Developing Strategy for PRW Communications - Case Study Example

 Public relations Technology and the emergence of the Internet have revolutionized the way most companies do business. The use of the world wide web as a promotional tool has become increasingly widespread and Public relations consultants invariably use web marketing as an integral part of their advertising campaigns, to reach the widest possible customer base in a cost effective manner. The recent recession has however affected many of these consultancies adversely, since most businesses are now averse to non-essential expenditures and advertising has been one of the major casualties. But this does not necessarily indicate that public relations consultancies cannot thrive during recessionary times as well, rather it may be necessary to adopt a different strategy to appeal to potential customers during lean times. PRW Communications is a small public relations firm that is based in Basingstoke in the United Kingdom. The Company consists of a group of freelance experts in web marketing, digital photography and PR work, therefore while it is based out of Basingstoke and caters primarily to companies in this region, it also has clients from all parts of the UK because it includes in its roster, freelance professionals working from all over the country. The Company has clear objectives – it works with small and medium sized companies in helping them to find cost effective solutions to their promotional needs. It promotes itself as one that is able to understand the challenges that are faced by small companies and the problems that they have to cope with, because PRW is itself a small organization comprised primarily of professionals who work freelance from their own homes and thereby save on overhead costs. (www.prw.biz). One of the tools the Company is already using to gather in more customers is its free web marketing health check (www.prw.biz). This is an online form that requests customers to provide details about their existing web marketing, so that the Company can provide an unbiased report about the relative efficacy of the techniques that are being used, including a Google report. It appears very likely that this is an excellent source for gathering in new customers for the Company. On the one hand, it provides the organization with the opportunity to gain access to a vast potential customer base in a cost effective manner and on the other hand, it provides the organization with the opportunity to offer its services in improving the public relations and web marketing efforts of these customers. Moreover, since the Company is comprised of freelance professionals using computers to communicate with each other while being based out of their own homes, the reduction in overhead costs offers a significant cost advantage to the firm which is beneficial during the current recessionary period. The strengths of the Company may therefore be listed as follows: Clearly defined target customer base A clear understanding of difficulties faced by its customers Low overhead costs A team of professional experts employed by the Company Efficient networking among the associates The weaknesses of PRW are as follows: Lack of a strong institutional base and clearly defined leadership hierarchy Lack of a proper, centralized office facility, which impairs its reputation as a quality establishment The Company does have some strengths it can put to use, especially during these difficult times: Access to professional talent Pay per lead website optimization service at no extra charge Customer focused approach The most significant threats the Company faces are: The recession and tightening budgets of customers Increased competition from other public relations agencies for existing business available from existing businesses During recessionary times, a larger number of public relations consultancies are fighting for fewer customers, as more businesses either become bankrupt or choose to cut down their spending on advertising. As a result of the increasing levels of competition, customer expectations about levels of service from public relations consultancies have also changed and become more demanding. More and more customers are becoming increasingly critical about the services that they receive (Albrecht and Zemke, 1985), therefore PRW Communications may need to develop a strategy to convince customers about high levels of returns that may be expected from improvements in the kinds of promotional campaigns that are used by these businesses. In working with this Company, my primary objective would be to develop a fresh strategy to sustain and improve business during the current recession, by trying to avoid losing existing customers, especially because my speciality is in the area of Human resource management. Retaining existing customers is likely to be much easier than trying to attract new customers during this lean period, since most businesses are not likely to make fresh investments, especially in advertising. In order to retain existing customers therefore, it is necessary to convert them into loyal customers. Loyal customers would be an asset to PRW because they would provide higher profitability in the long term and help PRW to sustain itself through the recession, while also reducing operational and advertising costs, which would provide the Company with a competitive advantage. (Frank, 1992; Carmen, 1970). Such customers are also likely to transmit positive word of mouth messages to other potential customers, who are more likely to trust such accounts rather than open advertising by PRW. In targeting existing customers, a new business strategy must be developed to maintain a constant communication with customers and keep in touch with their changing needs, so that their