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Is It Time to Include PR in the CRM Mix?
A new pricing model pegs publicity to return on investment.
Posted Oct 30, 2008
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Most CRM practitioners shy away from including media relations into their job function, and for good reason: It's been nearly impossible to measure. But a new public relations agency model may be solving this problem. While traditional retainer-based PR agencies sell hours, not outcomes, this new model demands measurable return on investment for the customer-acquisition dollar.

Pay-for-results PR
The model is pay-for-results, a simple concept in which companies pay only for the publicity they receive. The agency takes on 100 percent of the financial risk.

Companies tailor the type of publicity they need to the available budget. Basically, companies specify in advance the coverage they are willing to pay for. They pay only for the results actually realized, in media they have pre-selected and at a price they have pre-approved. No upfront or back-end fees are involved, nor is there a long-term contract. The rates for placements are provided upfront, usually on the agency's Web site and prior to each placement opportunity.

Traditional PR firms vs. pay-for-results firms
Pay-for-results PR firms provide publicity, and primarily publicity. They do not provide the proposals of service, PR plans, strategy, counseling, reports, meetings, etc., that are offered by full-service firms. And they do not guarantee that a story will run; they simply guarantee that the client gets stories published or aired in the types of outlets targeted -- or else the client does not pay. In fact, some pay-for-results PR firms will not charge the client unless the client is satisfied with the resulting story.

Before jumping into pay-for-results PR
CRM practitioners that are seeking to employ a pay-for-results publicity firm should have the following:

  • a familiarity with PR
  • well-established product/service messaging
  • a firm grip on their target markets
  • their overall corporate strategy in place
  • a strong corporate spokesperson
  • a dependable internal "go-to" person
  • customers willing to serve as references

Pricing for a story placement
Pricing for pay-for-results PR should be transparent. A quality pay-for-results firm posts placement fees on its Web site or makes them readily available, and charges no fees other than a placement fee.

Fees at a pay-for-results firm are usually established by the value of placement received, and keyed to the quality of the story and the readership/viewership of the media outlet. For example, a full feature on a company or its products in The New York Times will cost more than a mention in a small-market newspaper.

Although pay-for-results clients are completely in control of their spend, CRM pros should think about a budget well in advance and evaluate it on a quarterly basis -- not monthly as they might in a fixed-price retainer relationship. Costs may vary substantially from month to month with a pay-for-results firm as publicity opportunities fluctuate depending upon a variety of factors such as breaking news, editorial calendars, and major industry events.

Pay for services
Some pay-for-results firms offer other services, such as writing, securing speaking engagements, or media training, on an as-needed basis. Clients should expect to pay by the hour for these additional services. Hourly charges should not exceed $175.

Hybrid offerings
Some companies need a strong initial PR program to assure messaging is clear and differentiated, target media/analysts are defined, spokespersons are trained, a written PR plan is in place and ready to execute, and so forth. Some pay-for-results agencies will offer a program with these types of elements to clients for the first few months of a relationship. Clients then may decide if a pay-for-results agency is a good fit for their companies. A pay-for-results agency may also have a "sister" full-service PR firm in which the client can move from a retainer arrangement to a pay-for-results model -- or vice versa. (Some firms keep the same account team in place.)

Questions to ask a pay-for-results firm:

  • How is pricing for a story placement determined?
  • Does the agency rely on press releases? (A good pay-for-results firm knows that press releases -- except those required by law -- are minimally effective. Story ideas need to be "pitched" to journalists on a one-to-one basis.)
  • Do you have to accept all the media opportunities offered? (You should be able to say "no" to potential placements not in your target area.)
  • Does the agency offer services beyond publicity? (You may need additional help at some point in time.)
  • Does the agency guarantee placement? (If so, be wary. This is in direct opposition to the PR industry's ethical guidelines. A pay-for-results firm should only "guarantee" that if a story does not run, the client does not pay a fee.)

CRM practitioners should consider how their companies can utilize the power of the press and prove results for the dollar spend. A pay-for-results PR firm might be their answer.

About the author
Richard Virgilio is managing director of PayPerClip, a pay-for-results PR agency. For more information, visit www.PayPerClip.com.

Please note that the Viewpoints listed in CRM magazine and appearing on destinationCRM.com represent the perspective of the authors, and not necessarily those of the magazine or its editors. If you would like to submit a Viewpoint for consideration on a topic related to customer relationship management, please email viewpoints@destinationCRM.com.

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