New Business Development Benchmarking Data for Independent PR Firms and Consultants
Gini Dietrich, Founder & CEO, Arment DietrichLike many other entrepreneurs, my team and I spent January finalizing our 2017 goals and objectives. Ideally, we’d have liked to have compared our performance versus our peers. But without an affordable and accessible source of that data, we instead benchmarked against ourselves.While looking at your past performance is certainly a good starting point, having an industry benchmark to reference can help you set attainable stretch goals, and identify areas you haven’t been focusing on but should.That’s what inspired us to conduct our first State of the Independent PR Industry Report.In addition to setting baselines for typical per client revenue and average client relationship length, we also wanted to identify the challenges PR firms are having in planning for sustainable growth.Here’s what we found.Committed Client Relationships Are the NormAlthough 14 percent of firms reported primarily taking on client work that spans a year or less, more than a third (41 percent) have primarily long-term client relationships lasting three years or more.This finding confirms what we’ve heard anecdotally from other PR firm leaders. This makes sense when you consider the average tenure of a CMO is 44 months. Although agencies aren’t automatically shown the door when a new CMO comes in, it is often difficult to retain the business long-term after a leadership transition.Budget Issues Leading Cause of Client AttritionWe’d been hearing from other agency principals that economic uncertainty was causing some clients to downsize their PR agency spend, or even bring PR in-house. Although the average client tenure didn’t appear to be affected by this issue, the most commonly cited reason for clients leaving (49 percent) was budget constraints.Further, a number of respondents noted there being a “race to the bottom” in client retainers, with many clients not understanding the value of PR. We can likely trace this perception by dissatisfied clients of PR being a “nice to have” instead of being a vital business growth lever to a lack of measurement. Without agreed upon metrics in place at the start of PR engagements, access to marketing data, and measurable outcomes agencies will continue to struggle to prove their worth.Business Development Activities Ad Hoc at BestAn impressive 72 percent of respondents have a short business sales cycle, closing a deal in less than 90 days. Unfortunately, this rapid sales cycle is not due to having a robust business development pipeline in place. Rather, the bulk of those surveyed noted word-of-mouth as their primary business development tool.Very few of the agencies surveyed had a documented, robust business development process in place to consistently grow their organizations. Agency founders often feel business development is a role only they can fill. Yet their schedules are filled with client service and myriad other day-to-day operations of running their businesses. This has caused a chicken-and-the-egg situation for many firms, inhibiting their ability to scale.For more insights into the state of independent PR firms, take a look at our full survey results, Benchmark your own firm against the numbers, and see if your client retention and revenue numbers are on par with your peers.It can be easy—especially without data—to become complacent and think the business results we are achieving are the best we can do. But if we wanted easy, we wouldn’t have started our own firms. We can do better. [author]About The Author: Gini Dietrich is the founder and CEO of Arment Dietrich, an integrated marketing communications firm. She is the author of Spin Sucks, co-author of Marketing in the Round, and co-host of Inside PR. She also is the lead blogger at Spin Sucks and is the founder of Spin Sucks Pro.[/author]
