Communications agencies got back on their feet in 2021 after a deflating 2020, but this is no time for marketing and PR firms to rest on their laurels, in terms of client growth, according to a newly released agency survey and report from marketing business development firm RSW/US.
This year’s annual survey and resulting RSW/US 2021 Agency New Business Report saw many small and mid-sized agencies growing or regaining lost growth from the previous year.
For example, 38 percent of agencies said it was easier or a lot easier to obtain new business this year, vs. just 7 percent in 2020. And “business from existing clients” was reported as the most effective method/tool for bringing in new business (71 percent).
But with this rise of organic growth, firms should be aware of warning signs heading into 2022
The first is a multi-year decline in referrals, traditionally the predominant method for agencies to gain new business. There was a slight dip from 62 percent in 2019 to 60 percent in 2020. 2021 saw a deeper drop—to 53 percent.
Another sign: agencies are not investing in the development of “new” new business, only relying on existing client growth
This plays out in the low percentages (all under 10 percent) attributed to phone calls, social media, inbound, and traditional mailings.
A few other key stats that exemplify the lack of a strategic plan around “new” new business:
- Ad agencies said the predominant reason it was harder to obtain new business in 2021: “harder to break through to prospects” at 59 percent, up from 42 percent in 2020.
- 29 percent of agencies say they have a client that represents more than 50 percent of their business, vs. 17 percent last year.
- Hiring for the new business director position at an agency is at its lowest level since the survey started in 2010, with just 32 percent of agencies hiring a new business director in the past 3 years.