The Business of Public Relations and the Rule of 78s

By: Stephen Andrews, SVP, Fusion NY (@stevebandrews)

Our business is much like any other, at the business level.  People need the same things, customers ask similar questions, it’s all somehow connected. And like many, dare I assume, most, business today we are continually being asked to support direct business objectives that contribute to our clients’ bottom line.

So far so good, all is as it should be.  The breakdown seems to happen over just how long this whole “PR Thing” should take.  Okay, we’re still on relatively common ground here.  Folks want to know how long something will take.  From medical treatment through drive-through fast-food, we must know how long. Fair enough.  I suppose it happens in other businesses, clients read the plan, take everything in, nod as though everyone has reached a mutual understanding and promptly ask, ”Why can’t we do this in a few weeks?”  By we they mean us and by a few weeks they mean later this week.  Sound familiar?

I came across an article written by Derek Pilling, a portfolio company manager at Meritage Funds, a Denver-based VC firm and board member of Crisp Wireless. He talks about RR or recurring revenue businesses and how long it can take an increase in marketing resource spending to impact the bottom line.  He uses a SaaS business for his illustration but the theory works in our business and in many of our clients’ businesses.

So the next time you’re sitting in that meeting wondering if it might be easier to fold quantum space than explain why sometimes things just take time, think about Derek’s article and the rule of 78s. We often feel pressure to impact our clients’ bottom line – which is a good thing and something we should all be aiming for, however it is helpful to understand how the investment / return feedback loop operates within a business environment.

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