Social media is changing the art of the PR practitioner, says Iqbal Wahhab. How can SMEs benefit from this change?
In my early twenties I took out private medical insurance. Every year for the next two decades my insurer would call me to see if I would like to renew, and I had the same joke every time – namely that it was the best money I’d ever spend on a service which I didn’t need to use.
Then, in middle age, a series of medical challenges required me to spend a fair amount of time in Harley Street clinics and hospitals. You’ll never hear me moan about queues and care quality in the NHS because I never had to access the service much, and all my considerable costs were covered. Payback time.
Reading a book by Stephen Bayley about public relations makes me wonder if we should view the hiring of PR firms in the same way – is it best to have one on board whether we feel we need it or not?
Generally, the PR sector is bad at doing its own public relations.
In the past, PR firms would write monthly reports for clients outlining where they had placed media coverage for them, how large the articles were and how much that space would have cost in advertising.
So for paying, say, £2,000 a month in fees, they had secured you £50,000 worth of media space. A bargain! Oh, how we laughed at how gullible clients were. The fact is, of course, they wouldn’t have advertised to the tune of £50,000 that month, so they were being told they were making a saving on a purchase they would never have made.
Social media has changed our views on PR – virtually every public-facing business now has people checking what others are saying about them on Twitter and TripAdvisor and recruit specialists to train their teams on how to handle both negative and positive posts.
This must be the next phase for PR – going beyond product launches and press releases and into the field of reputation management. For example, Lenovo, a Chinese computer manufacturer, has 1,500 people trawling the web, checking what has been said about the company.
When we opened Roast 10 years ago we got appalling reviews. I didn’t sack the chef or the PR firm. The articles made painful reading and we tried our best to glean things we could learn from them, but before they appeared our reception team had visited all the big firms in the area, handing them pre-opening dining offers and promising priority booking.
We had built the start of a reputation with them. Of course, we had no idea the reviews would be so damning but when you hear from a stranger a negative piece of information about your friend, you naturally stay with your friend.
A report by an organisation called Reputation Dividend looks at FTSE businesses and calculates how much a company’s standing contributes to its financial performance. It concluded that ‘reputation contribution’ – the proportion of a company’s market capitalisation attributable to its public stature – had grown steadily and now had an average 38 per cent score among firms assessed.
For publicly listed firms, reputation focuses largely on shareholders and shareholder value. For privately owned, smaller companies there are many more stakeholders alongside investors – from customers to employees to suppliers.
We can’t afford such algorithmic rigour, but I hope a PR firm can crack this for SMEs and speak our language more than theirs. For example, if boards could be convinced that customer databases should be viewed as a balance sheet item, their growth would be owned by all managers, not just the marketing chief.
The success of such a change in SMEs would be gauged by the day a marketing boss might earn a board place alongside the finance director.
Iqbal Wahhab OBE is the founder of Roast. You can tweet him @IqbalWahhab