The Misconception of PR Effectiveness
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Speaker
For many B2B companies, PR isn't mystery. It's exciting to believe that PR can drive media coverage, brand awareness, new business, and entrepreneurial stardom. But the reality is far different. Like any marketing activity, PR doesn't guarantee success. PR requires strategic plans, smart tactical execution, experience, relationships, and the ability to capitalize on opportunities.
00:00:44
Speaker
And even then, media coverage doesn't happen. Here's what goes down for many entrepreneurs and companies. They invest in PR with high hopes, they hire a PR agency for a healthy retainer, and then wait for the coverage to happen. Then, nothing happens. Their story is ignored. There is disappointment, frustration, and a lot of money down the drain.
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Speaker
One of the problems is many companies and entrepreneurs don't understand PR and how it works. They operate in blissful ignorance void by entrepreneurial enthusiasm. And that's the wrong approach and a recipe for failure.
Insights from Perry Hedrick on PR Evolution
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Speaker
On today's episode, you'll get great PR insight from Perry Hedrick, the founder of Crackle PR, which delivers PR fuel for good companies. Crackle has worked with companies like Spotify, Google, Akamai, Sylvania, SoftBank, and Oracle.
00:01:44
Speaker
and Perry is one of the leading PR voices on LinkedIn. His posts are pragmatic, honest, opinionated, prescriptive, and grounded in years of been there, done that. Welcome to Marketing Spark, Perry. Hey, it's a pleasure to join you today, Mark. Thanks for having me.
00:02:01
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Why don't we start with a bit of a softball question? I'd like to get your take on the PR landscape and how it's changed over the past two or three
Shift in PR Strategies: Niche Over Mainstream
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years. We've been in this boom for B2B companies, although last year has been more challenging.
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What are some of the biggest lessons that you've learned along the way as we've seen the B2B landscape surge and digital transformation become a really huge factor? What are some of the lessons you've learned and some of the things that you've tried to impart on your clients and prospects?
00:02:34
Speaker
Yeah, it's a good question, and it's a big question. So I think especially in the last five years, what it means to do PR and especially tech PR has just fundamentally changed. So the playbook when I first started in 2000-ish was the same playbook that a lot of agencies are playing today, which is, hey, client, do you have any news? Terrific. Punch up a press release. I will spray and pray that press release to 150 reporters, knowing that some percentage of those reporters are likely to
00:03:04
Speaker
write it, repurpose it, whatever, and then you count up all the impressions, report back to the client and say, hey, cool. Any more news? Let's do this again. That's kind of the playbook for a long, long while. And I think especially in the last five years or so with the advent, a bunch of really strong communities.
00:03:21
Speaker
and podcasts like this, I think that what's happened is that the mainstream approach to PR has become more atomized. And so, yes, I think the traditional outlets still matter a heck of a lot, and we try to pitch those and get that earned media goodness. But really, it's changed from that PR 101 stuff I just mentioned to more of a PR 121.
00:03:42
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And what I mean by that is you and I are having a conversation right here. And I think five years ago, this wouldn't classically be called PR, but this is, make no mistake, part of the PR mix where you and I are having a conversation that has cascading effects once we share this with our networks. There are communities like Discord and Slack groups and Reddit
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Speaker
and sub stack and all these disparate ways of connecting with your audience in a much more sort of intimate one to one level. And I think that's the biggest change is that if you're only doing the PR 101 press release spray and pray thing, you're only playing half the modern game.
Understanding PR Success in Various Contexts
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You really need to incorporate all the elements we talked about and foster real, meaningful, engaging relationships with all those disparate audiences that I just described.
00:04:31
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Going back to my days as a journalist is when a company looks at PR coverage, they're looking for home runs. LA Times, New York Times, Washington Post, TechCrunch, CNET, The Verge, that is PR for them. That is what they're looking for from a PR investment. But when you talk about atomized and the fact that PR happens in different ways in different places, there's a lot of really influential places where you could
00:04:58
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leverage PR to be on that small but really powerful blog or that really great podcast that attracts influencers and the people that matter to your brand and is it a matter of helping companies understand that there's different lenses they should look through when they're trying to quantify PR success.
00:05:17
Speaker
Yeah, I think that's right. And you're keying into something, which I think is another kind of seismic shift in the way PR is done and should be done today, which is, you know, even 10 years ago, Wall Street Journal, that was the holy grail. If you get your client in the Wall Street Journal, man, is that a home run.
