In Competitive Advantage, Michael Porter wrote that there are only three competitive strategies: price leadership, focus and differentiation. If you've ever worked in a low-margin commodity business (I have) you'll know that there are only two that sane business execs would contemplate: focus and differentiation. Price leadership not only makes your life hard, but it relies on taking value off everyone in your supply chain. Ultimately, someone, somewhere will be living in borderline poverty to make your products or services cheap enough. Just say no.
I'm banging on about this because Steve Strickland from the wonderfully named Talker Tailor Trouble Maker published a plea in PR Week that caught my eye. He quite rightly says: "We have a responsibility to each other". He's right.
Creative agencies that focus are a core part of our DNA. We love specialists. We also appreciate unique value propositions so a clearly differentiated service provider always catches our eye. Low value, commodity businesses have no place in our market.
There is no long-term value in chasing price leadership. It's a brutal, exploitative strategy and the race to the bottom of the barrel breaks businesses. Discounting is pernicious. Don't do it. It devalues your work, your people, your reputation and your future. It's better to say no than drop your pants to pick up a PR brief for pennies.
The UK creative sector has much to be proud about and edgy PR companies that push boundaries and challenge norms should be essential partners in times like these, not something you barter over. So I say, great shout Steve... I hope your plea is listened to.
We have a responsibility to each other to not bring about our own industry recession or collectively see off some of our most exciting small businesses because we have the savings to do all the work, for half as much. Don’t capitulate, innovate. Our mission should be to collectively elevate our PR craft, not to suddenly start a price war to the bottom. Remember the supermarket price wars? Sure, there were great deals – unless you were a farmer or producer being asked to supply them. I didn’t – potentially – lose half a lung to spray mount in the 2000s to suddenly start selling award-winning work for less than a shady pair of Gucci sliders.