In the PR Agency Search, Experience Beats Hourly Rate

It’s no secret that companies are looking to get maximum value from their PR firms. And in that quest for value, when selecting PR firms,

Photo Credit: Library of Congress

some companies give heavy weight in the evaluation process to hourly rates.

This can be a mistake, because hourly rates do not equate to actual value.

Years ago, I was a corporate PR manager. While my company had a PR agency of record, I hired a smaller firm with a higher hourly rate for a special project. And it turned out to be a great value. Why? Because the owner of the smaller firm was able to accomplish in one hour what the lower-rate agency of record couldn’t accomplish in two weeks of solid work.

The difference between the two efforts – other than thousands of dollars in potential cost – was the appropriate industry experience, knowledge, contacts and context.

Many clients have learned the hard way that the agency with the lower hourly rate can often be the more costly agency – because it takes them longer to get the job done … if they can get the job done at all.

The principal of that smaller PR firm I mentioned earlier told me a story about the great scientist, Charles Steinmetz, and his encounter at Ford’s Rouge Plant in Dearborn almost 100 years ago:

An electrical genius with more than 200 patents to his name, Steinmetz worked for General Electric for a number of years, where he earned the nickname “the wizard of Schenectady” (GE’s hometown).

Ford was having problems with a giant generator at the plant, and the company’s own electrical engineers couldn’t resolve it no matter what they tried. In desperation, Ford called Steinmetz, to the factory to see if the electrical wizard could solve the problem.

Steinmetz asked only for a pencil, paper and a cot, and refused any help from the Ford engineers. After listening to the generator carefully and performing calculations on his notepad for two solid days and nights, Steinmetz arrived at the solution.

He requested a ladder, climbed up it and made a chalk mark on the side of the generator. He told the incredulous Ford engineers to remove the plate that had been marked and to replace 16 windings on the field coil.

The engineers did as instructed and the generator performed perfectly, much to Henry Ford’s delight … until he received an invoice from GE for $10,000. While he conceded Steinmetz’s success, he balked at the cost and asked for an itemized bill.

Steinmetz responded personally to the request as follows:

Making chalk mark on generator    $1.

Knowing where to make mark         $9,999.

Ford paid the bill. He realized that he wasn’t paying $10,000 for two days of a man’s time … but for the decades of experience and the unique knowledge that enabled Steinmetz to identify and resolve the problem in short order.

Ford paid for the experience that got the desired results … and actually saved money in the process.

Whether this story is true or not, it underscores an important point: When you’re looking at PR agencies, don’t just focus on the lowest hourly rate. Look at the PR firms’:

  • Experience in your market;
  • Knowledge of the trends, issues and players in your industry;
  • The time they invest in keeping up with your industry and market;
  • The relationships they have built with the media and organizations in that sector; and
  • The results they have generated for companies that are similar to yours.

And, most importantly, look at the actual people at the PR firm who will be applying their insight, knowledge and experience on your behalf.

Your best value will be a Steinmetz … the firm with the experienced and knowledgeable people to get the job done correctly, quickly and efficiently.

And that’s true genius!

One Comment

  1. Posted September 5, 2017 at 3:41 pm by Jim Koscs

    Jim, thank you for posting this on LinkedIn (where I was a bit shy about commenting) . This topic is always spot-on for this field, and perhaps especially so for writing. Just last week I was asked to quote my hourly rate, and I bristle every time I get that question. I usually quote on a project basis, taking into account not only how long it will take, but the value of my knowledge, experience and creativity. Maybe 20% of the time, I’m asked to break down that fee. Break down into what? It’s not like the PR agency I worked for in the 1990s, where it seems half the staff would somehow bill time for “reviewing” everything passing through just to keep their U-rates up. Bad value for the clients, all of which eventually abandoned the firm. I do have a retainer with one client, which had no problem with an hourly rate I quoted and has expressed (on several occasions) its appreciation for the value of my knowledge/experience. I’ve been fortunate that other clients have understood this, as well, yet after 19 years still find myself having to explain that to some prospects.

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