campaigns can be changed or modified accordingly to be effective in recessionary times. This can be achieved through regular mailings that offer creative suggestions on marketing strategies during a recession. For instance, since PRW deals primarily with small and medium sized firms in the Basingstoke area, it can suggest promotional collaborations between different clients. The promotional campaign of a firm of solicitors could for example, be integrated with the promotional campaign of a psychiatric clinic. An integrated marketing approach would allow advertisement of the solicitors’ services at the clinic and advertisement of the clinic at the solicitors’ offices and websites. PRW would gain additional business from both clients, but the advantage offered to both clients would be the facility of reduced advertising costs because they would be able to access and tap into a potentially wider market than a solo campaign could have achieved, but at half the price because the other business is paying the other half of the investment. By offering its clients this facility of continual promotion but at reduced prices, PRW conveys an impression to existing clients that it cares about them and is sensitive to the need to tighten advertising budgets during a recession. Research carried out on customer satisfaction has revealed that consumers evaluate the quality of service they receive at an organization by comparing it to their expectations of what such a service should be (Gronroos, 1984). When the performance of a service at an organization matches the expectations that customers have of that service, then the result is a satisfied customer. But this in and of itself may not be adequate to ensure that an organization is able to sustain a competitive edge; rather it becomes necessary for consistently superior levels of quality of service to be maintained if customers are to be kept satisfied enough in a globally competitive economy, so much so that they keep returning to use the service. Thus, apart from offering fresh, innovative approaches to promotion, the Company must also take pains to contact customers on a regular basis on the phone, to discuss their problems, concerns or difficulties and suggesting new ways of increasing business and boosting earnings. Rather than being attentive only at the beginning of a campaign, customers may expect much more from PRW during difficult times and constant contact is likely to provide a great deal of reassurance to customers about PRW’s continual commitment to their interests. There are many small improvements that can be made into web based marketing campaigns without incurring any costs because the electronic medium offers the facility of making changes easily and inexpensively. PRW is already offering free development of highly optimized, customized marketing websites where payment is to be made on a pay per lead basis. The website creation is done at no extra charge and the leads are not shared with competitors of the clients either; as a result it offers an attractive, cost effective solution for customers. If PRW continues to offer such services and improves them by optimizing customer websites in such a way that they crop up most often on as many Google or other searches as possible to generate maximum advertising outreach for customers, but does not charge its customers any extra amount for them, then it is likely to surprise the customers in a very pleasant way. Their expectations about the levels of service being provided by PRW would be exceeded, constituting a level that would delight its customers. (Kundampully, 1997). Other examples of web based changes could include the removal of clutter from client websites, minor reorganization of promotional material, improving clarity of pictures posted on websites, etc. If such minor changes are offered free of charge, customers are likely to be more receptive to suggestions such as search engine optimisation and improvements in graphic design to generate fresh promotional and advertising copy. All of these measures are likely to enhance and retain PRW’s existing customer base. It must also be noted that PRW’s customer centred approach also offers ample opportunity to gain new clients. PRW currently utilizes the formal approach to customer based marketing through the SIVA model –Solution, Information, Value, Access. (www.prw.biz). The customer’s needs, perceptions and satisfaction become the central objective of this approach, which first questions whether the solutions being developed are appropriate for the customers needs? Has the customer been provided with adequate information to make a decision? Is the customer aware of the potential value of the decision, i.e, what it will cost and what its potential rewards are and where can the customer gain access and purchase the solution? This approach is useful for PRW because it enables the Company to be entirely customer focused and develop solutions that are targeted to the customer’s needs and budgets, while also making the customer aware of the ratio of benefits received as compared to the costs of the service. This is an aspect that the Company can develop further as a part of its new business strategy. During a recession, businesses are more conscious than ever of the ratio of costs to benefits gained from promotional campaigns and are more focused upon gaining greater benefits while incurring lower costs. If PRW is able to refine its customer based approach and offer cost effective solutions such as web optimization services and pay per lead services while also retaining customer trust, it is likely to gain significant benefits in terms of customer loyalty. Such a strategy is also likely to gain new customers for PRW, because the ratio of benefits to costs will be higher with PRW