00:05:34
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The problem is that a lot of buyers, like even B2B SaaS buyers, are combing through the Wall Street Journal today. They're just not getting the paper delivered. And if anything, they're quickly scanning online for articles that are relevant to them. Where are they actually hanging out? Where do they actually consume their information? And where do they get the trust to reach out to somebody to actually get in that consideration process? And I'll tell you, it's not Wall Street Journal. It might be a TechCrunch type thing, but more importantly, it's
00:06:02
Speaker
the group of peers they trust the most. It's very much, if I have a purchase I'm looking to make, I'm tapping into all the groups that I'm a part of and asking questions there. Like what do you guys think? What have you seen with this particular company? Do they live up to their promise? How's the customer service? Do they leave you hanging? Like all of these sort of touch points with real people who have real sort of skin in the game is where these decisions are made, which goes back to again, what I was saying is that
00:06:27
Speaker
All these disparate spots like these Slack channels and Discord and all these places are where people are making their buying decisions now. So yes, TechCrunch is hugely important, helps with SEO. It's one of those things that also, once you get one TechCrunch hit, a bunch of other people start writing it. And so in that sense, it is influential for sure.
00:06:46
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But I think the way people make their buying decisions today is just radically different than it was even five years ago. And so that's why I say I keep coming back to this idea of the mainstream media still important for sure. But if you're only doing that, literally you're playing half the game. And where the people really get their confidence to buy is in these smaller niche communities where they've established relationships and trust.
00:07:10
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Couple questions. One is the idea of taking a bottom-up approach to PR. So you start with the niche publications, those influential podcasts and blogs, those industry magazines or websites that people will read. Like if you're in the SEO game, you read Search Engine Journal, you build momentum and relationships and coverage there, and then you can start to work your way up the food chain.
00:07:36
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People will notice that your company has attracted some pretty good coverage So there must be a good story there or there there must be something there that they they want to cover as well So then you can gradually go from baseball analogy playing a ball have some success there Go to double-a and eventually get the triple-a in the major leagues. Does that approach? Resonate with you or does it make sense in terms of approaching PR?
00:08:00
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I think it does make sense and one of the reasons why some folks like tech companies would contact us and work with us is because we've had pretty good success helping people grease the skids for funding rounds as an example. And so when you're looking for a round of funding, what you want to do is have the perception that you're out there moving and shaking and people are talking about you and are excited about what you're
00:08:21
Speaker
So 100%, I think it's really important to have realistic expectations about what's possible early, get those small wins to your point, and then in aggregate, they begin to build a halo effect over your brand. Now, against that backdrop, I always say, yes, do the small ball stuff we're talking about here to kind of establish yourself. But at the same time, you can also take those, you know, swinging for the fences. Let's say you have a dollar, you spend 80,
00:08:47
Speaker
cents of that dollar on the things we just talked about, and then 20 cents swinging high. So that means things like tapping into the cultural zeitgeist, like what's happening at a high level that potentially you could find a way to insert your story into a broader trend or something that's just fundamentally shifting in the marketplace. Those things are so much harder to get, but if you're adept at storytelling and understanding how to connect the dots,
00:09:14
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then sometimes you can really strike gold and you can do it early sometimes and sometimes it's frustrating as hell because you never do but I always recommend taking those moonshots as well as that small ball stuff because what we're really talking about then is bottom up top down and sometimes one lever gets pressed before the other and makes the other thing work better so
00:09:33
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That's kind of the way we like to approach it. And I'll tell you, when you get some big hits and some of those big publications, boy, is it engender some trust from the C-suite who isn't maybe as familiar with the day to day in the trenches PR stuff. But that earns you more goodwill and more trust. So there's a lot of nuance and a lot of ways to skin the cat. But that's
Crafting Compelling Stories and Strategic Narratives
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that's my approach. 80 cents on that small ball, 20 percent of moon shots. And you never know how it's going to mix.
00:09:58
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I love the idea of the moonshot and you're doing a little bit of experiment and a little bit of laboratory testing when you attempt to do that kind of activity. The one thing that I tell many of my clients when they look at PR coverage is for the most part, no one's going to write a story about you, especially if you're an early stage company and you don't have a compelling story because there are so many other companies
00:10:21
Speaker
asking the media blogs podcasts to focus on them what's a bigger opportunity is as you say is making yourself part of a bigger story so that you become a voice of reason you offer perspective and opinion about a bigger trend or bigger bigger news event and that way you can become a bigger story small part of a big story as trying to become the story yourself
00:10:43
Speaker
Well, that's exactly right. And I think one of what was a couple of really good ways to do that. One is to use the power of data and your storytelling because that it's not just clearly about, hey, look at how great my company is and my executive team is. It's really more like, wow, look at these actual trends we're seeing. And here's how our customers.
