Small and medium-sized companies are under more pressure than ever. They’re juggling competing to stay ahead, creating their brand, and delivering fantastic customer service, all on tight budgets and limited time. That’s why so many turn to the help of marketing agencies.
But there’s a catch: SMBs’ expectations have heightened.
We wanted to know exactly what small business owners expect from their agencies, and so we surveyed 500 business owners in a cross-section of industries across the U.S. This article summarizes some of the key highlights from the survey. For the full report, with deeper insights, tips, and valuable strategies, click here.
SMBs trust agencies, but loyalty is another matter
Here’s some encouraging news: more than half of SMBs (52%) still outsource their marketing to agencies. They understand the value of professional know-how. And best of all, small business owners utilizing marketing agencies are much more confident in their marketing plan than solo marketers. Agency clients averaged 9 out of 10 confidence when assessing their marketing, while DIY marketers only averaged 7 out of 10.
But – and that is a big but – that confidence is not necessarily followed by loyalty. Our research shows that 40% of SMBs who outsource their marketing churn. What’s particularly alarming? 56% of them churn within 6 to 12 months.
Here’s the bottom line: agencies do not have a lot of time to prove value, and those that are unable to display clear ROI immediately are truly at risk of losing clients.
It’s no longer merely about leads – SMBs require tangible results
Many small companies continue to outsource basic services like social media management, email marketing, and paid search. The problem is that they’re not always seeing the returns they envisioned.
When we asked SMBs what services they cancelled or stopped outsourcing in the past year, the top three were social media management, paid search advertising, and web development.
What this means is that there is a difference between what SMBs want and what agencies are currently producing. Agencies that will thrive are those that make SMBs able to connect the dots between lead generation and conversion, especially focusing on bottom-of-funnel tasks. And agencies shifting towards ongoing services (in contrast with one-time tasks like website development) will unlock more revenue streams and create stickier client relationships.
AI is an enormous opportunity
Something interesting to note is that 69% of SMBs indicate their agency provides AI tools, but many clients still don’t feel like they can truly use them well. SMBs just don’t have a clue on how to incorporate AI into their everyday activities.
This is where agencies come into their own. SMBs don’t need more tools, they’re already drowning in them. What they need are better, more integrated tools. Agencies that are able to integrate AI into existing processes naturally, craft custom solutions, and package everything under one umbrella will have a huge competitive advantage.
Our poll showed exactly what SMBs want to use AI to do:
- Create marketing material
- Answer client questions
- Create customized quotes and estimates
Those agencies that can embed such abilities into their services will be much better equipped to deliver for clients.
Value trumps all
Ultimately, what matters most to SMBs in 2025 is value. When we asked what are the key considerations in the choice of a marketing agency, “value for money” dominated the response.
What’s more is that “lack of perceived value” was the top reason SMBs churned as well. 60% of businesses that churned or cut back services with their agency in the past year said they didn’t feel like they were getting an adequate return on investment. That’s double what we saw in our 2023 survey, and it shows just how much harder it is for agencies to demonstrate their value.
It’s becoming increasingly clear that agencies can no longer merely offer services. They need to prove their value. For example, by simplifying lead capture and communication so SMBs are notified of each interaction, agencies are better positioned to facilitate conversions and measurably improve their clients’ businesses.
Marketing budgets are on the rise. So are expectations.
SMBs are still investing in marketing. Nearly half (49.6%) of surveyed businesses spend up to $3,000 monthly on outsourced marketing services, which is a significant jump from 36% in 2023. Even better, 43% expect their budgets to increase this year.
That is a golden moment for agencies, but it will be for only those that are able to rise to heightened expectations. Agencies who want to grow with their customers must prove they can not only get leads but help SMBs convert and retain those customers.
The first 6 months are make or break
Since more than half of SMB churn takes place within 6-12 months, those initial months are simply vital. Quick wins, open reporting, and value that can be touched and seen by SMBs must be prioritized by agencies.
One outstanding way is offering solutions for the entire customer lifecycle, rather than just lead generation. When we questioned SMBs about other tools that they would likely purchase from their agencies, online presence management, brand creation, reporting & analytics, and business management were the top four.
This illustrates to us that small businesses require tools to expand and make better decisions, not just market better. The agencies that take their services to include lead capture, nurturing, and conversion tools, as well as business staples like CRM, scheduling, and payments, will be making a savvy strategic move.
How agencies can stand out in 2025
As competition intensifies and fewer SMBs are outsourcing their marketing than in 2023 (partially because of ease-of-use AI tools), the agencies need to rethink their value proposition completely.
Agencies that will perform well this year will:
- Offer full-funnel services instead of mere lead capture
- Infuse AI tools that are genuinely easy to use and relevant to SMB processes
- Care as much about value and solving problems as about execution
- Deliver clear ROI metrics early and consistently
- Create end-to-end solutions for every client need in one place
This is where tools like inTandem can really make a difference. By offering agencies a white-label, AI-powered business application built for their SMB clients, they can provide their SMBs with immediate access to lead nurturing, conversion tools, communication functionality, scheduling, billing, and so much more. And the best part is that it’s all branded under the agency’s own name.
This not only helps agencies deliver value at the moment, but it also increases the degree of client engagement and provides native upselling opportunities.
SMBs understand what they require. Do you?
Small businesses are as clear as day regarding their goals: get more leads, establish their brand, and keep customers for longer. They also know which services matter most to them – social media, PPC, web design, and visual design – and will shell out money for experts to do the job.
But they will not stay if the value is unclear. The message to agencies is straightforward: show results, deliver real problems, and stay close to your customers.
Our 2025 SMB Marketing Report gives you the map to do that very thing.
