inconvenient issues never surface as these may not be in the best interest of constituents.

Let us embrace change and not stay shackled to the hackneyed tenets of a accidental birth, as India moves into the spotlight with its integration with the world economy, the future is bright for all of us!

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