Big PR Agency vs. Small PR Agency

By Posted in - Hiring a PR Firm & Raleigh PR Agency on June 4th, 2012

The saying on this sign outside a local grocery market could very well be Clairemont’s motto.

This is a post that I’ve been avoiding writing. It has been on my list of blog topics for quite sometime, but each time I started it, I would think that it had already been done. And perhaps it has. However, when I was recently presenting at Media Relations Day for Leadership Raleigh along with representatives from other Raleigh PR agencies, one of the first questions asked was, “What’s better…a big PR agency or a small PR agency?” Hmm, maybe that question hasn’t already been answered enough. The idea was back on my list.

Before I could write it and just a few days later, I sat in a room of PR agency leaders from across the country at PRSA‘s (Public Relations Society of America) Counselors Academy annual conference as we were told by a keynote speaker and an inbound marketing expert to write this very post of Big PR Agency vs. Small PR Agency. Well, there it went. I had lost my opportunity. Now that 120 other PR agency professionals were going to write it, why should I?

Then it occurred to me. I am the perfect person to answer the question of “Should I hire a big PR agency or a small PR agency?” because I have the perspective of both, having left a large, international agency (considered the world’s largest by most standards) to start what I jokingly and lovingly called the world’s smallest PR agency in the very early days of Clairemont. Just two and a half years later, we’ve certainly grown, but we remain quite small by definition, still under the 10 person count with full-time, part-time, contract and interns.

Now, I know what you are thinking. You think the rest of this post is going to be a great biggo endorsement of small PR agencies, right? Not exactly. I mean, I did choose to change my entire life to lead a small PR agency, but part of that process was thinking about what I loved at the big PR agency and what it did well to figure out how to compete with that…. and of course the things I didn’t like (which honestly were few) and how to overcome the challenges that resulted from being too big. Of course, “it depends” certainly applies since not all large agencies are the same and not all small agencies are the same, but my thoughts are organized in three buckets as follows:

1. Selecting the right team and expertise.

One of the great things about a big PR agency, especially like the one I worked with that had several thousand employees across the globe, is that when a prospect came calling with a need for a particular expertise, it was almost a guarantee that someone in the network had it. That person might not be available to travel from another country or city for the pitch, and he or she may or may not have been available to service the account on a regular basis if we won it. However, that didn’t stop us from including that person’s bio in our response and asking him or her to serve as a strategic counselor to the account.

When I was on that side of the equation, I saw that as a huge benefit. Now, I don’t see it as anything I can’t do (actually do better) as a small PR agency. Here’s why. For one, we don’t tend to go after a lot of business that doesn’t match with our expertise or try to force fit what we do with what a prospect needs just to try to pick up another account. When we are interested in pursuing a new account that makes sense to add a specialist to our team, we turn to PRSA’s Counselors Academy. Through Clairemont’s involvement in this organization, we have access to other PR professionals across the country (some at other Raleigh PR agencies) with many different specialties, practice groups and geographic representations. The best part is that the members of Counselors Academy are other agency owners and senior leaders. These are all people (business owners or partners) who have skin in the game, and I find that makes for a more serious commitment to quality and making a partnership of agencies effective.

Another consideration when comparing a big PR agency to a small PR agency as a potential client is how your account will be staffed.

Big PR agency advantage: With larger staff numbers sometimes comes more people who have capacity to start working on your account right away.

Big PR agency disadvantage: The staffers who have the time available to work on your account might not be the best people for your account.

Small PR agency advantage: Smaller agencies tend to keep a leaner staff. This means that when a new account of interest comes along, the agency can staff up with people who are the perfect fit for the account. In this economy, there’s typically no shortage of candidates. As the owner of a small agency, I know several PR people with different backgrounds and areas of expertise who are looking for full-time employment right now or who are looking to make a switch from an existing position.

Small PR agency disadvantage: If you are in a hurry to get your team in place, you might feel impatient as the small agency takes the time it needs (even someone who is already interested in joining the agency typically needs two weeks) to hire the additional resource. However, you can turn this into an advantage if you are interested in having a say in the decision.

Whether the team is from a big PR agency or a small PR agency, you want to make sure that culturally it is a good fit between your organization and the agency, and that in your gut you feel that you are a good personality match with the people on the agency team. Keep in mind that a PR agency needs to know a lot about your company (and sometimes you) to adequately help you. You have to be able to trust them. Whether you are encountering a crisis or negative situation or simply meeting daily deadlines, you will mostly likely share stressful situations and spend a decent amount of time with these people. Before you hire them, it has to feel right.

