Duct Tape Marketing

It's the question you are asked most often, but how much thought have you ever given your answer?  Learn a powerful re-frain to create more clarity and strengthen your business results.

Better Marketing Value for Less Money

-- Bill Gates

As unlikely as it is that Bill Gates would ever be down to his last million dollars, let alone a single George Washington, the fact remains that it’s a powerful endorsement of the power of PR.

Still, when the economy is tight and corporations yank hard to get their belts down to that last notch, PR is usually one of the first few items on the budget that’s frozen or cut completely. To bean counters, it’s an easy choice.  Because it’s impossible to track the impact of PR in strict accounting terms they consider it difficult to quantify PR expenditures. To the numbers guys, if something fails to leave a footprint on the spreadsheet, it is expendable.

However, the usual result of a cut in PR is an “inexplicable” drop in sales and sales leads which can make a company practically invisible to consumers and business-to-business customers alike. Add to that the fact that the print and broadcast coverage almost always comes with an online media counterpart repurposing their stories, PR delivers the double-whammy of free press AND search engine fodder.  So, when you cut the PR budget along with the advertising budget, it’s like tossing the baby, the bathwater and the bathtub.   

Even in lean times, public relations still provides the highest value and greater return on investment than any other marketing tactic, including promotions and advertising. To increase that value, there are a number of “performance-based” PR agencies that mitigate the risk of their clients and only get paid when they deliver solid placements. Retainer-based firms operate on the principle of making their “best efforts” to get your company press. With these firms, you’re paying more for their time than for press. With performance-based agencies, you actually pay only for press, not for intangibles like time and effort. They deliver for you, or they don’t get paid.

Part of the issue facing corporations is the lack of understanding of the difference between PR and advertising. If the soul of advertising is repetition – which generally cost into the tens of thousands to run an effective campaign – the heart of PR is that clients will likely pay one-tenth or less of the cost of an advertising campaign.

Further, the PR delivers a larger punch because it focuses on the placement of articles and broadcast spots in free media. Moreover, these placements carry the third-party verification factor of being in the news sections (not advertising) of the outlets in which they appear. This means that readers and viewers respect the placements more than advertising because they carry the tacit credibility of the outlets that carry them. In other words, if the editors of these outlets deem the company or client worthy of news coverage, then there must be something special about them.

Gates was one of the few software geniuses of his era who also understood the differences between advertising and public relations, and was able to maximize both to his company’s favor. But with performance-based PR agencies, companies don’t need a Gates-sized bankroll to capitalize on the power of PR. In fact, they can start with about $3,500 for a standard national radio campaign.

At the end of the day, companies can’t survive the lean times without a steady stream of customers coming to their doorsteps, and PR can deliver them without busting the bank.

Companies wanting to make the most of their PR budgets these days are discovering one of the industry’s best kept secrets that is effective, mitigates risk and beats the traditional retainer-based agency in every way.

It’s called Pay-For-Performance PR.  There are only a handful of agencies that operate on this fee basis amongst the tens of thousands of PR firms throughout the entire U.S.  Most of them offer the same service, if not better, than the big retainer-based agencies, but at a fraction of the cost.  They’re driven to perform because they only get paid for what they deliver while retainer-based agencies charge for their time and their overhead, but are not accountable for results. If they get media placements, that’s great, but if they don’t, you’re still left holding the tab.

Here’s how it works.  When a company engages a retainer-based agency, they are charged a flat monthly fee based on the number of hours they estimate they need to work in order to get the job done. $10,000 a month is an average fee, but it can go as high as $20,000 or even $30,000 a month. 

Once the retainer is established, the money is divvied up amongst the team in billable hours, much the same way a law firm or accounting firm handles its business. The executive who brought in the business bills for “managing” the account, which is usually about 10 hours per month, costing the client as much as $350 per hour, or $3,500 of a $10,000 retainer. The executive sets assignments, approves press releases and written materials as well as handles communication with the client but never pitches the press.  In these large retainer based agencies, the executives are used as sales people and compensated for the amount of business they generate for the company.  But, unbeknownst to the client, that executive who closed the deal is the person with the most PR experience, yet does the least amount of work on their campaign.

The rest of the retainer is split up among a few junior associates who do the writing, the pitching, the calling and the tracking. The staff assistants get into the action by billing $75 per hour for activities such as phoning, faxing and organizing documents. They may even charge to create the client’s bill at the end of the month, compiling out of pocket expenses like shipping together with the hourly billing as tracked by the team members. The top executive massages the numbers so they fit the retainer, and it then takes the assistant as long as two hours to compile the bill.  A retainer-based agency may charge clients as much as $125 per month just to assemble their bill.

