Talent, client attrition biggest growth challenge for midsize, small PR firms in India

Emerging mid-size and boutique firms are helping to fuel the growth of Indian PR but what are their main challenges and how are they targeting growth? PRmoment India finds out.

Fighting client attrition 

According to Vineet Handa, founder, Kaizzen, "Retaining clients and employees for a longer period is the only and best strategy to grow your top line and bottom line. In the last ten years of Kaizzen’s journey, the average relationship duration has been a little over 4 years.  Mostly, we have noticed that a client who stays for longer durations their relationship with servicing team is seamless which enables that the team’s “Productivity Over Time Spent” is much higher."

Anand Mahesh Talari, managing director, Mavcomm Consulting Pvt. Ltd agrees wholeheartedly with this approach. Says Talari, " Keep the clients intact and let their PR speak for you. Our average client relationship periods have been 7+ years. Our work for our clients and strong relationships are automatically noticed by industry and we typically get new business references without ever going out and pitching."

Kunal Kishore Sinha, founder & director, Value 360 Communications, has gone through the growth phase as a mid-size firm. As Value 360 now targets growth moving out from the mid-size to a large size firm, it is not only expanding the bouquet of services to include digital marketing but is also automating tasks that needed large-scale human intervention.

Sinha is also organising client teams across function to enable better-integrated communications, " At Value 360, we also have a unique organizational structure which helps us to maintain a healthy margin on our client retainer. We have functionally-zoned specialised teams which are a massive departure from the conventional PR firm structure where you have one team managing the entire mandate of the business. This allows us to enhance not only the quality of output for our clients but also enables us to manage better volumes and thereby higher margins."

This is an approach that even Kaizzen is experimenting with, bringing, digital to every client. Says Handa, "We are trying to experiment in this area by training minimum 2 team members of each team to become experts in online and social PR outreach."

Sonali Sokhal, director, Intelliquo concurs that "Thinking digital is critical always as it is the most critical and comprehensive medium of our times. Also, it's important to think in terms of brand strategy and campaigns as opposed to being another marketing tool for selling products and services."

The talent challenge 

The moment one mentions talent, groans emerge from all corners of the PR business. It is a core issue that every PR firm talks about, but with few solutions on hand. Sinha agrees that " The biggest challenges that mid-size firms are facing today include employee attrition. Low margins, the inability to diversify their service portfolio or becoming too niche in their services such that they limit their own market potential are other common barriers to growth."

Sinha adds that apart from hiring from a diverse set of professionals, not always from PR, "PR firms must also proactively help their existing employees to up-skill so that they remain motivated and are able to adapt to the fast-evolving PR and communications landscape."

Talari admits that "I think the barrier to growth is the quality of professionals. It is always a struggle to find resources who can get aligned with our vision. We had to literally go slow for some years in between because we knew that it will be difficult to manage any further clients."

"It is honestly a struggle for boutique agencies to acquire new talent pool that brings in the expertise of creative storytelling - be it video content or ad copies or social media campaign for the simple reason of ROI; especially in smaller cities", admits. Shailesh Goyal, founder of Simulations Public Affairs Management Services Pvt Ltd.

Adds Goyal, "The roles have increased and scope of work has shot up but the budgets haven't."

Udit Pathak, co-founder and director, Media Mantra puts it bluntly saying, "The biggest barriers to growth and innovation for mid-sized and boutique firms is a paucity of quality talent. Put succinctly such firms face a talent crunch. For such firms to grow I believe that it is essential for them to hire talented people at the right time and to assign them to the most suitable accounts. Firms that fail to do so will not succeed as much as firms that do so."

Pathak adds that one way to solve this is, " To hire people who are "all-rounders” because such people can be assigned a variety of different tasks and can do them successfully. I’m not necessarily looking only for great senior campaign managers because I know that even a well-rounded executive can teach me new things and can work to successfully create new campaigns."

Growing pains: cash liquidity and funds availability 

On closed WhatsApp PR groups, one of the biggest complaints, after issues with journalists, is unpaid dues. This reporter regularly receives information and complaints about unpaid dues not only from clients, many from larger PR firms.

Yasin Hamidani, director, Media Care Brand Solutions points out that, "The biggest barrier is non paid dues from the client side for a long time, this causes a major barrier to the growth of a mid-size agency. Another barrier is the trust factor which big clients don’t easily go towards a boutique or mid-size agency. Lastly due to a lot of freelancers jumping into the market and undercutting rates makes clients doubtful about hiring an experienced agency at a mid-size price."

Handa both agrees and disagrees with this statement, "I personally feel the smaller agencies are more flexible and agile and therefore can innovate better with cost-effective delivery methodologies as compared to larger once. The only challenge I see is the cost factor, many a times innovation comes at a cost and that can be a hurdle for innovation in smaller agencies."