00:11:01
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actually using these products and services to fundamentally change the game for how they're doing work. So it really comes back almost to the strategic narrative of the company. I'm a big fan of Andy Raskin, and if you don't know who he is, you guys should all check him out. He's a master crafter of strategic narrative and works with a lot of really high-powered tech companies. But what he talks about and what I've come to embrace over the years is that
00:11:25
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What we're really trying to do with PR, with marketing, with all of that is to come up with a strategic narrative that sort of frames the existential battle between the way it was always done and the new world that you represent. And if you can create that tension by showing the stark difference and be defensible by showing with data how what you're saying is true, then really what you've done is you've made it hard for people to ignore what you're saying.
00:11:51
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because you've got the data, you've got the receipts to back it up, and you've got customers who are on record happy to talk about this new direction.
00:11:59
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That's where the real magic happens. And I think with most companies, they want to sort of hire PR for two weeks in, get these amazing hits and go off to the races.
Patience and Iteration in PR Campaigns
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But really what it is is more of an iterative process, trial and error, finding what works, what resonates, what doesn't. And the same way that marketers need to talk to their customers to find out what's working, what isn't. That same thing applies to PR.
00:12:21
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I always say, we should expect at least three months of sweat and blood equity into this process before you're really feeling like a PR program has hit its stride, that we have the right message at the right time to the right people. So that's a long-winded answer, and I hope I didn't drift too far into the field, but it's a fun topic that I can expound upon.
00:12:43
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I would agree that impatience is probably the biggest obstacle for many companies when it comes to PR. We live in an instant gratification world. People expect that if I do this, then this will happen almost right away. As you know, you're well aware of the fact that that's not the way and that it often takes time for a PR campaign to resonate. It's often a slow burn before something really big happens.
00:13:07
Speaker
I wanted to circle back on something you said earlier about operating in communities.
Building Relationships in Digital Communities
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There's tons of Slack communities, and there's Discord, and people are still sometimes operating on Twitter these days, and there's LinkedIn, where you and I spend a lot of time. On one of your take on the role that a PR agency will play to support a client in those communities, is it a matter of
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a person like yourself establishing relationships in a channel that you can leverage on behalf of clients? Or can a PR agency actually act on behalf of clients within those communities to build relationships? What's the role that PR agencies can play in those communities?
00:13:50
Speaker
Sure. That's a, that's a good question. And the answer is all of the above. And it really just depends. Every client is a little bit of a snowflake. So for example, clients that work with us, I tend to do because I just like doing it. I'm a connector. I tend to introduce my clients to folks in my LinkedIn ecosystem, who I think makes sense to know each other and this kind of thing. So in that sense, I'm doing a little spade work just because I think these relationship connections are always really good and really helpful.
00:14:16
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There are plenty of other clients we've had where they are relying on us to do the research to find out sort of who is talking about the things they care about most, who would be influential to have in their sphere. So we do a lot of that background research to kind of deliver to them like, okay, these are the people that you really ought to know and should be interacting with to kind of insert yourself into the conversation. And then in some cases, we will come up with the pillars that they should be talking about on their platforms.
00:14:42
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hey, based on your business and what your goals are, we think these three pillars are really what you should focus on to try to add value to your community. If you just ungate your brain and talk about these things and connect with the people that we're setting you up with over time, you'll end up sort of embracing and extending your circle. So we've done that. We've also done as much as writing for the C-suite. If they don't have the time, they're just like flat out, but they know they have to be on LinkedIn.
00:15:09
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We've done writing and ghostwriting for them. Now, my preference isn't to do a lot of that. My preference is to teach them how to fish and then let them fish and guide them to where the fish are. But in some cases, they just don't have the time because you know the deal, wearing multiple hats just don't have the time. So we can learn the voice of the C-suite and sort of
00:15:30
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over time and gender their trust and then post for them. But I think that's more of the exception these days. And again, I'd much rather teach these folks how to be self-sufficient on these platforms so that in the event we part ways, they still know how to do it versus having to pay somebody all over again to learn their voice and just kind of repeat.
00:15:48
Speaker
There's a lot of different ways that we can help. I think for us, it's really about trying to grab our clients on the shoulder and bring them into where the conversations are, teach them how to have those conversations in authentic ways if they don't know how to. And then over time, let them stand on their own two feet and really sort of own that relationship.
00:16:08
Speaker
Off the top, I talk about the fact that many companies operate in blissful ignorance when it comes to PR. Having spent 15 plus years as a journalist and seen from the outside looking in how PR operates, it's always interesting that people have unrealistic expectations about the PR-media relationship.
