Showing posts with label Revenue. Show all posts
Showing posts with label Revenue. Show all posts

Monday, March 15, 2010

As the PR industry embraces Web 2.0, PR suppliers fail to keep pace

Posted by Greg Matusky
More than anything, Web 2.0 is about lowering the costs of doing business while delivering better results, more quickly than what could be achieved in the paper-and-pencil or even Excel world of yesterday.

We're all about that here at Gregory FCA. Our social media services leverage the power of Web 2.0 to let our clients direct their own narrative, own and develop their digital channels, and deliver their message directly to online target audiences. This helps them win visibility, sell more products or services, and establish thought leadership.

So why aren't our PR suppliers keeping up with the industry's commitment to innovation? Why aren't they helping to reduce our costs, and in turn, those of our clients?

At the beginning of the year, a number of suppliers unilaterally increased fees at a time when innovation should be lowering the cost of doing business.

Some vendors did it more egregiously than others. Last week, on a call I had with one national provider of PR services to the industry, Gregory FCA insiders listened as the vendor's management team explained a recent 35-percent rate increase.

It wasn't based on better service or greater value. Rather, the vendor claimed that the rate they once charged was simply too low, and that because of their mistake, Gregory FCA has to swallow a one-third rate increase. I told them point blank that they are risking offending the very people who pay their bills, Gregory FCA's nationwide clients.

I was then told that their so-called pricing flaw is now Gregory FCA's problem to explain to clients -- clients that have built their budgets based on past pricing. The vendor's faulty logic was made even more infuriating by the fact that it took this supplier two weeks to return our call, and the fact that they recently changed the way their product is distributed, vastly reducing its value.

It got me thinking. If my clients are asking us to do more with less and if we have been able to do so through innovation and the power of the Web, then it's time that suppliers to the PR industry start working with agencies to reduce their costs, and not annually increase fees as if it's the go-go years of the tech or real estate bubbles. Here's a game plan for how to accomplish just that.
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