I have many people to thank for helping me learn what it takes to become consulting advisor to PR firms. Some of those who were always there for me are Al Croft, Rick Gould, Michael Lasky, Jack O’Dwyer and Evan (female in case you do not know her) Antonini. As most of you know, Al Croft is no longer with us. He left us all a legacy of PR advice that will last for many years to come. I dedicate this column to Al. Thank you Al for all you have helped me with. Here is some classic AC advice!
Now that it seems we are out of gloom and doom, the stock market is up and the merger and acquisition market is back to being active, you need to make sure you are on the profit track for the future.
Stop or drastically cut back on over-servicing to hang on to them at any cost. Do something energetic and positive to eliminate or reduce the time you are investing on behalf of clients without getting paid for it. Get a mid-month report on time invested against retainer, project or hourly clients so you can put the brakes on if you need to.
Insist that employees submit time sheets daily so that you can always have current information on the exact amount of time being invested on behalf of clients. Do not let staff get away with logging time weekly or even longer. Set an example yourself. You know that you can hardly remember what you did yesterday, much less remember what you did five days ago.
If you are consistently going over-retainer or over-budget because the client keeps heaping work on you or changing signals in the middle of a program without an increase in retainer or budget, and you have the time records to prove what this extra time investment is costing you, talk to your clients. Most clients are not out to force you to operate as a non-profit organization. But unless you have a frank discussion with them, they may not even realize how much they are costing you. It is not your clients’ responsibility to make sure your firm earns a decent profit. Hopefully, you will be able to cut back on some of the work or the client will find some budget flexibility.
If you are consistently going over-retainer or over-budget because your staff is not operating efficiently; if they can’t bring themselves to “stop work,” then you have an entirely different problem. If you have budgeted wrong, now is the time to find that out as the basis for future budgeting.
Often, when Al conducted account management seminars for agency staff, one of the most memorable discussion points–particularly with less experienced people–is the idea that it is okay to stop work when you have invested as much time in a client’s project as it needs to get the desired result.
Being able to recognize the point when it is okay to stop work is a sign of increasing professional maturity. (When staff feel that the time has come to stop work or they are over budget, advise them to talk to agency management before they do anything further.)
If all else fails; when there is no other way to plug the profit leak; and new business prospects are encouraging, walk away! What is the point of continuing work on a large client if you cannot do good work and cannot make any money on the account?
Raise Your Hourly Rates
Consider this: if your account people bill an average of 1,400 hours annually and you raise your rates an average of $10.00, that is $14,000 increased revenue per person annually. If you have 20 people, that is $280,000 additional income! If you can add 15% to your bottom line, you will be a lot closer to Fat City!
Pick Your Clients
Because there did not seem to be anything better out there, have you been hanging on to some small, miserably, poor-managed, never-gonna-make-it clients who bore your staff but whose revenue helps keep the lights turned on? Well, maybe, within reason, you do not have to do that now. Maybe there is more opportunity to cast your bait where bigger and more attractive fish are lurking; clients who give your best people the chance to do work they are proud of and which doesn’t put them to sleep in the middle of the afternoon; and on which, incidentally, you will probably make more money.
On the other hand, if the timing is not right just now to case out these win-less wonders adrift, at least spend some heavy hours deciding and planning how to reel in the kind of clients you really want.
While you are at it, consider whether the time is ripe to deal out some raises you have been holding back on, refurbish some perks that may have disappeared during harder times or structure a new bonus system that really motivates people.
You may want to consider a new business bonus–say 10%. If a staff person brings in a $250,000 account, consider a $25,000 bonus because a staff person brought in the account. Now that is motivation for all your staff!
Think how great it is to have clients who think you are terrific and staff who feel the same about you.
Next month I will write in part on how to deal with people who always want a deal.