March 19, 2013
When you're comparing two PR firms' offerings, be careful not to confuse price with the value of their service.
This past weekend I read an Value vs. Price.I can sign up for one email marketing service for $75 per month or go with a premier service for $500 per month. If I don’t promote the email and use it to upsell, acquire or retain customers, $75 per month is of little value and may be too much money to spend. If I went with the $500 per month service and they helped to develop my messaging, helped me to implement campaigns for upsell, acquisition and retention… I could succeed in leveraging email to drive hundreds of thousands of dollars. That’s a great value and well worth the moneys paid.Interesting blog post by Doug Karr, who argues in favor of consultative services using value-based selling to determine their prices rather than a flat fees or hourly billing. In a value-based model, Karr said, a firm would work with a potential client to determine the value of its services and then negotiate a price that works for both the firm and the client.
Too much money to spend. If I went with the $500 per month service and they helped to develop my messaging, helped me to implement campaigns for upsell, acquisition and retention… I could succeed in leveraging email to drive hundreds of thousands of dollars. That’s a great value and well worth the moneys paid." – Doug Karr
I know of email services that cost $5,000 per month and large companies that drop six figures on their email marketing because they have experts in house as well as outside vendors. No matter how much they spend, what's important is the value they get in return.
The same is true of public relations. Companies that have little or no experience with PR will often make the mistake of choosing a PR firm based on the price of its services rather than the value the company will receive in return for its investment.
Cheap PR firms often prove incapable of producing results beyond deliverables. "Look at how many news releases we wrote," they say. But news releases alone translate to neither media coverage nor business outcomes. Without the resources and relationships needed to generate earned coverage of their clients, they can seldom point with pride to outcomes they've scored for clients.
Famous sales trainer Zig Ziglar used to love to tell the story of buying his son's first bicycle. Ziglar said they went first to the Schwinn bicycle store, where the salesman told them the bicycle they wanted was $64.95. Ziglar thought the price was too high, so he went to a discount store and bought a bike for $34.95.
A month later, he had to replace the handle bars. The bike was still under warranty, so there was no charge. A month after that, it needed handlebars again and since it was no longer under warranty, they cost $4.50. Six weeks later the sprocket assembly gave way and replacing it cost $15. At that point, Ziglar had spent $54.45 on the discount bike. When the front wheel bearing needed to be replaced a couple of weeks later for another $5, Ziglar instead went to the Schwinn store and bought the $64.95 bike.
His son rode that second bike for 10 years without needing to repair it. The lower-priced bike had ended up costing him $54.45 for six months use, or approximately $9 per month. After 10 years service, the cost of the $64.95 bike worked out to about $6 per year. Ziglar used this anecdote to highlight the difference between "price" and "cost," but you can substitute the word "value" for "cost" and it will still be true.
At Axia, we believe our primary job is to produce positive outcomes for our clients. The investment we ask our clients to make in public relations is related directly to what it will take to accomplish their goals. We're seldom the lowest priced firm vying for their business. Many of our clients come to us after an unhappy – and unproductive – experience with a "cheap" PR firm.
For examples of the value Axia delivers, I invite you to look through our case studies. Our most recently-published study outlines the success of one of our oldest clients, Brightway Insurance, and its growth from a single location into a national franchise powerhouse with Axia Public Relations by its side the entire way. (Kiplinger's recently named Brightway to its list of "8 Great Franchises"). Another powerful study documents a 183x ROI for a mortgage firm that also saw its revenues increase 1,200 percent within two years after hiring Axia.
I doubt we were the lowest price alternative for either of those companies when they started looking for PR. But ask their leaders what they received for their investments and they'll both tell you Axia was a real value.