Accounting and financial services firms are missing a tremendous area of opportunity to gain a competitive edge and differentiate themselves by doing market research.
Conducting research provides unique market intelligence and information, allowing firms to adjust to changing conditions faster and spot emerging opportunities sooner, but less than 25% of accounting and financial services firms say they conduct any structured research on their target markets, according to Hinge Research Institute's 2024 High Growth Study Accounting & Financial Services Edition, which is due out later this month.
High-growth firms in other professional services sectors, on the other hand, are much more likely to do regular research. About one-third conduct research, and almost three out of five conduct research at least quarterly, according to Hinge's
The study outlines high-growth firms' approaches to marketing, talent, technology and strategy as they experienced a 35% median growth rate last year — 3.6 times greater than average-growth firms — and provides advice on how others can follow suit to achieve similar growth.
Hinge collected data from 242 accounting and financial services firms for its annual study. It defines "high growth" as firms with a minimum 20% compound annual growth rate over a three-year period. High-growth firms made up 36% of the study sample; "no-growth" firms (16%) are defined as those with zero or negative growth, and "average growth" firms comprise the remainder of the sample (48%).
Marketing
While high-growth firms were twice as profitable as no-growth firms last year, they actually spent less on marketing. The median marketing budget among high-growth firms dropped to 22%, down 2.5 points from the previous year. High-growth firms dedicated only 19% of their staff to marketing, while no-growth firms dedicated 28%.
Some of that differential could be attributed to outsourcing specialized marketing tasks — one of many common threads connecting high-growth firms. Strategically outsourcing certain tasks to experts is often more affordable and effective than dedicated in-house teams. Some of the most outsourced tasks included website improvements (61%), SEO (41%) and graphic design (34%). Outsourcing PR was also substantially higher among high-growth firms (26%), compared to no-growth firms (3%).
The most impactful marketing technique among high-growth firms was providing assessments and consultations — a "bottom-of-the-funnel activity in which marketing supports the business development function," according to the study.
Four techniques tied as the second most impactful: conducting and publishing original research, speaking at targeted conferences or events, producing business development materials, and networking at industry events.
Talent
High-growth firms are not immune to the talent shortage, though they may be winning in the war for talent, albeit minimally. Nearly one-third of high-growth firms say they have been able to hire at a normal rate, versus 22% of no-growth firms. But by their nature, high-growth firms need to continually add new talent, and 30% say they are in need of new talent but are struggling to recruit. That figure is on par with no-growth firms at 31%.
One way high-growth firms hold their edge is by taking some of the recruiting efforts into their own hands. Rather than relying on a recruiter to identify new talent, these firms make posts to sites like LinkedIn, job boards and social media. Accounting firms should try posting to industry-specific sites like AccountingJobsToday.com or Accounting Crossing.
High-growth firms also report greater workplace satisfaction. These firms invest more in nurturing work culture and take mental health more seriously. Nearly one-third of high-growth firms say they make mental health resources available to employees, while only 3% of no-growth firms say the same.
A simple way that nearly 40% of high-growth firms promote wellbeing is by encouraging employees to engage in physical activity, like taking walking meetings or taking time off to decompress.
Technology
High-growth firms rely on diverse operational and marketing tech stacks to help in areas like accounting and financial management, time and expense tracking, customer relationship management, and business process and workflow.
But for other firms looking to expand their own tech stacks, it's not enough to just buy the software, the study says: Firms have to take the time to fully implement new technology, deploy its advanced features, and train their employees to make the most of the available tools.
High-growth firms also rigorously track marketing and business development metrics with a wider variety of methods. One in three high-growth firms report high confidence in tracking metrics, while only 14% of no-growth firms say the same.
"Data is like X-ray vision. It lets you see what's actually happening in your organization," according to the study. "If you aren't tracking key metrics you are likely running blind and making decisions based on intuition or anecdotal evidence"
These firms are tracking page visitors and followers on social media, using historical data to set goals and website analytics to score leads. High-growth firms get more leads (29%) from digital sources — like web forums, content marketing and social media — than no-growth firms (23%).
Despite their superior performance, high-growth firms face the same macroeconomic and environmental challenges as average-growth and no-growth firms. High-growth firms say they are most worried by the rise of automation and artificial intelligence, followed by increased competition, and the talent shortage. But the forward-looking perspectives with which they approach these problems allow them to grow three times faster than average and be twice as profitable.
The 2024 High Growth Study is due to be published in the last week of March on hingemarketing.com.
