Only 40% of agencies have retained all of their clients during the pandemic

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Being one of the world’s largest creative communities, Creativepool is in a unique position to understand to what extent the creative industry is recovering from the COVID-19 outbreak.

We had the power to make a difference by asking about the impact of the coronavirus outbreak on businesses, employees and freelancers across the creative industries in the past year. We created two surveys and launched them as a follow-up to our first reportone for full-time employees and freelancers, one for business leaders from agencies, creative services, brands and creative companies. Both included a section for unemployed professionals.

This is one of a series of articles which will look at the impact of COVID-19 on the creative industries. This article will examine the effects of the lockdown on agencies and client retention. Here is what we found out.

Business Efficiency and Client Retention

Back in April, almost 90% of the industry was working from home. Though the numbers have slowly decreased over the past few months due to lighter restrictions, most business leaders have expressed interest in supporting remote and flexible working post-pandemic as well [Graph 1]. Though remote working isn’t new in the industry, this could usher in a new era for creative professionals all around the world, forcing even the most reserved workers to adopt remote working at least a few days a week. But how will this affect business efficiency and client retention?


Graph 1 - Business Leaders Survey

When we asked business leaders about office dynamics, over 50% replied that the office was shut down for the whole duration of the pandemic, and staff was either working from home or furloughed. Our data shows glimpses of a recovery, as nearly one-quarter of the respondents stated that they were now back in the office [Graph 2]. We can predict that such percentage is likely to drop again soon, as governments introduce new restrictions to tackle the second wave around the world.


Graph 2 - Business Leaders Survey

With less active staff, the pandemic was bound to take a toll on business productivity. Some 81.8% of the surveyed business leaders stated that they had no or less work during the pandemic [Graph 3]. This has had some consequences on client retention… Though not as many as one may think.


Graph 3 - Business Leaders Survey

Overall, most agencies around the world have been able to either maintain their current clients or attract some new ones. 40.2% of respondents have stated they have the same clients as before, and 12.8% have actually been able to attract more [Graph 4]. This overall leads to over half of our respondents being in the same or in a better situation as the beginning of the pandemic, at least in terms of client retention. Agencies cultivating long-term business relationships with their clients have overall been rewarded during this time.


Graph 4 - Business Leaders Survey

Budgets have not been as lucky. Over 60% of clients are currently spending less compared to the pre-pandemic levels of business, with little over 1 in 10 spending about the same [Graph 5]. COVID-19 restrictions and overall less work in the industry (especially due to the lack of live events and less production shoots in general) have put a strain on client spending, leading agencies to work on a much tighter budget.


Graph 5 - Business Leaders Survey

With this in mind, business productivity has been severely affected in over a quarter of the cases [Graph 6]. This will likely have long-term effects on the industry, but it does also mean that clients still value their business relationships and that the delicate skeleton holding the creative industries in place is still, relentlessly, working to hold together.


Graph 6 - Business Leaders Survey

Here are some comments from our respondents:

“Creatives thrive on company and feed off immediacy and bouncing ideas around. It has been tough across creative depts. Many clients retreated temporarily but almost all have emerged."
Creative Director, Creative Agency, Australia

“Being a business that relies on creativity and constant problem solving can be very wearing. Especially if your business model doesn't have a passive source of income, and constant bespoke projects have to be dished out to secure billing. Surviving the financial crisis of 2008 was very demanding, yet we survived without cutting jobs, but it took its toll. It is a very rewarding industry to work in, in terms of experience, diversity of clients and problems but very demanding in terms of maintaining the revenue and the spark. The economic track as well as the bleak outlook the pandemic carried has just made work so much more demanding.”
Managing Director, Design Studio, Portugal


How long will it take for agencies to get back on track? Some time ago, Imagination proved to us that flexibility is the best medicine against COVID-19, and that seeing disruption as an opportunity might be the key to maintaining a semblance of business-as-usual. Nonetheless, it will be a while before the industry is able to fully recover.

When asked about a timeframe in which they envisioned financial stability for their business, 44.7% answered that their business will need at least six month to get financially back on track. Over half of these stated they will need more than one year [Graph 7]. Almost the same numbers can be applied to clients [Graph 8]. It is worth noting, however, that over 30% of the respondents believe they will need less than 6 months to get back on track in both regards. Perhaps that means the industry is not in as bad of a state as most thought.


Graph 7 - Business Leaders Survey


Graph 8 - Business Leaders Survey

Because of that, most business leaders are keeping optimistic about the future of the industry. Over half believe that the creative industries will gradually improve, and 1 in 10 also believes it will grow stronger than pre-pandemic levels. Only a quarter stated that the industry may “get worse” [Graph 9].

Disruption is indeed being approached as an opportunity by some. These, we believe, will be the ones that the industry will reward the most, in the long run.


Graph 9 - Business Leaders Survey

Here are some comments from our respondents:

“I fell through the schemes being a sole Director of a Limited Company, so had no option but to furlough myself for my very low PAYE salary. Without this I would have received no help at all. Although I am getting this monthly payment it isn't really enough, especially as work still hasn't really picked back up 3 months on. I have however, been successful in receiving a Small Business Grant from Brighton & Hove Council - this has made me feel like the Council do care about my business and what I do for the local economy. This will definitely help my business during this time, but I still feel the Government need to do more for Sole Director/Limited Companies and include dividend payments within our salary for furlough.”
Director/Graphic Designer, Branding Agency, United Kingdom

“We have turned to public tenders and won ground there, reduced freelance work and done more in-house. We will have a slightly reduced head count but feel comparatively strong.”
Agency Director, PR/Marketing Agency, Sweden

Creativepool Coronavirus Survey Report – Part 2

Header image: Juice


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