00:16:28
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And there's an expectation that peer agencies are miracle workers who can get media coverage right away. Why do many companies and entrepreneurs not understand how PR works? Like fundamentally, these are smart people who know their businesses inside out and know how to operate. But when it comes to PR, they just are puzzled or they just have some misconceptions about what the reality is. Why is that?
00:16:53
Speaker
I know there are a couple of big, big reasons. One, everybody wants to believe there's a panacea, like there's a magic bullet, right? So if I hire this PR guy, boom, I'm the Wall Street Journal, tech crunch all these places. You want to just believe that that's the case. Look, I'm spending 12,000 a month or 15,000 a month, I should be in the Wall Street Journal, like make it happen. So there's that, that unrealistic expectation. And then unfortunately, and I think a lot of my peers would agree to this,
00:17:16
Speaker
The PR industry hasn't done itself any favors because what they tend to do is brag about their strong relationships with the media over and over and over again to compel these people to write these big checks. So if you're looking for me to sugarcoat this, I'm not sugarcoating it. PR people are shooting themselves in the foot over and over again. I did a LinkedIn post recently where I said something like, happy Friday to everybody except PR people who boast about their terrific relationships with the media.
00:17:42
Speaker
because you're hurting all of us and making us all dance around like monkeys because this is not how it is done, right? We're not the mafia. I don't say, hey, Donnie, call your friend at the Times and get us in the... That's not how it works. What does work is earned media, meaning you present to these reporters at these top tier publications a strong, defensible story with data to back it up.
00:18:05
Speaker
tap into the zeitgeist of what's happening in the day, and provide something their readers would genuinely care about. So that's really it. Full stop. Now, will a relationship with somebody at the New York Times have them pick the phone up or answer your email? Yes. But if the story is that they're, I don't care if it's my mother or my brother, they are not writing the story without a good, strong hook. So at the end of the day, what I always try to disabuse prospects and clients of is this notion that we know
00:18:34
Speaker
matters. And sometimes that makes me lose the business. And sometimes we never win the business because they just want to believe that there's a magic wand you can wave and you can call it a favor. But that's not reality. And what I'm here to do is tell the truth about the industry. And it's a hard truth sometimes. I make a great point. When I was a journalist, I knew lots of PR people. I had good relations with them. Many of them became my friends. And even the ones that
00:18:56
Speaker
truly had a friendship with me when they would pitch a story, I would say to them, it's not newsworthy. It's not something I can write about. It's simply not interesting. If you have a relationship and it's good enough where a reporter will actually open your email, which is a big win these days, and maybe even read it, that's the value of your relationship. At least you get your foot in the door. At least you get into the consideration set so that a reporter can look at it and go, possible?
00:19:22
Speaker
or not really, but otherwise you may not have a shot even to get their attention and that's the big thing these days. Well, you just quickly one more point on that. So like, all right, I have a bunch of friends who are reporters. Guess what I don't do to my friends? I don't pitch a bunch of bullshit to them and hope that they throw me like a bone and write about some stuff. Like that's abuse of a friendship. That's how you lose friendships. That's how you lose trust.
00:19:48
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So like, friends don't pitch friends garbage is really what it boils down to. If I'm a friend with somebody, I'm going to make sure I go out of my way to provide them with what they need to easily be successful in writing that story. Not the other way around. So I'm not sure what friendship means to a lot of people, but to me, that's what it means.
00:20:07
Speaker
Here's another loaded question, another PR 101 question.
When to Consider PR and How to Partner Effectively
00:20:12
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How should companies approach PR? How do they know when it's the right time to do PR and as importantly, why? Because a lot of companies look at competitors, for example, that are getting amazing media coverage appearing on podcasts.
00:20:28
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and they look at that and say, I want that. How do I get that? The default is often, well, just hire a PR agency. Strategically, what's your advice to companies that think they have a good story to tell, really believe that they could benefit from PR help, but don't know where to start? And they don't even know if it's the right time and how much they should invest to make PR happen.
00:20:54
Speaker
Yeah. I think the easy answer for that is if you've got paying customers and some that are happy with your products and services, you might want to consider doing something. Now, what that something is really greatly varies. Did you just get $100 million in funding because you're hitting on your marks? Well, then you probably want to invest in PR because you have the capital to do it.
00:21:17
Speaker
You have a little bit of time to do it and you have the resources to make sure that you're successful. So that's kind of like one way of looking at it. And there's a lot of bootstrap companies that, you know, they feel like they have product market fit. They have some customers that are kind of happy and they're just trying to figure it out right now, but they know the people should be hearing more about what they're doing. In that case, I would say, you know, the best place to start isn't necessarily with a full blown PR program.
