How can a PR agency reduce unnecessary costs?

Key takeaways

• Audit your software stack every quarter. Most PR agencies waste 15-25% of their tech budget on unused or overlapping subscriptions for media databases, monitoring tools, and project management software.
• Match team capacity to client work precisely. The biggest cost is your people. Improving utilisation (the percentage of billable time) from 60% to 75% can effectively cut your salary overhead by 20%.
• Renegotiate with suppliers and fixed-cost providers. From office leases to insurance, proactive negotiation can save thousands annually. Treat these costs as variable, not fixed.
• Implement clear financial guardrails. Simple rules like pre-approval for expenses over £250 and monthly budget reviews prevent small leaks from becoming big problems.
• Focus on profitable client relationships. The most effective cost reduction is stopping work that loses money. Regularly review client profitability and have the courage to reshape your portfolio.

Running a PR agency is a balancing act. You need to deliver exceptional media coverage and client service while watching every penny. The pressure to grow often means costs creep up quietly. A new software tool here, an extra freelancer there, and suddenly your profit margin has vanished.

This isn't about cutting corners or damaging your service. It's about smart, surgical cost reduction. It's about finding the waste that doesn't add value for your clients or your team. For PR agencies, unnecessary costs often hide in three places: your technology stack, your team's time, and your ongoing fixed expenses.

Good PR agency cost reduction tips help you redirect money from overhead into areas that fuel growth, like better talent or business development. Let's look at where your money is really going and how to keep more of it.

Where do PR agencies typically waste money?

PR agencies typically waste money on unused software subscriptions, low team utilisation, and unprofitable client accounts. The waste is rarely one big expense. It's the accumulation of small, recurring costs that you stop noticing, like paying for a media database no one uses or having senior staff do administrative work.

Start by looking at your last three months of bank statements. Categorise every outgoing payment. You'll likely find surprises. Common culprits include duplicate tools (paying for both Asana and Trello), auto-renewing contracts you forgot about, and retainers for freelancers you no longer need.

Another major area is client-related expenses. Are you routinely absorbing costs for press release distribution, event photography, or premium reporting tools that should be billed back to the client? Many agencies treat these as cost of doing business, but they directly eat into your gross margin.

Finally, consider opportunity cost. Is your expensive central London office sitting half-empty because your team prefers hybrid working? Could that rent be better spent? These are the questions that form the foundation of effective expense management best practices.

How can auditing your software stack save money?

Auditing your software stack can save a PR agency 15-25% of its technology budget immediately. You likely subscribe to tools for media monitoring, CRM, project management, reporting, and design. Teams often add new tools without cancelling old ones, leading to significant overlap and waste.

First, list every software subscription, its monthly cost, and the number of user licenses. Then, ask your team two questions: "Do you use this tool?" and "Is it critical to your job?" You'll find tools that are barely used or that have free alternatives. For example, do you need the enterprise plan of a project management tool when a standard plan would suffice?

Next, check for duplication. Many PR agencies pay for multiple tools that do similar things, like having separate subscriptions for a media database and a separate influencer discovery platform. Look for all-in-one platforms that can consolidate several functions for a lower total cost.

Finally, negotiate. Don't accept the sticker price. Contact vendors and ask for a better deal, especially if you're paying annually. Mention you're reviewing costs and considering alternatives. Most will offer a discount to keep your business. This simple process is one of the fastest ways to save money small business owners often overlook.

What are the best ways to manage team-related costs?

The best ways to manage team-related costs focus on maximising billable utilisation and right-sizing your team structure. Salaries are your largest expense. Wasting this resource on non-billable work or inefficient processes is the most expensive mistake you can make.

Start by tracking utilisation. This is the percentage of your team's paid time that is billable to clients. A healthy target for a PR agency is 70-75%. If your rate is 60%, you're effectively paying a 20% premium on every salary. Use time-tracking software not to micromanage, but to understand where time goes.

Look for patterns of waste. Are senior account directors spending hours on media list building or basic reporting? That's a high-cost resource doing low-value work. Delegate that to a junior team member or use a virtual assistant service at a fraction of the cost. This is a key expense management best practice.

Also, review your freelance spend. Are you using freelancers as a permanent fix for a capacity gap? It's often cheaper to hire a full-time junior employee than to continuously pay freelance rates for ongoing work. Conversely, for one-off projects like a website redesign, a freelancer is more cost-effective than hiring.

The goal is to have the right people, doing the right work, at the right cost. Specialist accountants for PR agencies can help you model different team structures to find the most profitable setup for your client portfolio.

How can you reduce overhead and fixed costs efficiently?

