Should agencies focus on new or existing clients in an economic downturn?
As part of our Predictions series, we examine the approach being taken by agencies to new business this year.
Should agencies shift their new business approach in a recession?
In 2023, should marketing agencies prioritize picking up new clients, or focus on building up their existing roster? On the one hand, there’s an economic downturn underway and times are hard – so additional income will be vital to keep businesses growing.
On the other, pitching very heavily for new accounts can put a strain on resources and stretch an agency’s ability to meet all of its obligations to clients.
We asked experts from across the globe and the industry to share their new business approaches.
How do you solve a problem like… choosing how much new business to pitch for?
Ian Sohn, chief executive officer NA, Iris
I don’t see organic versus net-new growth as 'tension,' or at odds with each other. Rather, the economic uncertainty is forcing – and this is not a bad thing – us to focus the right people on the right problems; rather than everyone on every problem. So, I want our most senior client partners obsessed with anticipating client needs and delivering flawless work. Organic growth will undoubtedly come from that. In parallel, I want our new business team only pursuing opportunities we have a right to win; and in those pursuits, managing the process like drill sergeants so we don’t waste a minute of anyone’s time.”
Steven Moy, chief executive officer, Barbarian
We’re proactively looking for new clients despite market constraints and decreased budgets. Rather than wait for search consultants to contact us, we’re researching market categories and brands to see how our unique offerings – including social marketing innovation and social commerce – can add value. We only reach out to brands we feel are courageous, and willing to take a leap from more traditional paid marketing efforts to earned and owned. For existing clients, we know they are looking to us to help weather the storm, so we look to blend creative with new technologies so we can unlock more growth.
Helen Lee, head of new business and marketing, Wunderman Thompson UK
No business should ever look to new business as the sole avenue for growth. Pitching can be a high investment so placing importance on retaining and growing existing clients is as important. Balancing client demands and building a shiny new pipeline is a constant game of Whac-A-Mole. It’s why when you choose to pitch, it needs to be worth it. We qualify and score every brief with the five Cs – client, creative, capacity, cash and conflict. 4/5 you’re in. 1/2 you’re out. Three is a discussion. Last year, we said no to more briefs than ever before. In a good way. Growing in the right way will lead to more sustainable growth than just winning to say you’ve won.
Hannah Partridge, senior vice president, client engagement, portfolio, international, TMS
‘Speculate to accumulate’ feels dated and risky. That’s not how we do things at TMS. Our focus this year is to consolidate, play to our strengths and grow against our core disciplines.
More and more, we’ll avoid project-only pitches. Instead, we’ll seek out long-term opportunities with clients that are looking for meaningful partnerships and know how to treat agencies fairly.
Of course, I’m not going to give away all our secrets, but the days of over-investing in pitches and giving our highest-value outputs away for free are gone. The real work should begin post-appointment and be respectfully paid for.
Suggested newsletters for you
Tanya Whitehouse, chief executive officer, Elvis
Since becoming a B Corp, our criteria has simplified: to be considered, a client must align with our core values and have science-based sustainability targets. Last year we turned down £3m of previously viable leads due to these criteria. If a new client passes this stage then we ask three questions: “can we win it?”, “do we want to win it?” and “can we resource the pitch responsibly?” If the answer to these is yes, we’ll go for it. We put this into practice last year and it resulted in a (no bullshit) 100% win rate, a clear conscience and a happy team.
Tracey Barber, senior vice president, client growth, Rapp UK
The priority is to create a positive, happy, and empowered growth culture – the results then follow. Putting people first with an always-on growth mindset makes new business everyone’s business. First and foremost, delivering against our clients’ needs creates more value for their business and in turn, creates opportunities for us. The other focus is supporting agencies within the network with opportunities that are often quicker to convert. This leaves the capacity to focus on the usual new client pitches, using IPA pitch pledge to challenge the client brief/timings, then doubling down on a select few. Agency growth culture is essential in 2023.
Kat Shafer, chief client officer, EP+Co
Yes, times are hard and there’s a lot of pressure to prepare for the unknown by increasing new business – but we’re resisting the squirrel mentality. That is, we’re not storing up just any opportunity. More than ever, it’s critical to remain strategic and keep your new business criteria in place. Growing existing client revenue should always be a priority, and you can’t do that if you’re overcommitting to opportunities that aren’t a good fit. Be selective, pursue only those opportunities that make sense for your agency, and assess how much investment time you can afford to put into your resources.
