"I am on record as saying that the PR agency model needs to be massively rethought. The focus has been on geographic expansion whereas I believe what is needed is deep specialism. The legacy is that agencies have generated large bureaucracies that are in permanent sales mode”
So says George Pitcher, founder of public affairs firm Luther Pendragon, priest, professor and polymath, to accompany the opening of his new ‘legal chambers-style” agency, reported in Gorkana this week.
The general insurance sector wears its tradition hard when it comes to PR and communications. The usual all singing, all dancing suspects still dominate the market, and very well they have done too, but change is needed, for as my old boss used to say: “If you always do what you always did, you’ll always get what you always had.”
There are one or two encouraging signs that more progressive clients are open to a different approach from their advisers. The key – for me – is ‘deep specialism.’ In order to advise, you really need to know what you’re talking about, and the first question any CEO thinking about their external communications support should be: ‘do these people understand my business and my industry?’
Specialist knowledge can often be found at CEO-level within agencies, but because CEOs need to pay for the bureaucracy they are permanently looking for new clients. They don’t tend to steep themselves in the muck and bullets of account management unless it’s a crisis, or they’re in danger of losing a client and need to soothe some feathers! And, if they’re not managing accounts, it’s hard for anyone to stay fully up to speed with what’s happening to their clients specifically, and the market more generally.
Many clients I’ve spoken to are blown away by superb new business pitches from big agencies, but are then disappointed by the execution three months down the track. Just as insurers have invested hundreds of millions over the years in their underwriting and sales, at the expense of their claims divisions, so agencies devote most of their attention to new business. They get new clients through the door, but let the downstream side (execution) slide.
Winning the business is not the same as doing the business. And doing the business requires deep knowledge, hard graft and continuous focus on the needs of the client. CEOs looking for communications support need to ask: ‘Who will actually be working on my business and how do I put in place guarantees that I have access to the best experience and knowledge?’
Competition in the insurance market is as intense as ever and that competition is mirrored in the agency world. For example, most insurance services businesses will focus their attention on their biggest, most lucrative clients. Agencies are the same – it’s no surprise that their efforts are focused on their highest paying clients.
Rightly so perhaps, but where does that leave the smaller, lower value accounts? With so many to juggle in a large agency, a £3K per month client will inevitably lose out to the £10-15K client.
For CEOs looking to maximize the value they receive from their communications advice there are now a number of alternatives to the old stagers.
As Mr Pitcher’s new company illustrates, the way is open for agile, specialist smaller agencies. They carry low overheads, they are not so obsessed with new business and often hold a much deeper knowledge of the market. What’s not to like?