The accounting industry – like many professional services industries – is evolving rapidly as markets and technologies change and client needs change with them. Implementing an effective marketing strategy in such a dynamic environment can be daunting and requires foresight, planning and discipline.
The 2019 Marketing Budget Benchmark Study, conducted by The Hinge Research Institute and the Association for Accounting Marketing (AAM), analyzed the marketing strategies of a wide range of accounting firms and reveal what enabled high-growth firms to generate significantly greater revenue than the rest of the field. The results were astonishing: high-growth accounting firms GREW NEARLY 10X FASTER than their low-growth counterparts, generating nearly $1 million more revenue per equity partner. What could account for such a significant difference in performance? More on that in a minute.
The study focuses primarily on two segments: the overall study population, and high-growth firms, which grew at a significantly higher rate than their peers. The purpose for dividing the study into these two groups was to determine what high-growth firms do differently that enables them to grow faster and more sustainably than average accounting firms.
Our joint team examined the marketing budgets of 100 accounting firms representing a combined $3 billion in annual revenues. Annual revenues of firms in the study ranged from under $200,000 to over $900 million. The average firm generated over $45 million per year across six offices, 21 equity partners and 246 full-time employees. The average firm’s marketing team consisted of five professionals with an average salary of more than $68,000.
Target Audience Education -- High-Growth Firms’ Secret Sauce for Success
According to our research, marketing directors in high-growth firms understand the importance of educating their target audience. To that end, they allocated 40 percent more of their marketing budgets to content creation and a remarkable 6X more to educational events, including both in-person events and webinars. In addition, high-growth marketing directors recommend increasing budget for internal education next year than raising compensation.
High-growth firms spent nearly 42 percent more of their marketing budget on digital marketing
than their low-growth counterparts, who spent more of their budget on other expenses, such as discretionary partner funds and firm events and parties. Some additional key differences in the high-growth firms’ approach include having more marketing talent on staff, employing nearly twice as many marketing team members than low-growth firms, and offering more ancillary advisory and information-security services than lower-performing firms.
Better Focus Means Better Performance
Focusing your firm’s marketing strategy is fundamental to becoming a high-growth firm. A carefully-thought-out, comprehensive marketing plan will identify a target market and audience, explain how the firm will reach and attract prospects, and the tools it will use to convert those prospects into clients. All of this takes focus, effort, and careful consideration.
The most successful accounting firms approach this task methodically, documenting each year’s strategy in a marketing plan and budget and benchmarking their efforts. A systematic, data-driven approach delivers a solid plan based on strategic business goals and an informed understanding of the firm’s relevant target client groups and their needs. As the plan is implemented, track and analyze results to enable your team to adjust the marketing program as needed to optimize performance. Optimizing your marketing plan throughout the year will help you eliminate inefficiencies and unproductive elements, maximizing effectiveness. The result? A turbo-charged marketing program that can turn a low-growth accounting practice into a high-growth firm.
Disciplined strategic marketing planning like this requires some effort and research, but the extra work will result in a better understanding of your target audience and what they want and need. That enables you to develop the most efficient and effective ways to reach and influence them. And that, in turn, yields more clients, more revenue, and more growth.
Lee W. Frederiksen, PhD, is managing partner at Hinge, a marketing firm that specializes in branding and marketing for professional services. Hinge conducts groundbreaking research into high-growth firms and offers a complete suite of services for firms that want to...