How high-growth accounting firms are outperforming their competitors
By Lee Frederiksen, Ph.D.
July 10, 2019
At first glance, it may seem like some accounting firms have a secret sauce that allows for continued growth, regardless of how the industry changes. Even amid changing buyer behavior, recruitment and retention challenges, and technology advances that move faster than marketing departments can keep up, these firms remain at the top of their game.
Even more surprising is that the designation of “fast growing” isn’t just reserved for small or midsized firms; instead, rapid growth occurs at all sizes and levels. And these firms aren’t just sustaining consistent growth — they’re growing at a rate five times faster than the average professional services firm. What’s their secret?
Well, while there may not be a magical “sauce” that leads to instant growth, our research has discovered a few common threads that lead to high growth for accounting firms.
Here are five habits that contribute to high growth firms outperforming their competitors.
Making differentiation a top priority
One of the primary — and most successful — strategies high-growth firms employ to win more business is differentiating their brand and services. In fact, accounting firms that discover how to set their services apart from the competition are more likely to win new business based on other distinguishing factors than price. By developing firm differentiators that position your firm differently than your competitors, you can establish a brand differentiation strategy that creates opportunities for more targeting marketing.
Differentiators can be drawn from various factors about your firm but should always have three essential qualities: They must be true, they must be relevant to the interests of your clients and they must be provable. Often, some research into your target client group will reveal your best differentiators.
Investing more in marketing
Further, high-growth accounting firms also tend to have bigger marketing budgets. Our research revealed that high-growth firms invest an average of 5% of annual revenue back into their marketing, while average-growth and no-growth firms only invest an average of 3%. This difference is especially evident among firms that offer advisory services, which generally need to — and most often do — invest more in marketing.
Because marketing is a broad term, let’s also look at the types of smart marketing high-growth firms invest in. In comparison to no-growth firms, high-growth firms are three times more likely to invest in webinars and publish original research. High-growth firms also tend to be active in publishing guest blog posts, averaging around two per month.
Balancing traditional and digital marketing
Of course, we all know successful marketing requires reaching your target audience where they are. Because of this, high-growth firms are more likely to strike a balance between traditional and digital marketing. By combining traditional efforts — like speaking engagements and networking events — with digital efforts — like email marketing, SEO and blogging — high-growth firms can connect with their target audience across a variety of channels.
However, beyond simply finding the right channels to reach your audience, it’s also critical that marketing messages resonate clearly and provide consistent value. If your marketing messages are falling flat, it won’t matter how right you get the balance between traditional and digital marketing.
Making expertise visible
Clients want to work with the best, and one key habit of high-growth accounting firms is showcasing the expertise of talented team members. Considered recognizable thought leaders in their field, these
Visible Experts are specifically sought out for their expertise and serve as differentiators for their firm. While Visible Experts can’t be created overnight, high-growth firms are more likely to put in the work required to build expertise. Research revealed they were 65% more likely to pursue strategic marketing partnerships with other organizations and twice as likely to have subject-matter experts appear on podcasts.
Leveraging M&A
While most firm growth (83%) still comes from the organic avenues, pursuing mergers and acquisitions has become a popular growth strategy for accounting firms in recent years.
Hinge’s recent High Growth Study found that high-growth firms were 67% more likely to leverage M&A than slower growth firms. By acquiring smaller firms with complementary services and valuable talent, firms can expand their offerings and acquire new clients.
However, it is important to note that leveraging M&A as a growth strategy can lead to brand cohesion issues, so make sure your firm is prepared to handle the marketing challenges. Understanding synergies and identifying conflict will be crucial to maintain branding consistency; otherwise, firms that engaged in M&A as a growth strategy may end up weakening their brand and facing bigger challenges in the future.
More than sauce
When combined, these five common habits of high-growth firms are more than just a secret sauce — they’re an intentional, strategic approach. By learning from the practices of these top-performing firms, fast growth can become a reality for any firm of any size.
Lee Frederiksen is the managing parter at Hinge, a strategy, branding and marketing agency for professional services firms. You may read more of his articles at hingemarketing.com or contact him at lfrederiksen@hingemarketing.com.
