Does the procurement process result in poor quality PR?
15th May 2013
The problem with a typical procurement process is that is focused on cost. Companies and public organisations that appoint PR agencies through a procurement process may end up with the cheapest, but not the best, agency.
Stuart Disbrey, an energy sector in-house communications manager, says: "It's obvious, but worth reiterating, that when it comes to procuring public relations services 'least-cost' does not always equate to 'best-value'.” Disbrey also points out that on the other hand, “expensive” does not necessarily mean “good“.
Disbrey believes that the public sector is most likely to go for the cheapest option: "In economically challenging times, a tender with the lowest cost is often going to be the most appealing. This is perhaps more so in the public, rather than the private, sector where budgets across the board are under the cosh. The private sector can afford to be more flexible both in its requirements and in the procurement process itself.”
It isn’t always the procurement procedure that demands low prices, agencies can be so desperate for business, they sell themselves cheap. Disbrey gives an example: “In a recent procurement of communications services which I was involved in, one agency's response consisted largely of saying – 'We're definitely the best; just tell us what the lowest bid is and we'll undercut it.' We didn't find this a very thorough or reassuring approach to doing business – that agency didn't get the work. You'd also be amazed how many agencies are happy to pitch having never actually asked what the budget is.”
Any decent and rigorous procurement process will have a system for evaluating quality as well as cost, the difficulty is getting the balance right. Nick Leonard, managing director at PR agency Ruder Finn, says the problem lies when procurement teams are instructed (or take it upon themselves) to reduce cost as much as possible rather than ensure good value: “In my experience, which side they fall on depends on the culture of the company. The smart ones – and there are some – value what we do and seek to engage us at rates that are competitive, rather than trying to get as much as possible for as little as possible.
“We work in a service industry where quality and skills vary from company to company – we’re not manufacturing generic parts from moulds. We attach a fair price to what we do and expect clients to respect this and not try to commoditise our services. In return they get the activities and results they want. Simple.”
Lack of respect
Insisting on driving down costs not only compromises quality, it damages the client/agency relationship from the start. As Leonard says, “The worst part of any pitch (and it’s very common) is being told that the client loves your ideas, approach and team but it wants them 20 to 25 per cent cheaper. If your value is not respected at the outset then it won’t be during the course of the relationship, so that’s the point at which agencies need to be strong and walk away. Agencies are businesses, they need to make profit, and they shouldn’t be ashamed of that.”
As procurement departments are here to stay, it is important to appreciate their good points and learn how to work with them. For help dealing with the procurement process, the PRCA offers a Procurement Toolkit. PRCA director general Francis Ingham concludes: “While we have all heard horror stories about cost-cutting procedures such as reversion auctions, if handled in the right way procurement can be mutually beneficial for both parties. Procurement can help to create a framework by which all parties know exactly where they stand when entering into their contract.”
Written by Daney Parker