In our 2023 Agency New Business Report, we asked agencies what they considered to be the most effective tools at generating new business.

Continuing the trends from 2021 and 2022, new business to date in 2023 has come from referrals and existing clients.

Both of these sources should be part of your business development program, but more than in previous years, we’re seeing agencies report these as less reliable in 2023.

Referrals came in as the number one new business generator at 69%, with Business from existing clients at 50%, and Networking at 46%. For reference, in 2022, Referrals come in
at 64%, Business from existing clients at 59%, and Networking at 46%.

So the actual percentage on referrals is higher this year by 5 points, which is interesting, given what agencies have already reported more than once, some version of referrals
starting to dry up in 2023 versus past years.

 

Most Effective Tools At Generating New Business: Referrals Win Again

Referrals came in as the number one new business generator at 69%, with Business from existing clients at 50%, and Networking at 46%. For reference, in 2022, Referrals come in
at 64%, Business from existing clients at 59%, and Networking at 46%.

So the actual percentage on referrals is higher this year by 5 points, which is interesting, given what agencies have already reported more than once, some version of referrals
starting to dry up in 2023 versus past years.

And as far as existing business, quotes like the following from a previous question should raise some concern:

It is difficult to motivate employees to do consistent follow up with prospects.

Quotes like these, to be fair, are not widespread, but if you find yourself in this situation, it needs to be addressed, and treating new business as agency-wide is the first
step.

When it comes to tools, focus is all-important.

Your firm doesn’t need all the tools, and especially for small and mid-sized firms, there’s not enough time to use them all.

Typically you have a great majority of the core tools already in place: phone, email, social, for example.

Beyond that, an email delivery tool, some form of tracking for those emails (and ideally on your site) and then potentially a CRM, which you ultimately will need for any serious business development effort.

Tools like ChatGPT, which we discuss further in our report, should certainly be on your radar, for your agency and your clients, and could be very helpful to your overall effort.

And as a side note, the majority of numbers in this question stayed relatively the same compared to last year’s report with one exception:

Conferences as a tool to drive new  business came in at 15% in 2022, versus this year at 28%-quite a jump!

Anecdotally, we can convey conversations with agencies, client and non-client, who report finding conferences coming back post-covid in a meaningful way.

The key is zeroing in on a tight group, and having a plan in place pre-conference, and most importantly, post-conference for prospecting.

So 2023 has been kicking small and mid-sized agencies around so far this year from a new business standpoint, and in this second post in a series, we explore the question, Why Is It Harder To Obtain New Business?  

Per Jeff Graham, President of Cactus in Denver, (2023: The struggle is real)

 The first three quarters of this year have been somewhere between a head-scratcher and a dumpster fire — but the rest of it doesn’t have to be.

If agencies stay focused on the spaces where we have a right to win; empathize with the unique pressures our clients are facing and eradicate risk; and capitalize on this moment and create our own luck, then there’s hope for 2023 — and a brighter 2024 yet.

Couldn’t agree more with Jeff and his optimistic take, but as he points out, agencies have some work to do. 

As I pointed out in my previous post (Ad Agencies Struggled with New Business in 2023-So What’s Next), 58% of agencies said it’s been harder or a lot harder to obtain new business this year so far. 

So in order move forward and embrace a more profitable 2024, I want to explore the reasons why agencies found acquiring new business to be more difficult in 2023, and look at those areas agencies have control of. 

Taken from our RSW 2023 Agency New Business Report, we asked agencies:  

Why Is It Harder To Obtain New Business? 

In previous surveys, agencies have unilaterally given “breaking through to prospects” as the main reason why it’s harder to obtain new business.

This year, for the first time ever, it comes in third. 

So what follows is a breakdown of the top 8 reasons:

Fewer Opportunities Out There (61%): 

At the forefront of the challenges identified in our survey is the perception that there are simply fewer opportunities available.  

Competition, to be fair, contributes to a more limited pool of opportunities. The ad agency world is a crowded market. 

The question I would ask, in the spirit of tough love, is: How regularly did you actually pursue new business in 2023? 

I do think for many small and mid-sized agencies, perception, as used above, is the key word here. 

If your firm is not actively pursuing new business in some form, then there will, by definition, be fewer opportunities. 

That is not to take away from the very real situation of marketers and budgets pulling back in 2023-that you cannot control, but if a plan for new business you can control. 

Prospect Budgets Too Small (55%): 

It should be noted that agencies in our survey are not referring to client budgets (which also saw reductions) but prospect budgets for potential work. A 2023 report from Survey Monkey (2023 Marketing Report: Top challenges and opportunities) pointed out 

33% of marketers say their budgets will decrease or stay the same in 2023. 

From our own 2023 New Year Outlook Survey, only 36% of agencies believed their clients would increase marketing spending somewhat to significantly, a 37-point drop at that point from 2022. 

So agencies had a gut feeling on this at the outset of the year, and indeed, anecdotally, we did see some pullback from marketers. 

And post-pandemic, many agencies were able to pick and choose projects and had it really good. Those same agencies got a jolt around Q2. 

So moving into ‘24 would be the time to potentially consider smaller opportunities in the short term, that are, critically, still within your wheelhouse, in order to land and expand. 

Harder to Break Through to Prospects (47%): 

While no longer the primary challenge, breaking through to prospects remains a significant hurdle.

Without a doubt, it’s never been harder, but at the same time, the amount of useless emails and outreach overall make it harder for you to break through, but it also provides you with an opportunity.

An opportunity to use messaging that does two critical things: 1) Show your agency expertise and 2) how it can help solve their business challenges.

I am continually shocked with the lack of these two elements in prospecting outreach.

Always make sure you show what’s in it for them!

Prospects Go Dark (37%): 

Not a new trend but endlessly frustrating.

However, remember that a lack of response doesn’t always mean lack of interest.

You have to remember how busy your prospects are, and how much noise surrounds them-professional and personal.

If this is happening more often that not, here’s a step-by-step “ghosting follow up schedule” to help you stick with your prospects if they’re ghosting you – and more importantly – help you get a clear yes or no from them, so you can move forward or move on.

You’ll find 3 email templates and 1 VM template you can adjust as needed to fit your situation.

Can’t Find the Right Person (15%): 

Identifying and reaching the key decision-makers within a potential client organization remains a persistent challenge, and the first key is making sure you’re going after the right titles.

That may sound entirely obvious, but it’s a problem for many agencies. 

Key here is to do the homework up front, and be sure to differentiate between who you actually work with ongoing within a client’s company versus the decision maker you’re reaching out to when prospecting.

They’re not always the same person.

No Process in Place (13%): 

Establishing clear methodologies for lead generation, qualification, and conversion is, of course, imperative. 

We’ve discussed before in our ongoing content, that the first step is forcing yourself to take this first step.

The only one to blame for no process is yourself, but of course that doesn’t mean you may not need help.

The Resources dropdown on our home page has a lot of info to help you get started, or restart.

No Time to Do It (11%): 

See above.

As easy as it is to say, time must be made.

Making a plan you can actually stick to is the first step.

 Can’t Make the Investment (5%): 

This is certainly legitimate, but you also don’t need a large outlay of cash to go after new business initially.

Looking at the 4 key areas of business development( referrals, organic growth, inbound/content, and outbound), you already have the tools to handle all four of those with no additional cash outlay.

As you progress, however, yes, you will need other tools, like a CRM, for example, but an internal business development process (if you’re not hiring someone solely dedicated to the job) does not require a large investment to start the process internally.

In Part 3 of our series we’ll talk hiring for the new business director position.