Budgets, budgets, budgets - you set them to spend them. Or at least many organisations did. Many still do.
But come on - setting a budget doesn't mean you have to spend it. In fact good budget management and business sense means setting a budget of what you can spend, but ideally limiting your spending to what you need to spend within that budget whilst still getting the value you require. The cash savings you make by not spending your entire budget go to profit, or are allocated to something else to achieve profit.
It’s a simple comparison, but many parents are opting for the flexible, capped and pay-as-you-go mobile phone contracts for their children precisely to manage their household budgets. A few mobile network operators are offering such tariffs. So as not to teach you to suck eggs, but to help make my point, have a look at this article about T-Mobile or the video below from Tesco Mobile.
It's very simple, responsible budget management.
That's how it should be, shouldn't it? And if you can apply the concept to your business's service suppliers, that probably makes good business sense too. Get the results you need but only for the money you need to spend.
Before the recession prospective clients often said, "I want to be able to manage my budgets, so I just want to define an amount of money I'll be committing to you each month for public relations, and you do a good job." We said, "No problem. But we'll still time every minute of work we do for transparent time sheets and show you what we're doing so you know you're getting value for money."
However, these leaner times are showing us that businesses want help to manage their budgets differently using innovative billing options. Their imperative demands are flexibility, control and value. We're finding businesses want a billing system like the pay-as-you-go mobile phone services, where they don't have to commit to spending the budget they set, have greater control on what they spend, and only get surprise bills of the good kind at the end of the month - where the figure in red at the bottom of the invoice might even say, "£0.00".
That's why Parker, Wayne & Kent is launching this new flexible, capped, pay-as-you-go public relations service. We agree monthly public relations priorities and an associated capped budget for activities with the client. We don't bill over the monthly budget without client approval. If they don't want any activity in any given month, they don't get billed. We use technology to time every minute of our work so we can bill clients by the minute and deliver totally transparent time sheets. (Some of us here have worked at PR agencies where time sheets were filled in at the end of the month, relying on PR execs' memory or a 'finger in the air' estimate of hours worked for clients - neither accurate nor ethical in our opinion.)
Unlike the mobile network examples above, we don't tie clients into fixed term contracts, there's no minimum spend, and there's no minimum cap / budget limit. We're even working with one client on a cap of just 450 minutes per month. To reiterate: that's not a minimum spend, that's the monthly capped budget. If we don't work for them, they don't pay anything at all. If they task us with some activity, and it's approaching their 450 minutes cap, we merely alert the client and they decide whether they'd like to approve more budget in that month to get maximum value out of the project, take time from the following month's capped budget, or halt the activity.
However, it's important to be upfront about the drawbacks of this system. Just as with mobile phone tariffs, the price per minute is higher than if we were working on our monthly fee or project-by-project contract basis. Also this method of working is largely client led, so any activity is responsive to client requests. This means we don't get to be as proactive as we'd like to be in generating news for clients to seize the media agenda or to creatively take advantage of the editorial opportunities we may become aware of within our network of journalists.
Both established companies and start-ups are taking advantage of this new form of relationship with us. They want to get their companies into media articles - thus avoiding the high prices of advertising - and manage their PR budgets as effectively as possible, rather than just committing to spending them.
It can work for your company. You just need to find out more by emailing us.