One of the best pieces of advice I can give a prospective client is to ask the agency where his/her account will be on the client’s the priority list AND where it will fit in terms of revenue. I can remember cringing in pitches when I was at the big agency and prospective clients would ask how many accounts I managed. Nobody wants to hear that the day-to-day contact has eight or nine other accounts. I’ve also been on the client side. I typically selected agencies that could assure me my account was in the top three of the agency or when it was a designated team or practice group within a larger agency, I wanted to know that my organization would be the team’s #1 or #2 highest paying client. That gave me a sense of the pecking order on those days when all the clients seem to need something urgently all at the same time. (And trust me, that’s a reality of agency life.)

2. Ongoing strategy and additional services.

In a previous post about hiring a PR agency, I talked about the importance of meeting the proposed team when selecting an agency. It will likely be obvious in the pitch which team member has been leading the pitch strategy and who will be driving the development of your communications strategy once the agency is hired. Ask who will be doing that once the account is up and running. That person who is out front in the pitch — ask what his/her role will be on your account in 3 months, 6 months and a year.

My former big PR agency team was typically great about taking the actual team that would work the account to the pitch, but we heard so many stories of other big agencies that would bring in the new business team to do the selling, and the client would never see those people again. This is less likely to happen with a small PR agency as it is less common for the new business team to be separate from the day-to-day account teams.

Another critical question to ask during the selection process is how would the agency provide additional services, should you need them. You want to know how the agency can scale if your account grows AND how it will help you with services that might be beyond what your initial account team can provide.  Many big PR agencies are integrated agencies or part of larger holding companies that also own companies providing advertising, production, media buying and other services. Sometimes those agencies are required to work with their sister companies instead of who they might know is the best fit and can do the best job for you. Small PR agencies tend to want to support other types of small agencies and form networks based on real trust and real projects rather than looking up in directory who they have to provide as a referral. There’s a lot of “it depends” on this with advantages to each. The point is, ask in advance and see what gives you the most comfort.

3. Cost/billing. You were wondering about this one, weren’t you?

You might assume that a big PR agency is going to come with a higher price tag than a small PR agency, and that’s probably not a bad assumption for the most part. Many agencies bill by the hour, some on retainer or project fees, and once in a while you’ll find a firm that does value billing. (Do not mistake the use of the word value here to be associated with savings. It is more about what the firm determines X task is worth to you, the client, whether it takes 3 months or 15 minutes to do it.) Regardless of the size of the agency, understand upfront how the agency plans to bill you and agree on a budget and scope of work.

I find that it is typically in the client’s best interest to be honest early in the process about the budget designated for PR services. Most companies searching for a PR agency had an approved budget before starting the search. Don’t play games. When you try to undercut an agency and get the team to do your work at a lower price than it normally charges, how do you expect the team members to prioritize when forced to choose between doing a task at full-price for another client or at a discounted price for you? This has the potential to have an ugly snowball effect that can result in your work not being the priority, the agency not being properly staffed (because it isn’t getting paid the rate it needs to be properly staffed) and eventually, your account being not serviced properly and/or resigned.

Another trap that agency can fall into when wanting to win on price is the over-service promise. I’ve seen this as the response to “but your rates are the highest of anyone we are considering.” If an agency leader promises you that his team will over-service your account (in other words, the billing rates remain the highest, but the agency agrees to a capped monthly budget, knowing he will have to write-off overages each month), be leery. I have found that my small PR agency owner friends are more likely to say, “Sorry, we just can’t to that.”On the other hand, a small agency might agree to take it on because it needs the revenue, but it might not be the best agreement long term.

At the same time, I’ve seen big PR agencies that feel like they have enough people and perhaps a big enough name to keep employees by asking them to work longer hours to make up for the overage. The reason it doesn’t work in big PR agencies is that most have rigid utilization targets, meaning they are expected to work a certain number of billable hours each day. The hours that are written-off do not count toward those targets, so employees have to work those extra hours their supervisor promised you as the client in their personal time. Can you say fast track to burnout and account team destruction?

Like I said, I’ve worked with agencies at both ends of the size spectrum, and I’ve loved things about both. There are so many factors to consider, and I hope the points above help if you are considering a PR agency selection process. I’m happy to share additional information or answer any questions about hiring a PR agency or specifically the differences between a big PR agency vs. a small PR agency. If you’d like to schedule some time to talk, please email me at d@clairemontcommunications.com.

If you have additional thoughts on hiring an agency and the difference between big and small, please feel free to share in our comments section.

 

Comments

comments

(12) awesome comment(s)...

