In the tough but vibrant world of independent agencies it can be hard to keep a foot in the door, but consulting over 80 agencies, group Agency Hackers has produced a report detailing just how tough clients, recruitment and more are becoming.
Some 65% of agencies have reported longer sales pipelines compared with the previous year, and client retention rate has been slipping in the same time frame (82% to 78%).
The average time taken to settle a new client is 3.2 months, and 55% of agencies report increased requests for shorter contracts or project based work.
More for less: dealing with clients
“Clients were negotiating harder on fees and requesting payment terms that placed more risk on the agency,” said Time 54’s Chris Ashton.
Orchard PR’s Brooke Kenyon added: “Clients are more hesitant than ever to commit to long term contracts. Nowadays they prefer shorter engagements to hedge their bets against potential economic downturns.”
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RT7’s Russell Ball said: “We’ve spent a lot of time educating our clients about the value of the services we provide,” he explains. “It’s helped them understand what we do better, and as a result, they’re more appreciative and committed to our work.”
Agencies have also faced the consequence of clients ghosting, and it has shaped how they respond to clients.
“A lot of times people are asking for pitches when you know damn well you’re not going to get anywhere. They’ve already decided they just need to pitch against their actual favourite agency,” said Ball.
Recruiting challenges
Agencies are also facing challenges in retaining skilled talent, especially for specialised digital and tech roles.
“We’ve got work coming in, but we’re struggling to scale fast enough because finding the right people has been a real challenge,” echoes Time54’s Chris Ashton.
“The need for so many specialised roles is a thing of the past. The old software was
so complicated you needed to hire experts,” said Wix Studio head of marketing tech design Matayna Dayfani.
“But when we recruit now, we are looking for young, curious people with foundational skills in multiple areas. With so many capabilities built into modern platforms, it’s much easier for a person to produce high-quality work,” she continues
“The challenge then becomes how you support their growth and mold them into the talent that you need. They don’t need to come to us fully formed— we see it as our responsibility to create the future talent for the web design world.”
