Community bankers often ask, "Should I hire a public relations consultant?"
The reason is simple: There are plenty of them around. In fact whenever you find someone who has left a job as a reporter on a newspaper or as a media newscaster or commentator there is a likelihood he or she will set up as a public relations consultant.
But before even thinking of hiring a consultant, the community bank's board and officers should ask them selves: What do we want a public relations program to do for us?
This is an issue that affects larger as well as community-size banks. For often, PR professionals report that they have been hired, but the and their clients end up unsatisfied with the results of their work simply because they were not given specific marching orders.
First of all, public relations people state emphatically that PR is not marketing. It is less specific than that.
What are some of the goals that a PR program can try to achieve?
Blowing Their Own Horn
First, let's face it. In some organizations -- both banks and nonbanks, large and small -- the CEO's basic goal, whether he admits it or not, is to aggrandize himself and get his name in print.
If that is what you honestly want, then a PR professional can be of considerable help. For they' know how to get stories picked up by the media, and how the CEO can do things that will get the media's attention.
But if your goals for PR are different, then maybe a public relations professional is not so important to success.
Touting the Stock
Some organizations look to PR as a way of hyping their stock. This is important to them because it both makes shareholders happy, including employees with option plans, and it helps keep the stock at a price that will facilitate mergers or acquisitions.
The higher the price-earnings ratio, the less you pay in dilution when acquiring another bank and the more you get for your own bank if you sell.
Here PR may not be as effective as sitting down with the market makers and pitching your stock to them. Sometimes the best PR approach is simple honesty.
The market maker has to put a lot of his own capital into making a market in your stock if you want any liquidity. And he doesn't want any "surprises" that wipe out consumer demand and thus reduce the value of his investment.
Working with the market maker, developing a dividend reinvestment plan to create demand for your stock, and giving the market maker an opportunity to bid on equal terms with anyone else on your other investment business for the bank portfolio and trust operations are more valuable than any PR campaign could be in boosting the aggressiveness of the market maker in positioning and touting your stock.
What about generating a feeling of good will for your bank in the community? In smaller towns this is more important than in larger ones since everyone knows the bankers. And the ones who help the community are generally favored over those who take a more impersonal "business as usual" attitude.
Here a PR consultant can be of great value. But before spending money to hire one, the banker should grill the adviser about his ideas for helping improve the bank's image.
This is the key. PR people do not earn their keep by merely sending out press releases. And they are not needed if your goal in PR is just a higher stock price.
We would love to hear some of your ideas as to how PR has helped or not helped your bank. And I'll also give some of mine as to what I think public relations can do to help in image building and, yes, even boosting your personal image and stature in the community.