What SMBs Really Want from Their Marketing Agencies — And Why AI is Part of It
Why Business Expectations for Marketing Agencies Are Changing
Small and medium businesses (SMBs) have traditionally depended on marketing agencies to generate leads and promote their services. Lead delivery used to be the main focus. However, with new technologies and the rise of AI, SMBs are raising their expectations. Leads alone no longer cut it.
SMBs now want agencies to act as strategic partners who understand their business deeply and deliver real results faster. A recent survey by vcita shows that while over half of SMBs outsource marketing, nearly 40% end up ending those agency relationships—most within the first year.
With tighter budgets and greater pressure to perform, SMBs are scrutinizing every dollar spent, especially in uncertain economic conditions. Agencies need to shift their approach to meet these rising demands.
The Value Dealbreaker
“Value for money” tops the list of what SMBs look for when choosing an agency. Nearly two-thirds of SMBs who ended relationships did so because they didn’t feel the agency delivered enough value. It’s not just about leads—the value must translate into deals won and revenue generated.
Agencies must treat the first six months as a “prove it” phase, focusing on clear communication, defined KPIs, and proactive reporting. Success means more than running campaigns; it requires helping SMBs convert leads into paying customers effectively.
The AI Expectations Gap
The rise of AI is a major factor in shifting SMB expectations. Nearly 69% of SMBs say their agency already offers AI tools, and among those that don’t, 60% wish they did. AI isn’t just a buzzword; it can boost efficiency, enable personalization, and help SMBs compete more effectively.
SMBs want AI tools that save time and improve consistency in content creation, speed up customer responses, and personalize sales estimates. Agencies that adopt AI will streamline their operations and increase their strategic value. Those that don’t risk falling behind.
From Vendor to Advisor: Redefining the Agency Role
Agencies must change their mindset from being hired hands to becoming growth partners. Reducing client churn means offering strategic guidance, not just executing campaigns. Agencies that explain why a campaign works and how to improve ROI will build stronger client relationships.
This shift requires agencies to expand services into analytics, reporting, brand development, and business management. AI plays a key role by enabling smarter insights and scalable personalization. Agencies should act as coaches—guiding SMBs through strategy, turning data into action, and aligning efforts with broader business goals.
Opportunity Lies Ahead
Challenges for agencies also open doors to growth. Nearly 43% of SMBs plan to increase their marketing budgets next year, focusing on social media management, paid search, and email marketing—areas well-suited for AI enhancement.
Additionally, SMBs are interested in services like online presence optimization, brand development, and business management tools. Agencies that expand into these areas can capture more value and deepen client ties.
Strategic Acumen + Tech-Savvy = Retention
The key to client retention in 2025 is a mix of clear value, genuine partnership, and smart innovation. SMBs want agencies that offer a broad, integrated relationship—not just one-off services.
Agencies that meet this demand will not only reduce churn but become essential allies in their clients’ growth. Building trust through strategic insight and AI-powered tools is the path to long-term success.
For marketing professionals in hospitality and events, embracing these changes is crucial. Leveraging AI tools and positioning your agency as a strategic advisor can lead to stronger client relationships and measurable business outcomes.
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