In the third of a series of articles examining how public relations firms across the country are Dealing with the Downturn, The Holmes Report spoke with Roger Fischer, president of FischerHealth, a Los Angeles-based public relations firm focused on the healthcare industry.
Paul Holmes: Have you ever seen anything like this before and how does it compare to previous recessions?
Roger Fischer: Last year was a soft year for agencies, and we weren’t immune. That said, our revenue dropped less than 20 percent and that was following a record year of greater than 50 percent growth in 2001. As an agency focused on healthcare, we believe we have been somewhat insulated from the recession, though clearly we have seen an impact, especially in the emerging technology sector where companies have not received the levels of funding they were expecting.
  Fortunately, our agency made a very conscious decision over two years ago to not have so many of our eggs in the healthcare technology basket, making sure our overall client mix was fairly diversified. In addition, our deep industry knowledge has allowed us to retain a number of long-standing relationships.
We were better able to weather the 2001 downturn as a specialist agency than lesser recessions in the 80s and early 90s when we were a generalist firm and therefore had less focus.
PH: What new demands have you been seeing from clients?
RF: There is a greater focus on value and return on investment, in part because client budgets have been reduced and they are having greater demands placed on their allocation of resources. From a new business perspective, we have also seen an increase in the number of prospects asking to see proposals that have some level of top-line programming recommendations as opposed to simply presenting agency capabilities. At the end of the day, this is still a relationship-oriented, results-driven industry where depth of knowledge and expertise can provide a healthy point of differentiation – and value.
PH: What have you done to provide greater value for clients?
RF: While it may seem like a fairly simple idea, the greatest value we can provide our clients is staying true to our mission and focus. We have been a healthcare-only firm for the last nine years. When the economy began to soften, we did not chase clients outside our core competencies to simply bring revenue into the firm. We have heard from our clients that our deep industry knowledge helps us get up to speed quicker, allowing us to provide value from day-one of the relationship.
  Similarly FischerHealth has committed to an infrastructure that allows us to deliver great client service as well as sound strategic counsel. In addition to the account teams, we have established senior positions in operations that support our internal account teams: a chief operating officer (in addition to the chief executive officer); a chief account officer and a chief marketing officer.
  Lastly our agency has taken great strides to both retain and develop our staff – with clients ultimately benefiting from the continuity and professional growth. This year, our agency is expanding its professional development program by creating a dual-track curriculum that tailors the training based on staff level and competencies required at that level. In addition, our firm worked hard to limit any downsizing, and through smart financial management, we were able to distribute a full payout of our 401k match program, profit sharing as well as staff bonuses, helping retain our most valued resource.
PH: Have you expanded into new practice areas or added new products or services?
RF: As an agency steeped in healthcare, we have seen first hand the convergence between the biotech industry and the pharmaceutical, medical device, diagnostic and health information technology sectors. Though we have not historically represented big pharma clients, we are working to further leverage our deep knowledge and experience in the other categories to help bring greater value to biotech firms. We believe that biotech represents a great growth opportunity for our agency and are working to develop new products and services to better address their unique needs.
Similarly, our agency saw an opportunity last year to meet an unmet need on the hospital and provider side of the business by developing a new group of products to serve organizations faced with HIPAA (Health Insurance Portability and Accountability Act) compliance. In addition, our agency has also expanded its identification of synergistic relationships – or preferred providers – to continue to bring greater value and resources to our clients.
PH: Have you done anything particularly creative to win new business?
RF: To help us in our successful Blue Shield of California pitch, our agency developed a unique advisory board that was used to help in the fact-finding stage of our presentation development. In addition, we conducted market research (both qualitative and quantitative) to help reinforce the importance of some of our strategic recommendations. Lastly, we reinforced our commitment to deliver superior customer service by sending the entire pitch team back to San Francisco for a one-and-a-half hour follow-up meeting to our presentation.
PH: What steps have you taken to control costs?
RF: The middle of last year, we took a very close look at our non-people related overhead costs, and were able to realize some savings by renegotiating contracts with several suppliers as well as reducing our use of outside consultants. I think we have also been smarter with our marketing dollars, getting more for less in 2001. In addition, we have spent a considerable amount of time and effort focusing on cash management. We are now requesting money up front from clients and holding it as a security deposit and are also consistently getting vendor costs paid up front. Bottom line is that we’ve been able to speed up the flow of incoming cash while slowing down outgoing cash.
PH: Are there areas you have continued to invest in despite the downturn in the economy?
RF: We made a conscious decision to fully fund programs such as profit sharing and the 401k contributions and to support our employees through our ongoing professional development series. On the people side, we continued to invest in mid-level salary increases while holding firm on senior level salaries—moving more of their added compensation to incentive-based programs which will allow these folks to earn more while keeping fixed overhead down. Lastly, we continued to treat recruitment as a full-time proposition, utilizing our own dedicated, in-house recruiter, supplemented with outside resources.
PH: What has been the impact of the downturn on culture and employee morale?
RF: In truth, I think the impact has been minimal. Throughout the year, our executive committee was very committed to keeping our employees informed of the issues we were facing. People knew where they stood and appreciated all that management was doing to keep the agency financially sound and focused on client service, results and the ability to respond when things improved. Our agency actually had very few layoffs and people were kept busy—both of which helped keep our culture intact.