Public relations: the clients are restless.
Some of the lackluster performance scores we found, of course, reflect unrealistic notions of what a PR agency can be expected to deliver. Moreover, public relations is a such key part of almost everyone's marketing strategy that any glitches tend to pop up immediately on client radar screens. (That's the price the PR community pays for delivering a high-visibility service.)
But the 122 PC software companies we polled aren't just across-the-board complainers. They're able to identify PR functions they feel are highpriority (in particular, contacts with the trade and business press)-- and functions that are expendable (such as speaker placement, event management, and sales lead generation). The companies we polled also see distinct differences in how well their agencies perform these various functions. For a few PR tasks (see chart, page 3), clients seem reasonably satisfied that their agency's work matches the perceived importance of the function. But for most other functions, our survey data shows serious gaps in agency performance.
In fairness, vendors almost never completely satisfy their clients and customers; a small performance gap is normal in almost any sales relationship. The real problem our data reveals is that PR agencies seem to be misdirecting their efforts: Overall, they're delivering better performance in tangential areas, while falling short in areas that matter most to their clients. This pattern becomes especially clear when we drill down into the survey data:
The top job for clients is still press relations: Increasingly,
many PR agencies have tried to position themselves as marketing
and strategy consultants. But the majority of clients still
place much higher emphasis on traditional media communications
tasks. Our survey respondents assigned top importance to an
agency's "trade press contacts" and its ability to "enhance company and product visibility" (both of which scored 4.5 out of a possible 5.0), followed closely by "communication of specific messages" (4.3) and contacts with the general "business and consumer press" (4.2).
But these basic communications tasks are also the ones that PR clients think are handled with the least competence by their agencies. In these four areas the gap between performance and importance ranges from 0.7 to 0.9. To us, these scores look like a pretty clear warning that software clients don't think they're getting enough PR bang for their buck.
Account service gets passing grades: Besides press contacts, agencies typically offer such "account management" services as writing, budgeting, and status reporting. The software companies we polled view these services as distinctly less important than media relations; at the same time they report smaller gaps between importance and performance (average performance gap, 0.5). The account service areas that rank highest in importance are "knowledge of market and technology" and "writing skills" (both 4.1, with a performance gap of 0.7). "Strategic counsel and innovation" (3.8) turns out to be slightly less important to clients than "accurate project budget and cost forecasting" (3.9), but well ahead of "account service and status reporting" (3.3).
Some tasks are (almost) irrelevant: Greg Jarboe of Ziff-Davis has argued convincingly that good public relations campaigns should generate lots of sales leads (Soft*letter, 10/31/92). But the PR clients we surveyed still seem unconvinced: Lead generation ranks near the bottom of our list of important agency functions (3.0), along with event management (2.9) and speaker placement (2.7). Ironically, the average performance gap for these three tasks is a modest 0.1--which suggests that agencies are doing their best jobs on tasks that clients believe are the least valuable.
Agency size doesn't affect performance scores: The 122 software companies in our poll work with agencies that range in size from small 1-2 person shops (25%) to medium-sized agencies with 3-9 employees (34%) to fairly large operations with 10 or more employees (42%). Even though size has a lot to do with an agency's resources and operating style, the clients themselves bring almost identical expectations to their agency relationships regardless of agency size. The survey data shows virtually no size-related differences in client priorities or perceptions of agency performance.
Clients are happier with retainer relationships: Two-thirds (66%) of the software companies we polled have a "continuous" or retainer-based relationship with their PR agency, compared to 34% who work with agencies primarily on a project basis. In almost every performance category, clients with retainer relationships report consistently higher levels of satisfaction with their agencies (average difference: 0.2). The few tasks where project-based relations tend to be more successful, moreover, are low-priority functions such as event management and speaker placement.
Money doesn't buy happiness: When we compare performance scores against PR spending levels (measured as a percentage of a company's total marketing budget), a fascinating pattern emerges: Clients that dedicate large parts of their marketing budgets to PR end up being exactly as satisfied about their agencies' media relations and communications performance as their low-budget counterparts. Regardless of what differences may exist in actual results, the two groups certainly feel they're getting the same quality of media relations work.
But the big spenders turn out to be far less happy about the quality of the account services they receive. Here, low-budget clients perceive an average performance gap of 0.4, while highbudget clients report an average gap of 0.8. High-budget clients are especially unhappy about the quality of agency writing skills (gap: 1.0), budget and cost forecasting (gap: 0.9), and account service and status reporting (gap: 0.6). Clearly, the big spenders want more polish and tighter account management-- and they don't think their agencies are delivering on these expectations.
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|Date:||Aug 8, 1994|
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