Fairly early on in the pandemic, global agency strategists believed that COVID-19 would fundamentally change the way agencies work. Along with these changes, it appears that about two-thirds (67%) found gaining new business harder or much harder compared to the year before. This is per a report [download page] from RSW/US, which finds that things have gotten better for agencies this year.
Indeed, the report indicates that agencies are having less difficulty obtaining new business this year compared to 2020. Only a little more than one-quarter (28%) of the 120 US agency executives surveyed say that obtaining new business this year is harder/much harder than it was in 2020. The news gets better, with close to 4 in 10 (38%) saying that it’s gotten easier or much easier to obtain new business this year, up from just 7% who said the same last year.
The pandemic might not be totally to blame for the increased difficulty in obtaining new business. Although close to 6 in 10 (56% of) agencies reported that the number of new business opportunities decreased in 2020 compared to the year before, the share of agencies that were finding it harder to obtain new business had already started an upward trend in 2016. And, by 2019, the share of agencies who believed winning new business would become more difficult had increased to 43%. Nevertheless, 2021 appears to have seen a resurgence in opportunities, with half (51%) of respondents saying they have seen new business opportunities increase compared to last year.
The pandemic also had little effect on most agencies’ positioning: only 16% say they changed their agency positioning in response to COVID. This may not have been necessary considering that nearly all respondents currently believe their agency’s positioning is extremely (22%) or somewhat effective (72%).
7 in 10 Rely on Business with Existing Clients to Generate New Business
A slight majority (52%) of respondents report being satisfied with the success of their new business plan. When asked which marketing tools have been most effective in generating new business over the past year, 7 in 10 (71%) cited business from existing clients (top 3 choices). They also rely on referrals (53%) and networking (43%).
When it comes to closing “new” new business, about half (49%) say their average closing percentage is at least 50%. And, the majority (87%) say that it takes 1-6 months from the first meeting to close a piece of business. One sticking point in closing business is likely to be price, with S2 Research reporting that businesses are not satisfied with what agencies charge.
Content and Collaboration
Two-thirds of respondents say they have a blog on their site used to drive new business. The largest share (34%) post to their blog monthly. Some 8 in 10 (81%) also say they post content on other platforms to drive new business, with nearly all posting on LinkedIn.
The majority separately report that their new business wins have not involved collaborations with in-house agencies over recent years. Likewise, 52% say that the new business they’ve won over the past year doesn’t involve collaboration with other or partner agencies.
Finally, there has been a potentially problematic rise in the share of agencies that say they have a single client that represents more than 50% of their agency’s business. This year, 29% say this is the case, compared to 17% who said the same in 2020.
The full report can be found here.
About the Data: Findings for 2021 are based on a survey of 120 US agency executives.
Thanks to Marketing Charts!View Article