  • Joseph Thornley - Reply

    June 5, 2012 at 10:46 am

    Dana, you tore a page right out of Marcus Sheridan’s playbook. The “vs.” post. And it seems to be working. Lots of people have visited and shared this post. Including me. 🙂

  • Ris Cowan - Reply

    June 5, 2012 at 6:28 am

    At the risk of sounding self-serving… BRAVO, Dana! Many of us “veterans” have experienced both sides of this issue. Your thoughts were spot-on!

    To the billing issue – I believe agencies bear the burden of proactively explaining billing early on in the relationship.
    Sometimes even as part of the “pitch” (I’d only do this if I believe my process offers a distinct feature/benefit). Certainly before the agency sends the first bill! A client shouldn’t have to ask their agency about billing after they’ve received their first invoice.

    Billing is an uncomfortable conversation because it’s about money. And we don’t want clients to think all WE think about is money. But trust me, that’s what THEY think about – a lot! I believe clients deserve information and transparency about the agency’s billing process right up front. That way, there are no surprises when the bill comes. And no payment delays for the agency.

    Things to ask the agency? Can you explain your billing process? What are your payment terms? How often/when do you invoice? Where will the invoice come from (New York or you? An accountant or you?) Who do I call with questions about the invoice? What level of detail will I see? Can you deliver and receive payments electronically? Can I get a discount if I pay the invoice early (many of the client’s other vendors do this)?

    The point: be early, be thorough, be clear on this uncomfortable part of the discussions.

    Great piece, Dana!

  • Roger Friedensen - Reply

    June 4, 2012 at 11:44 pm

    What a valuable post, Dana. You set forth a clear, concise and – perhaps most important – objective assessment of the big vs. small question. While I never worked at a mega firm that has to answer to a holding company every quarter, I saw at our mid-size firm much of what you describe. I was particularly struck by your comment about the staffing of accounts. While our team was one of the best in the nation, there were more times than I would have liked that we put a junior or mid-level professional on an account because s/he had the time rather than the expertise or drive. That’s one of the things I most enjoy about running my own firm; we have purposely chosen to keep the staff limited so we can select the right people with the right skills at the right time. The benefit to our clients both in terms of outcomes and budget has been enormous, as I know it’s been for Clairemont’s clients.

    As the always wise Eric Morgenstern says, a “one size fits all” strategy is, at best, an illusion. Many client organizations who work with the Omnigods of the world still would do well to retain a small firm that brings pertinent ideas, perspectives, questions and experience to the table. Whether an organization hires one firm or multiple firms, the only important measurement is whether it is better able to do the work it needs to do to succeed.

    Thanks again for a great post, Dana. Nicely done!!

    • Dana Hughens - Reply

      June 4, 2012 at 11:52 pm

      A sincere thank you, Roger. The fact that you and Chuck both represent firms that could be considered Clairemont competitors and shared your positive comments (as well as ongoing support) speaks volumes to the collaborative nature of smaller firms and of PRSA’s Counselors Academy members. I mentioned in the post how we call on each other when we need specialty area experts, but I failed to mention that we also commonly refer prospects when we know a friend’s agency is a better fit. I think this is one of my favorite things about leading a small agency. It is really satisfying to have that choice.

      Looking forward to seeing you soon!

  • mitch leff - Reply

    June 4, 2012 at 3:56 pm

    Great piece, Dana! As one who’s also worked at really big agencies, I think you hit most of the key points.

    • Dana Hughens - Reply

      June 4, 2012 at 4:34 pm

      Good to hear from you, Mitch. I hope all is well with you!

  • Eric Morgenstern - Reply

    June 4, 2012 at 2:26 pm

    Excellent perspective, Dana. There’s never a “one size fits all” answer to this eternal question.

    It’s not about size (okay, no “man” jokes here), it’s all about fit. Clients choose their agencies based on who is their best choice. And that’s always a subjective, personal decision.

    Size matters, but those of us on the smaller size always out hustle and out think the big boys….or we wouldn’t still be here!

    • Dana Hughens - Reply

      June 4, 2012 at 4:34 pm

      That’s right, Eric… we have to compete with agencies of all sizes to survive and thrive!

  • Abbie S. Fink - Reply

    June 4, 2012 at 2:18 pm

    Love this post. There are benefits to “big” firms, benefits to “small” firms. We shouldn’t make assumptions about either.

  • Chuck Norman, APR - Reply

    June 4, 2012 at 2:12 pm

    Well done Dana. I have shared this with my network.

    • Dana Hughens - Reply

      June 4, 2012 at 4:29 pm

      Thanks for sharing. I definitely thought about you while writing this, and I’m grateful for the collaborative relationship we share as two Raleigh PR agencies. (Okay, as a Raleigh agency and a Cary agency.)

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