You can reduce overhead efficiently by treating all fixed costs as variable and negotiating them regularly. Overhead includes rent, utilities, insurance, professional subscriptions, and bank fees. Because these costs recur monthly, they feel inevitable, but they are often negotiable.

Begin with your office space. The shift to hybrid work is a powerful lever. Do you need all that space? Could you downsize, move to a cheaper location, or switch to a flexible co-working membership? The savings can be substantial. If a long lease locks you in, consider subletting unused desks.

Next, tackle insurance and professional services. Get fresh quotes for your professional indemnity insurance every year. Loyalty often costs more. The same goes for accounting, legal, and banking fees. Tell your current providers you're shopping around. They will usually match a better offer.

Review all your utility and telecom contracts. Are you paying for landline phones no one uses? Could you get a better deal on internet or mobile plans by bundling services? Set a calendar reminder to do this review annually. This disciplined approach is how you reduce overhead efficiently without daily effort.

What client-related expenses should you control or bill back?

You should control and bill back all direct client expenses that are not included in your agreed retainer or project fee. This includes media database access for a specific campaign, press release distribution costs, event venue hire, photography, premium analytics reports, and outsourced design or copywriting.

Many PR agencies make the mistake of absorbing these costs to "be helpful" or because they forget to include them in the proposal. This destroys your profitability. A £500 distribution fee on a £3,000 monthly retainer wipes out over 16% of your margin.

The solution is clarity from the start. Your proposal and contract must have a clear section on "Out-of-Pocket Expenses." State that expenses over a certain amount (e.g., £100) will be pre-approved by the client and invoiced at cost, plus a small handling fee if appropriate. Use accounting software to track these expenses against each client job.

For ongoing costs like a dedicated media monitoring dashboard, consider building a monthly platform fee into the retainer. This is cleaner than billing it separately. Controlling these expenses is a crucial part of PR agency cost reduction tips that protect your bottom line on every account.

How does improving pricing and profitability reduce cost pressure?

Improving your pricing directly reduces cost pressure by giving you more margin to work with, making cost control less desperate. When you're underpriced, you're forced to cut corners to survive. When you're priced correctly, you can invest in quality and efficiency.

Review your client profitability quarterly. Calculate the gross margin for each client (the fee minus the direct cost of the team time and expenses spent on them). You will likely find that 20% of your clients generate 80% of your profit, and some clients may even be loss-making when you account for all the time they consume.

For unprofitable clients, you have two options: renegotiate the scope and fee, or respectfully end the relationship. Freeing up that team capacity allows you to serve profitable clients better or win new business at the right price. This is a strategic form of cost reduction.

Also, evaluate your pricing model. Are you selling time (hourly/daily rates) or outcomes (retainers based on value)? Value-based retainers typically allow for better margins as you become more efficient. They also create predictable revenue, which helps with cash flow planning. Our financial planning template can help you model different pricing scenarios.

What financial processes prevent cost creep?

Simple, consistent financial processes prevent cost creep by creating visibility and accountability. The goal is to make spending conscious, not to create bureaucracy. Three key processes are a monthly budget review, pre-approval for significant expenses, and a clear purchasing policy.

First, hold a 30-minute financial review with your leadership team every month. Compare actual spending to your budget. Look at the top 5 cost categories. Ask "Why did we overspend here?" and "Is this new cost recurring?" This habit stops small overruns from becoming the new normal.

Second, implement a pre-approval rule. For example, any single expense over £250 needs approval from a director. This doesn't apply to regular bills like software subscriptions, but it does apply to new purchases, freelance bookings, or client entertainment. It forces a moment of consideration.

Third, create a simple purchasing policy. Where should the team buy supplies? Which preferred suppliers get better rates? Can they use a company card for small items? Clear guidelines prevent everyone from choosing the most expensive or convenient option by default. These expense management best practices build a cost-conscious culture.

When should a PR agency seek professional financial help?

A PR agency should seek professional financial help when managing costs becomes reactive, when growth is straining cash flow, or when you lack the time or expertise to analyse profitability deeply. An external perspective can identify savings you're too close to see.

Signs you need help include: consistently missing profit targets despite good revenue, feeling surprised by tax bills, not knowing which clients are truly profitable, or spending too much management time on bookkeeping. A specialist accountant does more than file taxes; they become a commercial partner.

They can benchmark your costs against similar agencies, advise on optimal team structures, and help implement the systems discussed here. For example, they can analyse your last six months of transactions and provide a detailed report on waste and saving opportunities. This is an investment that pays for itself quickly.

Getting PR agency cost reduction tips from a specialist ensures the advice is tailored to your industry's unique economics, from retainer models to media spend. It allows you to focus on client work while knowing your finances are optimised for sustainable growth. If you're ready to take a strategic look at your costs, our team can provide that expert lens.