In the face of increased competition, downward price pressure, and changes in how clients buy services, high-growth professional firms grew their revenue five times faster than the average firm, according to new research by the Hinge Research Institute. More than 1,000 firms in all professions (including law) with revenue of $1 million to $50 million participated.
"And they're not just small- or mid-sized businesses, either. In this year's High-Growth Study, we saw rapid growth at every level. By comparing your firm's marketing practices to those of high performers, you can start modeling your marketing program on the fastest-growing firms in the world," the report says.
The research pinpointed the firms that experienced 20% revenue growth in one year. These high-growth firms were analyzed to extract the 5 hallmarks of high-growth firms.
1. Differentiation is the top marketing priority of high-growth firms. "If a professional services firm can separate its business from the competition it can win more business and avoid competing on price."
Differentiation can be achieved in many ways:
- Build your website around the practice area that generates the most revenue. Too many law firms try to be ‘full service' law firms, but in practice, most firms focus on one or two practice areas, in which their lawyers are especially experienced, known for, and successful. If you mainly want to attract leads for these areas then it makes sense to optimize your website around these services, rather than other less important or profitable ones.
- Actively gather feedback, reviews, and testimonials to find out why clients hire your law firm.
- Demonstrate your success by presenting case histories online, describing a client's situation, the obstacle they face and how your firm made the difference.
- Showcase your work to benefit the community. "If you haven't yet taken advantage of sponsoring a local event, helping a charity, or even providing a scholarship, now may be the time to start," blogger Calin Yablonski recommends.
2. High-growth firms invest more in marketing. High-growth law firms had a median marketing budget of 5% of annual revenues. The average law firm spends only 2.5% on marketing.
3. High-growth firms have experts skilled in business development. Experts within high-growth firms were highly skilled at networking face-to-face, making slide resentations, speaking on webinars, writing blog posts, and networking.
4. More than one-third of high growth firms experienced a merger or acquisition in 2018. "More and more, professional services firms are pursuing mergers and acquisitions as a primary growth strategy. Nearly 38% of high-growth firms grew via M&A in 2018, compared to less than 23% of no-growth firms."
5. High-growth firms target clients on both digital and traditional channels. "We noticed that the average marketing mix of high-growth professional services firms is balanced, with half focused on traditional channels such as speaking engagements and networking events, and the other half focused on digital channels such as SEO and social media. As a result, high-growth firms are able to reach their target clients in all the right places," the report said.
The top digital techniques used by high-growth firms are email marketing (50.5%), Keyword research and SEO (43.7%), Blogging (43.7%), social media marketing (42.7%) ad case studies (2%).
The top traditional marketing techniques were networking at targeted events (52.4%), sponsoring conferences or events (51.5%), speaking at targeted events (51.5%), using branded marketing materials (49.5%), and providing assessments or consultations (35.9%).
For more, download the 2019 High Growth Study.