News

Agencies favour human-connected approach over digital outreach in race to win new business [REPORT]

29th February 2024

The human touch has returned as a top prospecting priority due to digital lead generation marketing automation overload, a major new survey of UK new business and agency leaders has revealed.

The seventh annual UK New Business Barometer by specialist new business consultancy jfdi and strategic insight agency Opinium found that 88% of respondents used management connections to prospect, with 44% citing this a top strategy.

Another 68% said they asked clients for referrals and 67% formed alliances and partnerships. The report said the change is likely driven by email overload and an explosion of pushed content in an over-supplied agency market.

Camilla Honey, CEO at jfdi, said:

“In our challenging new business market, competitive edge is everything and it’s interesting to see the human touch is overriding overwhelming digitally-based automated approaches. AI watch out!”

Winning and losing pitches

The survey, which included responses by several Bristol Creative Industries members, also found that ideas that deliver, are practical and affordable are winning pitches. Ir revealed that in the current difficult economic environment, the proportion of respondents saying they commonly win projects because of ideas that are deliverable, practical and affordable rose eight points to 33%.

Another trend highlighted by the study was that only around 50% of the ideas and recommendations presented in pitches are executed, which jfdi said confirmed winning pitches requires more than answering the brief.

When asked about the reasons for winning pitches, 73% said relevant and expertise was important, a figure that was 6% up on last year. Another 69% said it was due to good chemistry.

For unsuccessful pitches, more than two fifths (43%) of respondents reported client withdrawal of budget as the most common reason for not winning a pitch. This was up up 10% on the 2023 study despite having been broadly stable for the past six years.

Other reasons include “rarely given a reason” (41%), “economic uncertainty”, (33%); “ideas not deemed affordable” (20%), and “agencies failed to demonstrate relevant expertise/capability” (18%).

The cost of losing pitches escalates exponentially by size of agency, the study revealed, with every agency spends more annually on losing pitches than they do on winning ones.

The report showed small agencies are spending on average £86,000, medium agencies spending £350,000, and large agencies are spending £1.4m on losing pitches.

“This shows how a marginal gain in conversion can feed down to the bottom line with more budget available to spend elsewhere in the business,” the study said.

‘Ticking stress time bomb’

The study warned of a “ticking stress bomb”, with 70% of new business practitioners reporting their role becoming more stressful over the last 12 months. The report said “this worrying trend signals the need to ensure mental health welfare and wellbeing in this space”.

Josh Glendinning, research director and partner at Opinium, said:

“The New Business Barometer’s unparalleled insight shows how the pressures of a tough economic environment are cascading through the marketing industry. Clients are demanding more than ever during the pitch process but finding it more difficult to provide concrete assurances to agencies that work will be commissioned.”

Other findings

Additional findings in the report included:

  • New business revenue targets for large and medium agencies dropped by -17% and -7% respectively during the past year. Large agencies saw a massive dip in 2020 and again in 2023 which the report said indicates that large agencies are less resilient in difficult markets. Conversely, targets for small agencies rose by 9% year-on-year.
  • Pitch conversion has dropped for large, medium and small agencies, a trend seen since 2021. Large and small agencies are converting at the lowest rates since the survey began. Both have seen an increase in number of opportunities pursued which potentially stretched pitch capabilities and resources and is now showing diminishing returns.
  • “Client is king”: The report said: “With changing complexity at the heart driven by factors including: the client community is under increasing pressure to deliver short-term conversion and long-term equity, leaning harder into agency partners to help navigate newly emerging technologies, fast-changing consumer demands and explosion of new places and spaces.

For a full summary of the report, email [email protected]

Advice related to the report’s findings

Don’t lose sight of your new business pipeline

10 top tips for getting the pitch over the line

How to prospect for new business without losing your soul

How creative businesses can write the perfect positioning statement

Mental health in the workplace: Why we need a culture change

Podcast: Wellbeing tips for small agency owners

Mental health for agency owners

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About Bristol Creative Industries

Bristol Creative Industries is the membership network that supports the region's creative sector to learn, grow and connect, driven by the common belief that we can achieve more collectively than alone. 

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