00:21:41
Speaker
but rather working these channels that I was talking a little bit earlier about, like LinkedIn, and trying to get on some podcasts and just piecing together a few of these examples, getting better at telling their own story, and taking control of their own destiny a little bit, and then seeing what works just the way you see what works with your customers, with your products and services. Seeing what works in the marketplace of ideas,
00:22:03
Speaker
what's resonating and refining that message a little bit by yourselves. And then once you've kind of got those baby steps under you where, okay, I feel like I'm telling a pretty good story here. I'm seeing kind of what's getting a little bit of traction, what's working. I'm building my audience up a little bit. Then maybe it's time to think about bringing on a PR firm, even at a smaller level, just to get some trade media coverage maybe and just kind of start small.
00:22:28
Speaker
But the last thing any PR firm should encourage a young company that isn't very well funded to do is spend, is empty their ammo out on PR early because it is a big spend and it requires a shitload of effort. And what you could do is find yourself coming up empty after one month and thinking.
00:22:43
Speaker
Damn it, it didn't work. And I just spent all this money. So it's different for every company. I would say, you know, Crackle, we tend to work with companies that are VC back. So it's A round, B round, C round, sometimes D round. And we've had publicly traded companies. And if you're funded like that, you're generally going to be in the market for PR because you have those resources and you have already the market validation from these VCs that, okay, we've got something here. But if you're bootstrapped, I would argue that you probably want to do a little more of the sweat equity yourself first.
00:23:13
Speaker
and get a good taste of what that's like before you bring in professional help because it can be an expensive mistake. On a B2B SaaS company, I've decided that I'm going to take the plunge into PR. I do a lot of research. I hired a PR agency that I believe is going to perform for me. How should a company and a PR agency start their relationship? What are the keys to success to make sure that
00:23:39
Speaker
Expectations are aligned that you have a vision of what you're hoping to achieve and that you get the engagement off on the right foot because a lot of companies come into PR with unrealistic expectations and that they're immediately and quickly disappointed.
00:23:59
Speaker
I think part of it is looking at a potential PR relationship, not as a client-vendor relationship, but as a partnership. And back to that I mean, you can't just hope to hire a vendor and hope things work out. You need to prioritize PR and communications as a key business driver and treat it with the same import that you would any other function, whether it's marketing or sales or customer service. So that's kind of point one.
00:24:23
Speaker
You're either all in or you're not. The second thing is you need to be able to provide your PR firm access and action. So access to the executives that they need to be successful, that's your sales team to interview them, your CEO, your CMO, like access to these folks that are going to be pivotal in telling your story and then action from them when there are asks that start coming in from the media and other entities like speaking opportunities and awards. So it's got to be,
00:24:49
Speaker
commitment to act quickly from the right people at the right time. What I've seen so often is this sort of atrophy that occurs when the client side isn't taking the PR effort as seriously as they need to, dragging their heels, taking three days to comment instead of two hours, not providing you the data that you need in order to complete this pitch, not
00:25:12
Speaker
giving the data that we need to do this survey, whatever it may be. It's the dragging of the heels on the client side that tends to be a real killer. And we always say at Crackle in particular is, if we don't have you on your heels in the first month or two, then we're not doing our job. The client needs to be scrambling to try to keep up with what we're doing here, and you need to be all in to do it.
00:25:33
Speaker
So that's kind of what I would say is for me the recipe for success is. And then the second thing I would say is we have a blood on the walls meeting very early on. I call it blood on the walls because we want to know the good, the bad, the ugly. So like, don't surprise us, you know, like let's sit down and talk about who you really are. Who has you shaking in your boots at night? Like who are you thinking about as a competitive threat? Like what should we know that potentially could blow up in our face? What crisis communications
00:25:59
Speaker
plans should we have in place in the event things go crazy. So there's a lot of really early honesty and planning that has to happen. And that's what partners do versus client vendor where we say, Hey vendor, go put this press release out. Hey vendor, go pitch this story. It's got to be a collaboration. And it's got to be almost like a marriage where, you know, if you don't, you don't marry somebody that you don't know a hell of a lot about and trust implicitly before you do. And that's kind of how we view it.
00:26:25
Speaker
When I talk to people who are consultants or want to be consultants, one of the things I tell them is that as much as companies hire you, you're hiring them. The idea that, going back to your point about having a relationship and a partnership,
00:26:45
Speaker
What do you look for in a good client that will create a women proposition? You'll be successful, they'll be successful. What are the telltale signs that a client, I'm sure you get a lot of people in your pipeline who want to work with Grackle, that you know this is a good fit, that we can actually be successful and help them do well in the process?
