In the second of a series of articles examining how public relations firms across the country are Dealing with the Downturn, The Holmes Report spoke with Elliot Sloane, president of Sloane & Company. Sloane & Company is a New York public relations and investor relations firm founded in 1998.

The Holmes Report: Have you ever seen anything like this before, and how does it compare to previous recessions in the public relations industry?
Elliot Sloane: While today’s challenging economic environment is new for me, I’m not sure it’s all bad for our firm and the industry. Today, if you underdeliver, you lose the account. And you lose it quickly without a lot of handwringing and late night meetings and phone calls. Showing value is critical. What are clients getting for their money each month—and each day for that matter?  Because we are a midsize firm and operate in this ‘campaign mentality” we have not been thrown off balance by these new dynamics as much as some larger firms.
THR: What kinds of demands are clients making today that they weren’t making 12 or 18 months ago?
ES: Clients want a greater amount of accountability for the programs being developed and executed.  Activity reports can’t just be about last week’s work—clients want to know where we are driving the business and demand a far greater knowledge of their business and plans than ever before.  You know, it’s funny: While strategic counsel has not taken a back seat in the eyes of clients, most are looking for more tangible returns on their investment, such as press clips, analyst coverage, etcetera. Also, clients are having more “bad” days and therefore, we are dealing with a more difficult and emotional situation than in the previous few years. Knowing how to handle these encounters is a great tool.
THR: How has your approach changed to provide greater value for clients?
ES: We are working harder, thinking more and delivering more. You know, it’s not enough to send a client a clip of the article from the New York Times. Clipping services do this. We believe clients should get the analysis of the piece, a recommended action, as well as the article. Clients need to have total control over their budgets and we help them. We won’t mark up expenses and work on a retainer basis, so clients know what their costs will be for the year. We are being asked to pitch business once the sole domain of the big advertising-owned conglomerates, as service and value have become the mantras in today’s world.
THR: Have you expanded into new practice areas, or added new products or services?
ES: Yes—but only in areas where we can leverage our strengths. For example, we have made significant strides with our “212” to “202” financial/public affairs initiative. This program turns the traditional D.C.-based public affairs model on its head and along with our partner, grassroots expert Morris Reid, we bring a capital markets orientation to public affairs programs. This has proven very successful for a whole host of clients, including the Federal Home Loan Bank of San Francisco.
THR: Have you done anything particularly creative to win new business?
ES: Yes and no. Most of the business we win is via referral and therefore, there are no detailed RFPs to sort through and pretty videos to produce. In these cases, much of the decision-making process is on chemistry, expertise and reputation—these are hard to deliver in a video or holiday card. On the other hand, as we are invited to pitch for larger pieces of open business, we have thought through the process of how best to reflect who we are and what we are in this two-dimensional world of RFPs and RFQs. So, recently we developed a “Sloane family photo album” complete with biographical material on each of our account professionals for an exciting new business proposal.
THR: What kind of steps have you taken to control costs?
ES: Are we watching certain admin costs more carefully?  Yes and we have cut back on some extraordinary non-billable expenses.  But operate extremely lean and mean and always have, plowing profits back into the business.  We have had no layoffs or staff reductions or service cutbacks.  We are very aggressive on receivables, which keeps cash flow strong.
THR: Are there areas you have continued to invest in, despite the downturn, and why?
ES: Same things we have always done. We pay our people market rates and reward those who perform because that’s what you do to keep your clients’ happy. We invest in training and technology because that’s what you do to keep your clients happy. We just paid bonuses to our staff for 2001.We are in this for the long haul and we want to maintain our edge, our differentiation and our ability to win in the marketplace.
THR: What has been the impact of the downturn on culture and employee morale?
ES: I have been as honest as I can with our people about the state of our firm and the industry at large.  Each week, we review the top line and focus everyone on revenue goals for the year. There are no surprises—which I think makes us a bit different from other agencies. I think this information empowers our people and gets them focused even more on client service and delivering value each day for our clients.  And I think because we are growing in a terrible marketplace, I think our people feel good about themselves and their contributions to the top and bottom line.