The previous two years saw many small and mid-sized agencies growing or regaining lost growth from the previous year, but this year finds agencies with a more challenging landscape, according to newly released research from marketing-focused outsourced business development firm RSW/US.
For example, agencies report organic growth fell by 11 percent in 2022 as an effective way to generate new business, the firm’s new 2022 Agency New Business Report reveals. Also, only 32 percent of agencies said the number of opportunities for new business increased in 2022, versus 51 percent in 2021.
Another indicator of a more challenging new business landscape: in 2021, only 28 percent of agencies said obtaining new business (compared to the previous year) was harder or a lot harder. In 2022, it’s risen to 43 percent.
A telltale sign, and a source of the difficulty in driving new business this year: agencies are not investing in the development of “new” new business
This plays out in the low percentages (all under 15 percent) attributed to phone calls, social media, inbound, and traditional mailings.
A few other key stats that explain this increased difficulty and exemplify the lack of a strategic plan around “new” new business:
- 55 percent of agencies say it’s harder to break through to prospects compared to last year.
- Agencies reporting their last new business hire was very to somewhat successful dropped from 60 percent in 2021 to 41 percent in 2022.
- In 2021, hiring for the new business director position at an agency fell to its lowest level since 2010, with just 32 percent of agencies hiring a new business director in the past 3 years. In 2022, the number is, once again, at 32 percent.
The growth so many firms had in 2021 should be celebrated, but change is a constant in our industry, and existing growth looks to be slowing. It’s critical heading into 2023 that agencies have a manageable framework for “new” new business.
Over 3,000 Agency executives nationwide had the opportunity to participate, and in fielding the survey, the firm wanted to discern how the challenges and dynamics of agency new business efforts have evolved as we came out of 2021 and progressed through 2022.