00:27:05
Speaker
Yep. It's a really good question and it strikes right to the ethos of how we kind of started. So just to back up a little bit. So I spent 20 years growing a couple of the largest privately held technology, PRA agencies in the country. And in that capacity, we would chase pretty much any client that moved because we wanted the revenue. And once you start getting to a certain size, it's all about that revenue. And so when the pandemic struck,
00:27:32
Speaker
a lot of us were doing some self-reflection as we were staring at the walls because we couldn't leave our houses. And I thought, well, I've grown some of these large agencies, maybe the time to do something for myself is now. And if I were to do that, what's something I would do that my kids who at the time were 11 and 12 could be proud of their dad for doing? Instead of just chasing every dollar, win at all costs, what would make them
00:27:59
Speaker
proud of what I was doing. And so for me, that meant working with companies that were doing something demonstrably good in the world. As there were race riots in the street, COVID rampant, I just wanted to figure out a way to do something that was positive and good that still allowed me to use the skills that I had grown over these 20 years.
00:28:19
Speaker
So we arrived on this idea of working with companies that are good, good companies only. And how do you know they're good? I don't know, but you know it when you see it. You know that they're not polluting the environment. You know that they're not giving kids cancer. You know, they're not doing any of those things. And then the other thing was the client contacts themselves have to be fundamentally good people that we could work with day in, day out.
00:28:42
Speaker
So the real idea was good companies, good clients, good employees, no exceptions. So that's it. That's the true north, all those things. Against that backdrop, if we have a client or prospect, I should say, that has strong technology that we believe in, is doing something positive for the world, is not doing anything negative for the world, the client contact is a good, solid human being that understands the mission and is trying to do good too.
00:29:10
Speaker
That's how we know that we've got something good there. And I have to tell you, for the first time in my entire career, we've walked away from more business than we've taken on. Not because these people were jerks necessarily, or not because they were killing kids, but because the mix just wasn't right. And you can feel it when it's right. And I've done this so long now that I know what's right and I know it's not.
00:29:30
Speaker
And so we'll politely refer people to other firms that may be a little hungrier for that business. And I have to tell you, because of that approach, Mark, in the almost three years now that we've been doing this, we've lost exactly one employee, one.
00:29:44
Speaker
that person is actively trying to come back today. And the turnover rate for PR employees is one in four every year. We're doing something right here, I think, by setting the parameters early, sticking to that mission. And I'll tell you what, there's not a client that we've had that doesn't like being associated with a PR agency that only works with the monsterably good companies.
00:30:05
Speaker
It's a true north for us. It's been really successful for us. And I think if you ask me what's the right mix and what's the right approach, that's it. I love that in a data-dominated world, that gut, feel, and intuition often play a big part in making business decisions. Sometimes it's just the way you feel about something, that spider sense that you get that tells you whether it's the right way to go or not.
Economic Challenges and PR Budget Cuts
00:30:32
Speaker
Switching gears a little bit, in a recent LinkedIn post, you mentioned how a few clients walked away in late 2022. And I think this is something that a lot of marketers can relate to because it was just tough times from... Savage. Savage. Yeah. And I think up for a lot of us, it caught us by surprise because if you look at the latter half of 2020,
00:30:55
Speaker
2021, early 2022, boom times for BDB, BDB SaaS landscape. Everybody was doing well. The rising tide list with all ships, including people like marketing consultants and PR agencies, and suddenly the landscape changed and companies walked back on marketing. A few questions to ask you about that scenario. Number one is why do you think these companies decided to back off on PR? Why don't we start with that and then I'll ask you some supplementary questions.
00:31:24
Speaker
Yep, of course. So most of them happen to be coincidentally SaaS companies. And SaaS in particular, there seemed to be this edict at the highest levels that every C-suite deemed to be gospel that they needed to slash marketing spend. So within two months, we lost literally five clients, four of the five of which were in SaaS.
00:31:45
Speaker
And in many cases, it was because they not only cut the PR firm, but also half the marketing team. And in some cases, the entire marketing team. So one of our biggest customers, our clients said, I have some bad news. We've all been laid off and that impacts you as well. You've been laid off too. So not only were they wiped out, but we were wiped out. And I got to tell you, it was just one hit after another five clients in two months that almost, it was just shy of a hundred thousand dollars in revenue monthly.
00:32:14
Speaker
out the damn window through no fault of our own because people were reflexively thinking they had to slash and burn. So that's the answer to your first question. Yeah. It's painful when you get that phone call or that email suggesting that you got to get on this call and talk because you know, it's not good news. You know, they're not. It's not your fault. We love you guys. If everybody loves you, but they're, they're making us do X, Y, and Z. It's just like, Oh, I'm getting fired and you love me. That seems cruel.
