Even before the pandemic hit, many of my agency clients expected some form of an economic downturn in 2020. This prediction became reality when the U.S. fell into a formal recession and the economy contracted at a 32.9% annualized rate for three months.
In the Agency Edge research we conducted in 2020, we asked 1,000 agency clients how they were responding to COVID-19. Participants’ marketing budgets varied across the board, ranging from under $250,000 to as much as $20 million, and some respondents’ annual revenue reached $500 million. They worked in both B2B and B2C organizations across several industries, and the study had a 3% margin of error with a 95% confidence rate.
While the goal was to learn about our agency clients’ responses to the coronavirus pandemic, we were able to gain some insights that can help other companies with their B2B relationships. With 2020 bringing countless changes to almost all industries, clients are looking toward the future — and their attitudes often determine how they’ll approach it. Here are the three types of respondents we identified and what their outlooks mean for their future plans:
Although distressed respondents are hesitant to buy anything, both pragmatic and steadfast respondents plan to increase their spending on marketing initiatives. Over 30% will increase spend on social media marketing, and 29% will spend more on online advertising. Fewer say they will increase spending on events, programmatic media buying, travel, and content development.
As we approach 2021, it’ll be key to understand how your clients might fit into one of these categories and then tailor your work to reflect an understanding of their perspectives and needs. Here are three key ways to connect with each type of client:
1. Be a partner for distressed clients. These clients are deeply concerned about the economic recession and the future of their businesses, and they’re eager to save as much money as possible and minimize risks to prepare for what lies ahead. That said, remember to highlight their budget efficiencies and suggest changes or reductions if necessary. When discussing cutbacks, show them what the long-term and short-term impacts would be and provide results in a format that can be easily shared with executives. If you suggest new strategies, prepare relevant evidence and data to justify your suggestions and point to similar companies who are thriving during this time as examples of how your strategic ideas can bolster their business.
2. Help pragmatic clients seize new opportunities. Because pragmatic clients view the economic recession as a normal period in the economic cycle, they hope to seize new opportunities during this time. The stage is set for you to bring them bold, new ideas. Keep in mind that they’ll likely pressure you to lower costs, so it’s important to justify their expenses and thoroughly document any changes being made or proposed. If you can, lower your prices to accommodate these clients or negotiate to the best of your ability. Feature your past successes to encourage them to buy more services, highlight your progress, and showcase small victories throughout the year.
3. Remain dependable for steadfast clients. Steadfast clients are savvy, so you need to be, too. Arm them with statistics, news, data, and the most current information on trends to help them get through the economic recession. Their major focus is to stay the course, and they’ll depend on vendors and partners to help them do that. Don’t expect huge changes from these clients, knowing that they prioritize consistency. On that note, make sure they’re working with the same team members over time and communicate with them as frequently as possible. Incorporate regular strategy sessions to help them plan for the future, and if you can, help them identify spending efficiencies in their budgets.
The first step to adequately serving your clients during an economic downturn is understanding who they are and how they will handle uncertainty. Do you know which categories your clients fit in? Download the Agency Management Institute’s 2020 study to gain more insight into these crucial client behaviors and provide personalized, stellar service.