than it would with other Public relations consultants. Since PRW also has the facility of access to professionals scattered across the United Kingdom, it can widen its marketing efforts and seek customers from other parts of the Uk outside its localized area of Basingstoke. It is not only important to retain customers, a new business strategy for the company to survive in recessionary times must also include optimization of its employee base. Murphy and Burgio-Murphy (2005) have laid out five important aspects which every firm should know about employee retention. The most valuable suggestion they offer however, is that some employees in the firm are more valuable than others, therefore the greater the degree to which a firm focuses on retaining the high performing employees and eliminating the low performing employees, the higher its level of success. Motivating its best employees during this recession poses a challenge that PRW must meet, if it is to continue to survive. CPA Consultant Steve Erickson recommends ten techniques to aid firms in hiring and retaining employees.(Annonymous, 2007). Some of these techniques that PRW could apply include (a) building an employee referral network (b) differentiating the firm, by building unity within the firm and having a clear focus on internal and external service categories (c) working on the good clients by evaluating them and allowing employees to work with the good ones to motivate them (d) creating a culture of success and helping employees to feel successful due to being associated with such a firm (e) consistent communication which results in benefits for everyone and (f) eliminating all negative talk within the firm and promoting a positive attitude in solving staffing issues. These strategies are likely to be very helpful in ensuring that the best employees stay with the firm and continue to generate positive results for customers, which also helps in retention of those customers with the firm. It is very easy for employees to feel negative during a time of recession as they become the victims of cost cuts by companies, but maintaining a united, positive approach could help counter these negative effects. It may also be necessary to motivate employees more strongly in order to improve morale. In the case of skilled employees, one of the most commonly used methods used by employers to attract the best candidates to their firm is to offer good monetary rewards, such as high salaries, signing bonuses and attractive benefits (Pfeffer, 1998). Since this may not be a viable strategy during a recession, flexible human resource policies and an inclusive culture constitute non monetary rewards that are likely to provide a higher motivation for employees to join an organization and to remain in it. As Herzberg has argued, employees are more likely to be motivated by factors such as achievement and the work itself rather than simply money. (Herzberg 1968) and this may be especially relevant during a recession. Lastly, it is also extremely important for the Company to ensure that it adheres to regulatory policies laid out by the Government if it is to survive in a tough market. The Company strategy must ensure that good policies of corporate governance are in place, taxes are regularly paid and profits/losses accurately reported, so that the Company’s reputation as an ethical organization is preserved. A public relations firm not only prepares promotional campaigns for other companies, its own reputation must be above board if it is to attract more business. In the case of PRW, its primary stakeholders are its wide base of professionals working out of their own homes, so that overheads are reduced and the Company is able to survive more easily. Hence it is vital that the Company preserve the integrity of its stakeholder base and develop human resource policies such as profit sharing, enhanced inclusion in corporate decision making and increased appreciation to satisfy the intrinsic motivation of these employees who are also the primary stakeholders in the firm. All of the measures recommended above are likely to be very helpful to the Company in surviving the recession and emerging as a strongly integrated business entity. The difficult times offer an opportunity for the Company to develop into a lean and efficient organization, where creativity and innovation have to be developed to the fullest in order to cope with the challenges being thrown up by the current financial environment. Bibliography Albrecht, K. and Zemke, R. (1985) Instilling a service mentality: like teaching an elephant to dance”, International Management, 40(1): 61-67 Annonymous, 2007. “Ideas that really work to recruit and retain staff”, Journal of Accountancy, 204(2):19 Carman, J.M, 1970. “Correlates of brand loyalty: Some positive results.” Journal of Marketing Research, 3: 67 Frank, R.E., 1962. “Brand Choice as a Productibility Process.” Journal of Business, (January): 43-44 Gronroos, C., (1984), “A Service Quality Model and its Marketing Implications”, European Journal of Marketing, 18(4): 36-44. Herzberg, F. (1968) One More Time: How Do You Motivate Employees, pp 85-95 in Harvard Business Review: Breakthrough Ideas: 15 Articles That Define Business Practice Today: Harvard Business School Publishing, Boston USA Kandampully, J, 1997. “Firms should give loyalty before they can expect it from customers”, Managing Service Quality, 7(2), pp. 92-94. Murphy, Mark and Burgio-Mark, Andrea, 2005. “The Deadly sins of employee retention”, Leadership IQ Press. Pffeffer, J, 1994. “Competitive Advantage through people.” MA: Harvard Business School Press “Pay per lead in the U.K. – expand your customer base and increase profdits with qualified leads”, http://www.prw.biz/1kit/Default.aspx?alias=www.prw.biz/1kit/prw; Read More