00:32:43
Speaker
It is really the downside of having really tight relationships and then no longer having them. You lick your wounds, you sort of recalibrate, maybe you spend the holidays trying to sort of figure out what to do next. What lessons did you learn from abruptly losing business? Because Crackle had this great run. You decided to start the company for all the right reasons. I suspect that you started to attract business pretty quickly after you launched.
00:33:05
Speaker
an amazing role, but suddenly things change in a very dramatic way. Looking back a few months later, what are the big lessons? Boy, I'll tell you, I worked with a number of our clients who didn't let us go, but also did cuts. We helped message a lot of that for a lot of clients who were going through similar things. I don't know many tech companies that didn't do some kind of layout against that backdrop. We're helping some of our clients message for cuts.
00:33:34
Speaker
We're also getting caught by some of our clients. And one of the things that I learned through that whole process, Mark, and I don't want this to be self-congratulatory or patting myself on the back, but especially in a services business, a client service business, I know that our people are the most important thing that we have got. And I also know they're incredibly hard to find and attract and retain.
00:33:58
Speaker
So what I learned is that I was smart to cut my own salary. I was smart to offload expenses like my personal office space and other things that were creature comforts that I was really, really enjoying since the boom times of 2021. And instead made sure that I kept my close group of employees safe and active and under my wing.
00:34:22
Speaker
I'll tell you, they worked their butts off to get us through that time. They were overwhelmingly competent with the clients that we had. Since then, in the intervening two months, we've since added a bunch of really great clients back on again. I guess the learning that I have is that
00:34:40
Speaker
It's the first time in my life that I was put in that position where I had to choose between my employees and my own comfort. I threw down with the employees and it's the best decision that I've ever made. I'm ready to start paying myself again in March. And you know what I think has happened is that it's engendered goodwill and more trust with the people that I've brought into my fold. And now they feel some psychological safety that when the first
00:35:03
Speaker
problem arises that they're not going to be thrown to the wind and that they're part of something that's a little bit bigger maybe than just themselves. Maybe this whole good company's thing comes with it a set of responsibilities that means you need to behave like a good company and a empathetic leader.
00:35:20
Speaker
So that that's my learning is that leading with empathy and toughness is for me so far. And I know I'm, you know, I'm not speaking for everybody, but for me, that's that's been one of the biggest sort of blessings, I suppose, if you can find one in the really tumultuous end of the year.
00:35:37
Speaker
You know, the classic short-term pain, long-term gain management philosophy is that if you think big or if you look beyond what's directly in front of you, then you can see a brighter future. One other question related to what you've been through is your take on why companies
00:35:54
Speaker
see marketing as low-hanging fruit when it comes to slashing budgets. The first, the gut reaction for many of these companies, and we saw it in early 2020, and we saw it in early 2022, is that, oh my God, leads are drying up, sales are slowing. What are we going to cut? How are we going to get ourselves in better shape? We'll just cut marketing. What inevitably happens is that
00:36:17
Speaker
they discover that that is like cutting off your nose to spite your face. And then they turn to people like me and you to fill gaps because they've got rid of their marketing departments. Why do companies behave this way? Why don't they see the long-term picture as opposed to reacting in a very rash way? Yeah, I think there's a few things that go into it. And first, I'll say that all of the data suggests that that behavior is kind of misguided and
00:36:45
Speaker
ham-fisted, Harvard Business Review, Sequoia, all these folks say the same thing, which is that in a down economy, if the companies that maintain their spend in marketing and PR or even increase it are the ones that come out the other side much more strongly positioned than those who sort of recoiled in fear. So that's just like factually true. But I think the other part of it is that marketing and PR sometimes reviewed as overhead by people who don't understand what marketing and PR are, which is the bigger problem is that
00:37:13
Speaker
a lot of people just don't know what the hell PR marketing do and how to quantify that in a way that makes sense to the CFO. So when you're looking at the cold, hard light of day at the balance sheet and marketing has a bunch of campaigns that haven't yet bore fruit, PR has got campaigns that they're cooking and maybe there's a launch coming up that hasn't yet bore fruit, the one thing they think they can rely on is the fact that they have salespeople and leads and that those two things are going to solve everything magically if they just double down on that.