Damaune Journey, global chief growth officer, 72andSunny
At 72andSunny, we are fortunate to have many opportunities to work with brands given our history of success in growing businesses. So our challenge is being selective, which is even more important now. To do that effectively, as an agency that unlocks possibilities for the most ambitious brands in the world, we lean into our core beliefs that creativity is not an ad, but a mindset and a business multiplier for brands. As such, we use those principles as a filter to match with partners that have bold aspirations.
Additionally, to meet the market demand, we have recently launched a strategy consultancy that delivers actionable strategy from creative thinkers for brands that may not need a full-service agency at this time due to budget constraints. As one client leader said, “you’re not a marketing agency, you’re a revenue-driving, business expansion company” and that orientation is one that helps brands and us even more in times like these.
Carly Avener, managing director, Leo Burnett UK
At Leo Burnett, we pitch in a selective and responsible way: we aim to achieve healthy growth, instead of falling into the cycle of pitch addiction. This refined focus has led to significant growth and a strong sense of momentum within our agency: all while keeping our Leo Burnetters’ mental health and well-being front of mind.
While being selective is essential, creative agencies thrive on variety, so it’s important to keep those new opportunities coming in… allowing our creatives to do their best work and stay at the top of their game. In turn, winning new business allows you to hire new people, bringing in a variety of voices and people, helping us continue to grow and diversify our thinking. Striking a healthy balance is key, and it’s something we’ll continue to aim for in 2023.
Roger Barr, chief digital officer, iCrossing UK
In 2023, we’ll continue to focus on strengthening partnerships with clients, and when pitching, we’re careful about what we go for and that won’t change. Rather than rely on pitch processes we’re looking to get on the front foot. We’ve developed a range of business outcome-driven strategy products, which work equally well as up-sells to existing clients as they do for fostering new conversations. We’re being very selective about the sectors and companies we’re targeting, even though we’re not officially in a recession yet, we know there are businesses that will be looking to invest in their digital experience.
Joanna Trippett, UK managing director, Dept
Businesses often rely more on word-of-mouth recommendations in a recession as it’s lower risk, so the best way for us to get those recommendations is by keeping our existing clients happy. Not only are they the bedrock of the business, but they are also a great new business lever. New client wins are, of course, essential for growth. Our strategy is that if we are putting any energy into a pitch, we are putting 100% into it. If we can’t put 100% into it, we don’t do it. There’s no joy for anyone in a half-job pitch; a disappointed team or client is a waste of energy.
For new business, we pick clients that we think are a good match for us; ones that have interesting problems that we can fix with pioneering solutions, and can benefit from our proprietary technology to automate, optimize and accelerate their digital activity. Finally, it’s critical they excite our team because to win a pitch, you need a motivated and energized team and if you don’t have that, frankly, there’s no point.
Sharon Flaherty, chief executive officer, communications agency Folk
Our areas of focus are growing the team to create more capacity for new business and client satisfaction. We have a five-year, 100% retained client retention rate and this remains a key target for the agency. In the short term, this means being very selective about new business while we boost team numbers because client satisfaction can’t be a casualty of agency growth. Our additional hires will create more capacity for new business without it detracting from current clients as well as creating more time for personal development. Staff development helps staff retention, which helps client retention, a crucial part of our 2023 strategy.
Pedro Martins, chief growth officer, Total Media Group
As always, the answer to this question remains consistent – can my agency add value to this client and help solve their problem or drive their ambition? And do our teams have the capacity to deliver their best, not just in the pitch, but for the length of the relationship, without compromising their sanity or our existing client’s work?
Our team’s priority is delivering for our existing clients and always should be. If an opportunity fits the above criteria, we get involved! We review all opportunities under this lens, considering the commercial opportunity, sustainability, purpose credentials, and ambition – given we are a B Corp organization, we feel it’s important to work with like-minded brands.
We don’t go for everything and neither should we, by saying yes to one thing means we have to say no to another. There is always opportunity cost and we take that consideration seriously, ensuring we do this in full support of the team, and align this with why we were a founding member of the IPA’s pitch positive pledge.
Thanks for reading this week’s debate. If you feel like joining in the conversation in the future, let me know: firstname.lastname@example.org