Survey: Agencies Using Automation Tech to Combat SMB Churn

As Greg Sterling pointed out on the LSA Insider blog earlier this year, customer churn remains a “persistent and widespread problem” for local search agencies, especially those serving small and medium sized businesses (SMBs). Sterling also shared some data from Google suggesting that about half of this churn among SMBs is simply unavoidable.

So how and what are agencies doing to reduce client churn? Churn control strategies were among one of the questions Kenshoo posed in a recent TechValidate survey of agencies who manage campaigns with Kenshoo.

Nearly one out of every three (31%) of the 200 survey respondents identified as “SMB agency,” representing the largest segment in the study. Of these agencies, more than half (51%) ranked “reducing churn rate” among their top business priorities. In addition, 75% of the survey respondents either agreed or strongly agreed that their campaign management technology has enabled their organization to significantly reduce customer churn.

How does technology help reduce client churn?

At least 75% of agencies surveyed cited improved campaign performance for cost per action (CPA), cost per lead (CPL) and other specific key performance indicators (KPIs) as primary drivers to improving the health of their paid search initiatives. Other motivators included:

  • Automating ongoing budget management tasks, which 57% of agencies rated as a top priority
  • Easily accessing and delivering customizable reports, which was a pressing need of more than half (55%) of the respondents
  • Increasing overall revenue for SMB clients, which was high on the list of 51% of the respondents

In the near term, two out of every three (61%) of the agencies plan to focus on reporting automation as a key focus area, while bidding-based on rules was also high on the list for 57% of the respondents.

When polled about their greatest challenges in search engine marketing (SEM), more than two-thirds (67%) of the agencies said bid and budget management was a leading concern, followed closely by reporting (65%). Nearly half (46%) identified monitoring and managing mass accounts as a key challenge to success, while only 18% said training new employees was an issue.

Questioned about specific areas where they’ve realized significant time savings since onboarding a campaign management technology, 71% of the agencies named automating bid management. Other gains were achieved in:

  • Utilizing reporting functionality, which was a timesaver for nearly two out of three (60%) of the agencies
  • Automating budget management, which saved time for almost half (47%) of the agencies
  • Cross-channel management, which helped 36% of respondents save time

Automation driving progress

Agencies are increasingly using automation technology to sail past the avoidable issues of client churn. In fact, more than three out of four (78%) of the surveyed respondents either agreed or strongly agreed that campaign management technology has helped their organization scale, grow and be more competitive due to automation.

Ultimately, the survey results confirm that by automating routine and time-consuming tasks, agencies can focus on what really matters for their paid search business, like optimizing for high-value actions, improving customer service, upselling to additional services, and adding new publishers to their product mix.

One Response to “Survey: Agencies Using Automation Tech to Combat SMB Churn”

  1. Nice article Tiffany! Although agencies are taking a step in the right direction leveraging automation to reduce cost for them and their clients , I see service being equally or more of a culprit for agency client churn. First, agencies assign too many accounts to account managers essentially limiting interaction. Client’s don’t receive consistent responses to correspondence and are left feeling avoided. In addition, programs are too cookie cutter and have many restrictions in play to protect margins. These programs may sound good in the beginning but leave SMB’s feeling like they’re not important or that their budget isn’t substantial enough to matter. Advertisers also don’t like it when campaign performance is unacceptable, yet they have to continue the strategy until a certain date before changing it. Agencies want to limit strategy updates but the S in SMB only suffers. I get it some clients want to constantly flip strategies which can be costly but if an agency’s strategy isn’t working that’s a problem the agency should resolve immediately. Lastly, it adds fuel to the churn fire when an agency takes weeks to make adjustments when only minutes or hours are required to execute. Budgets are already stretched for SMB’s and the high-churn shows fancy features don’t really matter most; it’s about results. Certified SMB’s partners either need to get it together or SMB’s need to think beyond awards and partner with those who have their best interest. Automation can be beneficial but the human element remains the reason for churn in my experience.

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