Agencies’ new business generation suffered during the early days of the pandemic, but that gave way to less anxiety and an easier environment last year as business rebounded. The rebound to more fruitful conditions was short-lived, though, with difficulties growing again, according to the latest Agency New Business Report [download page] from RSW/US.
The survey results indicate that 43% of agencies surveyed find it harder or much harder to obtain new business than they did last year, compared to 28% who said the same in 2021. Indeed, just 17% are finding it easier or much easier than last year to obtain new business, less than half the share (38%) who found it easier last year.
If anything, the results suggest that new business generation is approaching pre-COVID levels after wild swings the past couple of years. The 43% finding it more difficult to obtain new business this year is on par with the share (43%) from 2019, and within the 31-51% range from 2008-2016. (For context, fully two-thirds – 67% – of agencies surveyed in 2020 reported increased difficulties getting new business that year.)
Notably, fewer than one-third (32%) of respondents have seen the number of opportunities for new business increase this year, while 26% have seen such opportunities decrease. At the same time, marketers report a relatively steady level of resource spend on agency business this year.
Still, there are clear differences from last year, when half (51%) of agencies said that new business opportunities had grown.
Although this year more than one-quarter said that there are fewer opportunities for new business, this is not the leading reason that agencies are finding it harder to obtain new business. Instead, the top-cited reason – as it was last year – is that it’s harder to break through.
Another notable culprit behind agencies’ growing challenges is an inability to find the right new business person. In fact, staffing challenges pop up at various points in the report. Only about one-third (32%) of respondents have hired a full-time new business director to prospect for their agency within the past 3 years. While that’s the same figure as last year, both are down from previous years, which had been in the 39-46% range.
Moreover, the percentage of agencies saying that their last new business hire was very or somewhat successful dropped from 60% last year to just 41% this year, likely contributing to hiring hesitancies.
A lack of new hires may also be the result of a perception that they might not be that necessary. When asked how they’re going about winning new business, easily the most effective methods cited by respondents over the past year continue to be referrals and business from existing clients, with networking also rising in the past couple of years as a top-cited method.
- Just under half (49%) of respondents are satisfied with their new business plan/program.
- Most agencies say it takes 1-6 months to move from a first meeting to closing a piece of business.
- Thinking of the new business they’ve won over the past year, 46% of agencies said that it involved collaboration with in-house agencies.
- Almost half of agencies say that they typically find themselves in competitive pitches about once a quarter.
- Fewer than one-quarter (23%) have a single client that represents the majority of their business, down from 29% last year.
- Four in 10 monitor their agency’s sender reputation specific to email and their outreach.
- Some 28% incorporate intent data in their business development strategy.
For more, download the report here.