The Hinge Research Institute recently published the 2024 edition of its signature research report, the High Growth Study.
This global study conducted annually examines the characteristics and performance of professional service firms across six industries.
In this article, I will be discussing the key takeaways from the study focusing on the 5 Advantages of high growth firms and the implications that they have for Small and Medium B2B Professional Service Firms—particularly Accounting, Technology and Law firms.
What Is a High Growth Firm?
In this study, a high growth firm is defined as those with a minimum of 20% compounded annual growth rate over a 3-year period. When comparing these firms to those that have little to no growth, specific strategies and practices have been identified that are associated with higher growth and profitability.
The Performance of High Growth Firms
This year’s study has found that high growth firm firms grew at an average rate of 41% (up from 32% in the 2023 study) compared to average growth firms which continued to grow at an average rate of 10%.
In terms of profitability, high growth firms experience an average profit of 25%-similar to last year.
The Number 1 Challenge of Professional Service Firms
For the second year in a row, the number one challenge of more than 42% of professional service firms continues to be marketplace uncertainty. This is likely the result of numerous external factors occurring including increased competition, volatile industry and economic conditions.
Implication for SMB Firms
Having a mechanism within your firm to ‘listen to the market’ regularly-at least quarterly is critical to enable your firm to pre-empt, understand and respond to market dynamics.
What Makes High Growth Firms Successful?
The study has found that high growth firms are able to generate strong growth and profitability as a result of the advantages they have been able to achieve through undertaking strategies and practices in 5 key areas.
Advantage 1: Business Development
High growth firms undertake the following activities all of which are aimed at educating clients and prospects, deepening engagement and converting opportunities:
- Providing assessments and consultations
- Speaking at targeted events or conferences
- Conducting and publishing original research
- Live product/Service demonstrations
- Preparing proposals and presentations
Implications for SME B2B Firms:
- Your firm’s business development efforts must be Buyer (i.e. Decision-maker driven) and focused on delivering “A-I-R” –Advice, Insights and Recommendations to the key priorities, challenges and objectives of your firm’s target decision makers
- Conducting research regarding your clients’ or prospects industries, market trends and customers is a highly effective means of demonstrating your firm’s expertise and delivering the “A-I-R” that your target buyers are looking for!
- How to Leverage Research in your Business Development—A Quick Example
- Prepare a short report on key trends and developments in a target industry
- Distribute this report widely via email, social media, relevant industry associations, publications
- Host a ‘micro-event’ such as a roundtable or executive breakfast briefing where you invite buyers/decision-makers from your key clients and prospects to discuss the findings and share perspectives
- Consider partnering to undertake one or more of the above 3 steps. Potential partners include clients, other professional service firms, peer, business groups or associations
To learn how to leverage content, events and partners for your firm’s business development strategy, get your Go-to-Market Strategy Playbook for Small and Medium B2B Professional Service Firms.
Advantage 2: Marketing
The study found that creating content is the number 1 marketing priority of 37% of high growth firms.
Implications for SME Firms
- Create Buyer ”A-I-R” Driven Content that again provides Advice Insights and Recommendations to the priorities, challenges and objectives of decision-makers (and those influencing decisions) within your key clients and prospects
- Remember that Content Strategy has two components:
- Content Creation:
- Create content that is Buyer-Driven providing “A-I-R”
- Consider different formats such as articles, videos, assessments, podcasts, LiveStreams-based on your target buyers’ preferences
- Content Distribution
- **BE VISIBLE!!!!
- Be Seen where and with whom your buyers regard as TRUSTED sources to get “A-I-R” they seek.
- Think beyond your firm’s email (database), website and SEO. Buyers are now asking WHO can help solve their problems and are tapping into their networks and ecosystems that surround them.
- Identify the trusted 3rd parties that your buyers will likely use
- Examples of such 3rd party to Whom Buyers seek “A-I-R” include:
- Associations
- Groups
- Industry Experts
- Peers
- Publishing Platforms such as Medium, Quora
- **BE VISIBLE!!!!
- Content Creation:
For further details about leveraging content to drive the growth of your firm, check out my article 3 Ways to Grow Your Professional Services Firm.
Advantage 3: Strategy
High growth firms conduct research more research, more frequently.
35% of high growth firms conduct formal research with almost 60% conducting research at least quarterly
Conducting research need not be an expensive exercise and is a great way to demonstrate your firm’s expertise, deliver “A-I-R” and standout.
Often the research can be done leveraging your internal resources. You may also want to consider undertaking the research with a partner such as with other professional service firms, clients and/or strategic partners.
Implications for SME B2B Firms:
- Be sure to have an in-depth and current understanding of your target buyers’ key priorities, challenges and objectives as they can provide the focus and direction of the research. The way to gain this insight is to TALK TO YOUR BUYERS. Conducting structured meetings/interviews with your buyers is one great way to really understand their requirements, challenges and hence where buyers are seeking “A-I-R”
- Sample topic areas for your research include:
- Insights from interviewing your key clients, strategic partners and/or industry experts
- Industry trends and drives
- New technologies and innovations
- Best practices
Advantage 4: Talent
The study has revealed that high growth firms:
- Conduct weekly status meetings to review company performance, discuss priorities and recognize and appreciate individuals’ contributions
- Share access to key company performance metrics and data such as revenues, sales pipeline and profitability
Implications for SME B2B Firms
Core functional teams that are integral to client acquisition, client retention and expansion such as Marketing, Business Development, Client Delivery, Service and Support need to be WORKING TOGETHER (not simply aligned!), regularly communicating sharing insights and ideas.
Consider mechanisms that can be used to focus this including regularly scheduled meetings and briefings, establishing a central repository to collate and share data and insights.
Advantage 5 Technology
High growth firms use Accounting, CRM, Time Tracking, Project Management Software and Business Process Workflow solutions
Implications for SME B2B Firms
Implementing the right tools for your firm is critical to managing the complexity and numerous activities involved with acquiring, maintaining and managing clients and growing the firm.
Get the right tools and use them to:
- Manage clients and prospects
- Business Processes
- Finances
- Key projects and initiatives
Need help in creating these advantages within your firm to drive growth? Let’s have a chat.
