Referrals are in decline, and in-house agencies abound
If you’re not feeling it yet, you will.
The changing agency and marketer landscape has significantly impacted the way they find and win new business.
No longer can agencies exclusively rely on referrals and networking to drive the success of their firm.
Once a vital source of new business, referrals from marketers as a source of agency new business have dropped significantly since my firm, RSW/US, first started measuring their importance as a new business resource in 2007.
In 2007, 94 percent of marketing agencies we surveyed selected “referrals” as one of their three primary sources of new business for the firm.
Back in the day, agencies worked their contacts, and there was less of a need to actively and proactively search for new business.
Agency principals would network, the phone would ring with a new referral, and the business would grow.
Today there are more agencies going after fewer agency of record (AOR) opportunities. There are more big networked agencies pursuing opportunities they would have never considered a decade ago. There are fewer marketers, because big conglomerates are consolidating companies and cutting staff.
In 2011, the number of agencies listing referrals as a primary business source fell to 71 percent.
And in our most recent Marketer-Agency Survey, the importance of this source dropped to an all-time low of 64 percent.
As Vice President of Sales at RSW/US, Lee drives sales efforts to bring ad agencies and marketing services firms on board with RSW, creates content around successful new business tactics and takes part in RSW/US marketing objectives, including social media channels, blog content, webinars, video and speaking engagements. You can find him on LinkedIn (https://www.linkedin.com/in/leemcknightjr) or Twitter (@leemcknightjr).