Fees for pubic relations services just might be the most examined – and complained about – part of a PR professional services agreement, especially when considering retainer hours. This reality is more prevalent in AOR, or Agency of Record, agreements. While we PR practitioners always expect to be paid, we must not forget our clients expect to know what they’re paying for. And if your agency is anything like mine, you’re answering this question with more routine.
The bottom line is simple: If a potential client requires you or your agency to represent its interests at all hours, such as website management or crisis communications capability, you’ll need a retainer to bill against. And you’ll need to explain it in terms the client can understand and accept. The client’s own budgeting requirements top my list of three reasons PR firms build-in a retainer.
1. Retainers Answer Corporate Budgets.
Essentially, after a careful look at the work before us, we determine the number of hours required to manage the work, in part (various programs/segments) and in total. There are highs and lows over the months in terms of projected hours worked and agencies use a retainer as a way to account for these variations while providing a simpler way for everyone to budget.
2. The Retainer Acts to Reserve.
Some hours in the retainer are used to manage the overall PR program (all the moving parts) and others are used to manage segments of a PR program. Where additional hours above the retainer are required for any segment, those hours are identified and added to the project segment. This is meant to illustrate that hours tied to the segment are not the only hours used to implement that program. The retainer is key, as I’ll explain next.
3. Buys are Scalable. Retainers Likely Are Not.
Retainer hours are used to execute scalable segments, but the hours are not scalable proportionally. Consider, for example, a digital media buy (Pandora, Google, etc.). The cost, in terms of hours, to manage the ongoing ad flight remains the same regardless of the actual hard media cost. A Pandora campaign could involve a buy of $3,000 or $300,000, but the hours required to build and manage the ongoing program remain the same.
There are many conversations occurring around this issue, with opinions for and against retainers. My aim isn’t to convince anyone that retained hours are more inviting or more favorable than billing for precise services. But, if your agency is built on retained hours and the expert projections those hours involve – and your agency has many, many clients – my hope is that this might help to explain your business model. It’s the same model used by other professional services, including attorneys.
Still this model, as it relates to PR, relates to a profession most every outsider believes would yield better results were they to do it themselves. Yet they call. And we answer and perform. And proudly, we must explain.