I ran a small agency for a while in the late 90s where we experimented with value-based pricing. You need a mature and forward-thinking client to do it (we found that smaller companies were better…we were then generally dealing with senior-level decision-makers) but if you do get a strcuture in place, it certainly focuses your team's minds on generating results (getting on the phone, selling in stories quickly and efficiently…rather than poring over releases and collateral for hours).

Quick case study – we worked with a small advanced technology company who's CEO was very keen on being regularly featured in the FT (and who isn't?). But he placed a value on that – and he reckoned that to his business, a piece of FT editorial was worth the same as a half-page ad in the FT which, at the time, was ratecarded at £34,000. Boy, did that focus our minds! And for nearly a year, his company was featured in the FT every month, and for nearly a year, he paid us £34,000 a month. We were an agency of four people at the time. And, of course, in working with him to create FT-worthy stories every month, we were creating loads of additional trade press coverage that he saw as a bonus.

Remarkable – and highly unusual – but the value of the results PR achieves is often more than the cost of the time involved. So why shouldn't we get a fair return?

For us fixed fee is just the same as billable hours. All it means is that you calculate the hours in advance and if you get it wrong then you take the hit, not the client. That's actually how we work with most people whether it is a project fee or a monthly retainer.

I am very uncomfortable ethically in being give a big fat cash bung just for doing my job. Equally I believe in a fair day's pay for a fair day's work. If you're being paid then you have a duty to do your best. Does that mean you won't do your best if working for a client that can't afford to give you a bung?

The challenge is that there can never be guarantees in PR because there are so many variables to manage and so it would be a challenge to build a sizable business based on an alternative model. As far as I'm aware, only Max Clifford has managed to do this in the PR industry.

I am talking about those 10k a month retainers.

On ideas you are confusing idea generation with monetizing ideas. The Apple analogy someone used is a good one. Nobody at Apple asked the market to fund the idea – they funded it then monetized it.

So long as agencies get stuck in the current paradigm of fee-based idea generation they are screwed. Why shouldn't you have charged for outcomes rather than billable hours? What you in effect did was turned yourself into a high value commodity.

Oh, and btw, ad and interactive agencies got over this a long time ago…

I agree the billiable hours thing is hard to grasp on the agency side – spent most of my life there. But the sooner agencies understand that the billable hour is only useful as an internal metric, the better. Externally, we don't care and are happy to pay for value. I'm actually surprised at how often agencies are willing to show in public how inefficient they are.

As a client, I see a pitch as an opportunity to assess a consultancy: its people, its track-record and likely creativity. And the all important question: is the chemistry right? I'd be surprised to be presented with a killer idea in a pitch – partly for the reasons you give, but also because it usually takes time for a new client-consultancy relationship to pick up speed.

It's also worth stressing that much depends on the quality of the client. Too many companies don't really know what they want, which hardly makes for a comprehensive, well thought out brief.

Rob