When considering retaining the services of a public relations consultant, a major issue is always how much will their services cost? Good question. As someone who has spent a few decades as a PR consultant, allow me to offer some clarity.
The first question to ask yourself is whether retaining a PR will be cost effective for your particular need. A consultant is someone who can offer very specific expertise in a business endeavor when needed and put on hiatus when not needed. So right off the bat, the costs for managing a consultant are much more cost-effective than in-house staff as you are able to utilize their services only when needed.
In the PR business, there are typically three billing protocols: monthly retainer, hourly rate and project basis. Here is an explanation of each:
Monthly retainer: The PR consultancy will charge a fee for a certain number of hours worked during a specific month. Some PR firms will have a stipulation in their contract that if they work more hours than agreed, they will charge an hourly rate for the additional hours worked. Some won't within reason. While it is possible, I have never heard of a situation where if a PR firm works fewer hours, they credit the client those hours for the next month. PR firms always seem to find a way to use all the hours they are being paid for.
As stated above, the monthly retainer is based on projected number of hours to be worked during the month. If a number of people in a PR firm are involved, they usually have different hourly rates so the formula is number of hours X billing rates of each consultant all added up. For a small project, a monthly retainer could be $1,500 a month. For a large, national PR campaign, the monthly retainer could be $50,000. Again it is all based on time.
Hourly Rate: More and more PR firms are working on hourly rates, much like attorneys. This is easy to understand. The person doing the work has an hourly billing rate and at the end of the month all the hours are added up and multiplied together. Usually a cap can be put on the number of hours worked so it doesn't get out of hand. But if a client is not on top of hours worked, they could be in for billing shock. What are hourly rates for PR consultants? They can range from $75 an hour for a junior-level account rep to $800 or more per hour for a senior PR executive.
Project Basis: A project basis is when the client has a finite activity that they need promoted. A special event is the best example. There is a start date and an ending date. The PR firm will look at the work involved in promoting the event and come up with a price, again, dependent on the number of collective hours worked. What can promoting a special event cost? I've seen PR services for special events range from a $2,000 fee for a small, community-based event to $100,000 for a major, media intensive event.
In my experience, clients get the most bang for their buck with a monthly retainer. First, they know pretty much how much they will be spending each month so they can best budget their PR services. Second, PR firms usually don't charge for extra hours worked so a client typically gets more hours than they are paying for. Also, part of the PR business is exploring opportunities and possibilities that sometimes don't pan out. PR firms are often reluctant to bill for this type of exploratory work, but if working hourly, they have to.
Every PR firm will offer their perspectives on which method will work best for your specific needs. But the decision always lies with the client, so knowing your options is a good place to start.