00:37:43
Speaker
And it really, unfortunately, is an unsophisticated view of the way a company is run. And the more sophisticated the companies and the more sort of battle scars they have, the more they tend to understand that cutting marketing and PR during a recession is like going on a hunger strike during a famine. I mean, it's self-flagellation. And it makes bouncing back from the difficulties
00:38:10
Speaker
10x harder because now you've gone silent and all of your key audiences are thinking, ooh, those guys must have gone broke or what happened to them? They disappeared, they must not be viable, which is exactly the perception that PR and marketing do not want your key audiences to have.
Remote Work and Company Culture at Crackle PR
00:38:28
Speaker
Final question, and somewhat related to the PR business, as someone who has worked from home since 2008, I love how you embraced the idea of working from home.
00:38:39
Speaker
How do employers and employees successfully leverage work from home? And what do you think about companies that are making their employees return to the office? And what's your own approach to running your own business when it comes to working from home?
00:38:55
Speaker
Boy, another big question, Mark. I've worked in the office my whole career until I started Crackle, and I'm not here today to tell you that working in the office is evil or bad or any of those things. I think that there are a variety of professions that require you to be present. There's the doctors and construction workers and line workers and a million different things where you have to physically be there, so I get that.
00:39:17
Speaker
In corporate America, however, I think that COVID really pulled back the curtain on the absurdity of needing to be 40 hours in a cubicle in the office that you commute an hour to because it's always been done that way. We've just always done it that way, so we'll always continue to do it that way.
00:39:34
Speaker
And I think where we're at now, Mark, is that there are a whole hell of a lot of companies that are just waiting until their leases finally expire on this expensive ass real estate. And then they're going to start incorporating policies like hybrid or remote or some combination thereof. But the hardliners who are locked into these releases, and they tend to be older folks who have been around a long time and are reluctant to change, they're forcing their people to come in.
00:39:59
Speaker
I think those people are quickly going to become dinosaurs. I think flexibility is the way forward. And whether it's hybrid or remote, it's up to the company to the side. But that's kind of the direction all this is heading. And if there's a silver lining of COVID, it's that. Now, for us, we were born
00:40:14
Speaker
virtual or remote or distributed or whatever you want to call it. And we have people all over the country. I have people in the Bay Area and Denver and Idaho and Pennsylvania and Hampshire and Boston. And we're able to be in every time zone, which is fantastic. In some cases, I haven't met in person some of my employees yet, even though they've worked for me for a year.
00:40:31
Speaker
But I talk to them all the time on a platform just like this and you're able to establish relationships, believe it or not, just like we're doing right now, Mark. And we have team meetings and weekly meetings and we have all kinds of cultural events that we do online. And then occasionally I'll fly everybody in and we'll get together face to face, which I think is important occasionally to kind of just do a little in-person brainstorming and bonding and just connect, you know, skin to skin, shake hands and fist bumps and some of that.
00:40:58
Speaker
But for us, it's been really phenomenal. And I think part of it is having people self-identify what they want to do professionally. Do they want to be people that go to the office? Because then they're not going to come work for me. And that's fine.
00:41:11
Speaker
But everybody that has worked for me and joined up with me knew what we are and what we do. And so therefore they've all opted in to this. And surprise, surprise, one person has left in three years. I think this whole notion that you can have a distributed remote team be successful or have a cultural fit is ridiculous. Because to me, culture means how you feel on Sunday night about going to work on Monday.
00:41:35
Speaker
And I'll say it again, one person has left in three years, which is ridiculous in terms of the attrition rates in a typical PR agency environment. So you can cite all kinds of the reasons why people need to be in the office, why they need to commute an hour to and from work, why they need to miss their kids' games to come to the office. And I'm going to say that's a bunch of bullshit. That's a decision that you're imposing on your people because of one reason or another, whether it's we've always done it this way, it's your real estate costs.
00:42:04
Speaker
Whatever, but I say it's poppycock. Love that answer. Love the insight that you delivered about PR. I hope that we've provided entrepreneurs and marketers with a guide on how PR works, how to embrace PR, how to make it work for you, and how to make the right decisions at the right time. One final question is, where do people learn more about you and Crackle?
00:42:28
Speaker
Sure. Well, they can go to cracklepr.com. They can follow me on LinkedIn, which is Perry P-A-R-R-Y, Hendrik H-E-A-D-R-I-C-K. If you're on LinkedIn, you'll see me around. Well, thanks, period. Thanks for everyone for listening to another episode of Marketing Spark. If you enjoyed the conversation, leave a review, subscribe by Apple Podcasts, Spotify, or your favorite podcast app, and share via social media.
00:42:51
Speaker
To learn more about how I work with B2B SaaS companies as a fractional CMO, Strategic Advisor and Physicianing and Messaging Consultant, email mark at markevans.ca or connect with me on LinkedIn. I'll talk to you soon.