This is a huge difference with how Pay-for-performance PR works.  Most firms that operate in this manner set a simple fee for each media placement the firm obtains and the client signs up for a campaign with a specific budget in place.  Then, one by one, the placements are made, confirmed and executed and the client is billed weekly or monthly against their agreed-upon budget. The campaign never goes over budget, and every client dollar is counted against a real media placement rather than for “best efforts.”

As marketing budgets are shrinking, companies are pinching pennies and seeking a more quantifiable return on their PR investment.  Pay-for-Performance PR not only reduces risk and costs the client less, but more importantly, these firms bring home the PR bacon for clients, or they don’t get paid.

When pitching your story to the press, there is something important to keep in mind:  if you want to get the attention of the press, you have to think like the press.

In the 20+ years I’ve been in public relations, one of the most difficult elements of the game to teach clients is that the press is not a service organization whose sole purpose is to cover what PR people pitch them. Their business model is simple; they exist to inform and entertain their readers, so they can grow their subscriber base and sell advertising against those numbers.

So, if you want to participate in the “press game” it is vital to recognize what wins the press loyal readers and increases their circulation…and then help them to do it!  Step one is to get together a power-packed pitch.  According to the Associated Press Stylebook the preferred term for a press release is not press release; it’s NEWS release.  After all, it’s not called a press-paper – it’s called a NEWSpaper.  Like it or not, public relations people don’t get to determine what the news is. Only news professionals get to do that when they choose what to write, print or air.

So, just because your company opened a new store in Cincinnati, doesn’t make it NEWS. However, there may very well be a nugget of newsworthiness that you can offer up to the press in order to get them interested in the opening of your store.

Where do you find those nuggets? Here are a few suggestions to help you mine the news gold in all your announcements:

Read Your Local Newspapers –You can’t find a news hook until you know what the news of the day actually is.  And, because it changes every day, you need to stay on top of the news (or hire an agency to perform that function for you, and trust their judgment when they advise you of potential news hooks).

Determine How Your Story is Relevant – This is the lowest hanging fruit in the news hook orchard. Look for anything in your business that is relevant to news taking place in your community or nationally. If you’re opening a new bicycle shop in Los Angeles, then do some news searches to see what reporters have been writing about the area.

Say you discover that the area is economically depressed, in which case you can pitch to the press the idea that a new retailer opening there is a boost to the local economy, and that you’re willing to take a chance on success in that community. Or you may discover that bicycle ridership has increased nationally by 10 percent over the previous year, with new riders indicating they have started because they are trying to get fit. Now you can pitch the local press on the angle that your new shop is aimed at capitalizing on this national trend.

This strategy is known as “localizing” a national story, which every newspaper and TV producer loves. Because it’s a national story, they are going to report it anyway, but they’d prefer to have a local hook so they can be more relevant to the local audience.

Develop Stories That Have a Beginning, Middle and End – Make sure you tell reporters a full story. Let’s use the bicycle shop as an example. Opening a bicycle shop may not be much of a story on its own, but what’s the story behind the story? Did the owners overcome any unusual obstacles in fulfilling the dream of opening their store? Was the owner ever a competitive bicyclist? Have the owners used their knowledge of the sport or inventory to help any children’s charities or causes? Are they active in their community? Identify the story behind the story, and you’ll have plenty of opportunities to find a news hook that’s relevant.

Take Action – There is a reason why so many commercial enterprises and not-for-profit charities and community organizations partner up for special events – it’s a win-win situation for everyone. It’s important for every commercial enterprise to be a good citizen and use some of their resources to help others, and it also helps to make sometimes un-newsworthy events relevant. Opening a bicycle shop isn’t a big deal, but holding a grand opening event for a local children’s charity makes the opening more relevant. If the owners use the event to help raise money and donate excess inventory to needy children, it is both a worthy venture and a genuinely heartwarming feel-good story worthy of news coverage.

Helping people should be its own reward, of course, but that’s also why newspapers and charities love these events. It not only gives editors and TV crews something joyful and happy to report, but it also enables the charities to get their messages out to the community at large. Your business improves its public image, and deservedly so, as long as the help is genuine and comes not from the pocketbook, but from the heart.

At the end of the day, most of the time you can find news hooks in even the most mundane of news releases.  The key thing to remember is that the focus of the release isn’t to sell, sell, sell – it’s to convince a reporter that you have news to report and that their readers would be informed or entertained by what you have to tell them.

Think like the journalist, help them do their job, and you’ll find that your enterprise will generate more press coverage as a result.