A recession plan for PR agencies

The crash in global markets will soon have agency heads assess its impact on business. The smart ones have already begun taking stock — evaluating projections and charting out game plans to guard against potential dip in revenues. The Monday morning meetings might well include a word of caution from the Branch heads to not only up the ante on client servicing but also be on the lookout for telltale signs from clients that could hint at potential causes for concern. The threat is not just from the outside but also within as undercutting and poaching become commonplace in the industry. Seasoned PR agencies have been through the recession drill several times. The last decade alone has trained agencies to prepare for the worst with the dot-com burst and subprime mortgage crisis. While India weathered these crises relatively well, the situation does not look very promising now. If economists and institutes like the ICRIER are to be believed, India is less resilient now and more vulnerable to a domestic meltdown. Industries like Tourism, IT, Manufacturing and Infrastructure are expected to be the most affected. When companies cut costs during recession, contrary to what one would expect given the high ROI of PR, the first casualty is often the PR agency. Besides ignorance and short-sightedness on the client's end, to a large extent, this could be attributed to the fact the PR budgets come from the advertising agency-controlled marketing kitty. I recently asked some PR professionals on Twitter to share their top tips on coping with recession. Some of their inputs have been incorporated in these 10 tips to help PR agencies build their own recession protection plan: l Client retention is easier than new business acquisition. Focus energies on walking that extra mile to be a valuable partner to clients. Innovate; stretch every rupee for the client. l Renegotiate contracts with a clause to revisit retainer fee after a few months. Depending on the nature of relationship shared, retain or scale down current scope of work. l Leverage research capabilities to provide real-time information and analysis on industry and competition to clients. Market intelligence could not only help in retention, but also revenue creation. l Fix hygiene and employee issues within the agency. Update databases, upgrade resources and train people, all of which would stand the agencies in good stead in the long run. l Consider developing new skill sets like digital media expertise. l Avoid the knee jerk reaction of downsizing as it could adversely impact employee morale. l Hire smart. l Renew focus on business development; incentivise and reward employees who help in revenue generation. Focus on sectors like Healthcare, Utilities, Agriculture and Pharma that are likely to be least impacted. Score quick wins through specialist products, projects and workshops. l Take a hard look at measurement and give clients something to think about by showcasing tangible benefits. Utilise opportunities to talk about relevance and importance of PR during slowdown. l Have the courage to walk away from non-paying clients. l Remember Roman poet Horace's words: Adversity has the effect of eliciting talents, which in prosperous circumstances would have lain dormant.