Buyers beware! Another lesson on why hourly billing might be unethical.
Common pricing tactics other public relations firms employ are highly concerning. And based on what some of our newer clients are telling us, it seems to be a more common occurrence.
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From what we’ve heard, some PR agencies are estimating a lower-than-realistic monthly PR program investment, or what some agencies may call a retainer. The agency may propose you pay this retainer each month, and they will bill you some agreed-upon hourly rate against it. This is just one example of unethical PR pricing to watch out for.
Here are three dishonest pricing methods PR firms may use to get your company to pay more.
1. Quotes a low retainer
To win your business, the PR firm might low-bid their services. For your company, choosing a service that costs less seems more attractive than hiring a PR firm that quotes you for a higher monthly investment.
Because the more cost-efficient option sounds good to you, you hire them.
What you don't realize is the agency intentionally underquoted you. From day one, they've planned to eventually claim more hours.
They may blame this on how long it takes for you to respond to them, how many times they have to revise their work, or how long it takes to get your approvals. So they’ll recommend your account requires more hours to reach the stated and agreed-upon outcomes and objectives. Or maybe they'll admit they need more hours than they thought.
While you chose a PR agency with a lower-priced option, they weren't the cheapest price at all. And once you agree to more hours, this agency will likely keep coming back to you for more.
2. Quotes a low hourly rate
Another way a dishonest PR firm might deceive you is to quote you a low hourly rate for their work. Let's say they quote you $150 per hour or less, and other more sophisticated firms quote you $175 or more per hour.
It may seem like $150 an hour is cheaper. But if this firm takes four hours ($600) to write a first draft news release and the $175 per hour firm takes three hours ($525) – with all other variables being equal – who's actually cheaper?
This seems contrary to the way we evaluate pricing, which is why we believe hourly billing might be unethical. That's why, whenever possible, we prefer to charge a flat rate based on the agreed-upon scope of work and/or the value of our services and outcomes to your organization.
3. Fails to agree to a flat rate
Some PR firms know a more sophisticated agency, like Axia, is actively accepting flat-rate engagements. But, they will claim it's too hard, impossible, or even unfair to expect them to offer this service to their clients because “you never know how long the work will take.”
We believe this is an excuse. Either they're unwilling to stand behind their services, they're inexperienced, or it’s an unsophisticated firm. When you're experienced and have produced similar work for dozens of clients, you know how long it takes to do things. You may have the tracking systems to identify averages or the experience to estimate services.
There may be variables and external forces out of your control, but charging hourly may only give benefits and protection to those who are inefficient. We hope this post helps you avoid the false benefits of an unethical PR firm not committed to integrity, ideas, relationships, results, and improvement.
Comment below which one of these you've experienced and which one is your personal pet peeve. Book a free consultation with us if you'd like to talk about your current public relations engagement.
Clients love Jason’s passion, candor, and commitment as well as the team he has formed at Axia Public Relations. He's advised some of America’s most admired brands, including American Airlines, Dave & Buster’s, Hilton, HP, Pizza Hut, and Verizon. He is an Emmy Award-winning, accredited public relations practitioner, speaker, author, and entrepreneur and earned his certification in inbound marketing. He founded the PR firm in July 2002. Learn more about Jason.
Photo by Andrea Piacquadio
Topics: PR tips