PALM SPRINGS, CALIF. - Firing clients has become more common as PR executives try to reengineer firms, increase profit margins through employee retention and restructure work environments. So, gone are the days when clients call the shots, executives learned at PRSA's Counselors Academy held here last week.
"Most agencies sell implementation and creation. We sell research and results.And we select our clients," says Ira Yellen, president of First Experience Communications, a conference presenter.
Execs at Yellen's 17-year-old firm pared down the company's client list from 25 to 10 in the past two years so they could focus more strategically on clients that contribute the most to the firm's fees. Its net annual fees are $650,000 and its clients include heavyweight Cigna and Sun Microsystems [SUNW], the company that gave the world Java.
Generally, attendees agreed they want to keep clients that bring in 15-20 percent profit margins.
Lisa Bell, a partner at The Fresh Ideas Group, in Boulder, Colo., says pro bono work helps the firm grow with the right clients. It discounts by about 50 percent work for The Organic Trade Association. Indeed, it behooves Fresh Ideas to have a stake in the association because the majority of its 14 clients are in the natural foods business. And Yellen's Glastonbury, Conn.-based, six-person firm follows these guidelines to remain successful:
- Bills weekly or biweekly and does not use retainers so bookkeeping is more fluid;
- Charges between $90 and $250 an hour and uses freelancers at $75 an hour to cut overhead expenses;
- Yellen allocates three hours every day to marketing and selling his company in meetings and calls;
- Drops clients who do not allow access to key decision makers; and
- Requires that potential clients pay $4,000 for secondary research and focus-group sessions so a plan can be implemented that matches research with goals.