| Operating under a retainer agreement, clients | | | | There is a direct correlation between the billable hourly |
| essentially agree in advance to buy/pay for a specific | | | | rate and amount of time a PR firm will invest in your |
| amount of time in professional PR services over the | | | | project. Let's examine two 12-month retainer proposals |
| life of a project. Just as importantly, your PR firm | | | | based on dollar value only. |
| reserves-and protects-that time for you and your | | | | - Firm #1: $5,000/month |
| work. | | | | - Firm #2: $4,000/month |
| RETAINER STRUCTURES OFFER A NUMBER OF | | | | Assuming that the two PR firms and their proposals |
| BENEFITS, INCLUDING: | | | | are equal in strategies, tactics and expertise it appears |
| - Flexibility in the resources invested on your behalf. | | | | that the proposal from Firm #2 is a better value. |
| For example, at the onset of your PR campaign, your | | | | However, if we consider the average hourly rate as |
| PR team will likely invest extra time in getting to know | | | | part of the evaluation, we can see a significant |
| you, your product, your industry landscape, your | | | | difference: |
| competition, etc. At other times, the team will invest | | | | - Firm #1: $5,000/ month ÷ $75/hour = 67 hours |
| less time-ultimately achieving a balance at the end of | | | | invested on your behalf each month (on average) |
| the project. | | | | - Firm #2: $4,000/month ÷ $165/hour = 25 hours |
| - Budget control. In other words, clients know exactly | | | | invested on your behalf each month (on average) |
| how much they will invest each month in public | | | | Over the life of a 12-month retainer, the difference |
| relations; there are no variables as there are with an | | | | looks like this: |
| hourly agreement. | | | | - Firm #1: The client will invest a total of $60,000 for |
| - Sometimes, a reduced hourly "rate"-Retainer | | | | 800 hours of PR work |
| agreements allow adequate long-term and short-term | | | | - Firm #2: The client will invest a total of $48,000 for |
| planning to accomplish specific goals. Your work can | | | | 290 hours of PR work |
| be more easily balanced with resources allocated to | | | | Additionally smaller accounts are (as a general rule) |
| other clients. | | | | managed to be profitable by assigning work to team |
| HOW PR FIRMS MANAGE, MEASURE AND | | | | members who are billed at a lower rate (generally less |
| CALCULATE RETAINER ACCOUNTS | | | | experienced). Larger accounts garner the attention of |
| PR companies large and small have finite resources | | | | senior-level practitioners who bill at a higher rate. |
| (time and man hours) that can be invested into any | | | | While one should never select a PR firm based on |
| client account. This is measured in billable hours. Some | | | | cost alone, the ACTUAL cost should be part of the |
| PR firms don't like to disclose this and won't proactively | | | | larger evaluation. How do you do this? Ask questions, |
| offer hourly equivalents in the retainer proposal. | | | | like: |
| However, even if it's not stated, all retainer projects | | | | 1. What is your average hourly rate? |
| are measured and/or managed by tracking billable | | | | 2. How do you calculate how much time and effort will |
| hours. | | | | be allocated to my account? |
| In estimating time and calculating retainer value, PR | | | | 3. Who will be serving on my account and what are |
| firms use an average billable rate. This is different for | | | | their billable rates |
| every firm, but it include the varying billable rate of | | | | 4. If I'm unhappy with the work, can I cancel our |
| each member of the PR team-senior leaders billed at | | | | retainer agreement? |
| $300/hr to interns billed at $45/hr. | | | | |