Why are projects seldom successful? Projects fail for six simple reasons:

1) Objectives are not clear
2) No measurement in place
3) Plans are too big/optimistic, scope creep
4) No accountability
5) Execution stinks
6) Static plan, dynamic world

To define value, we look at each tactic individually. For example, a monthly email newsletter. We then have a conversation with the client each month about what they value. In this case it might be 5% new subscriber acquisition each month, readership/open rates greater than 10%, etc.

In the case of PR, value is created by a combination of # of placements, referring links, traffic and other factors. Every client will value these things differently.

We ask the client to force rank/weight all their tactics each month. The sum of the force ranked tactics creates a percentile performance grade for the month.

This methodology is by no means perfect – in some cases it can be very subjective. The tracking spreadsheet is always undergoing revisions and updates – many driven by our clients. However, the biggest value for us is the “discussion” and shared accountability.

Ben Bradley
MaconRaine

I have experienced this issue from both sides. First as being the PR practitioner providing the service to a client and more recently as being the client and employing a PR firm. When I was delivering the service at the set amount and my client would question my bill, I had to question the client and their integrity. Were they really dissatisfied with the service or where they just trying to pay a lesser amount? I believe it was the latter and I would generally walk away from those clients. Now as the client employing a PR firm at a set amount, I make sure to provide a clear definition of the goals and expectations of the services to be performed…as long as they are living up to their end of the bargain I will live up to my end and pay the bill. I will only complain if they stepped outside of their authority and performed services that I did not authorize which increased the amount we previously agreed upon.

Another way of looking at this is, if I don’t think they got the results, I should probably examine my management of the agency, rather then quickly blaming them and ask for a fee reduction.

I agree with Gini’s assessment…you wouldn’t tell the waiter in a restaurant “let’s see if I get heartburn from the meal and I’ll decide what I owe you.” Come on get real here and don’t make this complicated. Current fee structure works just fine for me.

1. Value chain analysis – where are you really providing the most value in the eyes of your clients? From concept to execution to the bottom-line, where can you help and where are you expected to help? Map it out, grab a whiteboard and throw it all up there. Are you really adding value or simply augmenting the client’s either under-manned or over-bloated staff? Are you really responsible for a bottom-line result or is it a key performance indicator (KPI)?

2. Match risk to reward – look at your where your work exists in the value chain (see #1 above) and charge appropriately. Maybe your chain looks like this: discovery -> concept -> solution/consult -> implementation -> measure -> result -> follow-up action. What is worth value-pricing and what could your client really do on their own but they’re paying you to do better, faster and cheaper than using an internal resource?

3. Narrowly define what success looks like – as I’ve said before (to you Twitterati), most agencies skip the “why” and launch right into the “how”; this is a crucial mistake and often leads to spinning wheels. It leads to your work being about the effort and not about value because you never properly set the work scope, and consequently the client’s expectations to achieve results – just like Juli pointed out. Get behavioral with your clients. Ask them questions. Never stop asking questions – ever. Ask them things you’d ask interviewee. I think you’ll find your clients are dying to tell you this information. It’s cathartic. Failure is a lot easier to define than success too.

4. Map your ideal client experience – this is something we’ve found extremely useful at Vox. What are the crucial bookends to your client engagement? What are the moments of truth where you need to check-in with your client and take their temperature on the engagement? 9 times out of 10 this step alone will stop those rate reduction talks dead in their tracks – your clients need, want and deserve that attention.

To sum it up, perhaps the best model is a mix (isn’t that always the answer?). Looking at your client value chain (again, through their eyes NOT yours), certain parts might only be worth an hourly rate – or better yet, a fixed rate or even a package like Shannon says – I really like that idea. Enhance the usability of your pricing – how’s that. Luis? Charge conventionally for low-value work like discovery and implementation. At first Juli’s idea of charging 80% of your established rates sounded good, but then it lead me to believe it may diminish the perceived value of work almost before it began. Your rates, hourly or fixed, are what they are for a reason. Hopefully that’s because you have an indispensable skill, you’re an astute business owner who knows what your market can absorb and what you’re worth. Be fair and realistic, or reap the whirlwind. Then explore value pricing for your high-impact activities like consulting, problem-solving and producing results. I’d love to hear thoughts on this.

My opinion comes from the corporate client side so this type of discussion is music to my ears. Why? Because as corporate marketers in lean profit times we need to justify spending more than ever. If we don’t – it’s gone!

Ad budgets are being slashed and scrutinized more than ever. Marketers are being forced to migrate toward media that can be tracked and measured all the way down to the cash register and show a short-term ROI. The same type of thinking is going to be applied to branding and PR. That’s not to say this is the right thing to do but it’s the short-term profitable thing to do. If we can’t truly measure it – cut it!

This type of thinking is a reaction to the current economic environment but it’s also a byproduct of the online/data revolution. In some weird way it’s like the perfect storm for CFOs.

To have a truly successful relationship between client and agency you must have upfront and defined success metrics with the key budget decision makers. The best way to keep on solid ground with brand advertising and PR is to force the CEO/CFO/CMO to agree upfront to a defined success metric. If you don’t involve each of these key players in the conversation you’re bound to have issues come budget review time.

Other major issues are minimizing client interference with the creative approach and letting your resource do what you hired them to do. Another challenge in the relationship is operational and quality issues that can interfere with the success of any campaign. Advertising and PR can influence the consumer to act but the in-store experience or product experience trumps any type story you’re trying to tell.

I’m taking everyone’s feedback, as well as that I received via email, and composing a pros and cons list, with potential solutions.

Stay tuned…and THANK YOU!