One of the best places to get answers to those questions is the just-released edition of our pioneering study of professional services buyers and sellers called Inside the Buyer’s Brain, Fourth Edition: Accounting & Financial Services.

About the Research

At the Hinge Research Institute, we’ve studied more than 40,000 buyers and sellers over the past decade—giving us unparalleled insight into the professional services industry.

Our most recent study of the accounting and financial services industry explores the perspectives of more than 900 buyers and 500 sellers and examines their perspectives across on the following topics:

• How well do accounting and financial services sellers really know their buyers?
• What are buyers’ key business challenges?
• How do clients feel about their service providers?
• How do buyers search for service providers?
• How do buyers evaluate service providers?
• How do buyers make their final selection?

Here are four key insights that came out of our report.

Finding #1: Relevancy ratings have risen to an all-time high—but there is plenty of room to grow

Relevancy for accounting and financial services is at an all-time high. And although that is excellent news, other industries have attained even higher thresholds. This rise may be partially attributed to pandemic-related needs, but now is a great time to lean into that advisory role and clearly communicate your expertise, experience, skills, and services. Don’t assume that your clients understand your full depth of services. Demonstrate ways that you’re more relevant to solving issues, compared to your competitors.

We see that sentiment reflected in “poor customer service,” which is up 142% since 2020—and in “inexperienced, incompetent staff,” which has had an even more dramatic increase of 249%. First, look to mitigate those combined issues with better training and development programs for your staff. Equally as important, make sure you’re communicating in ways that let buyers know that you are highly attuned to those specific concerns. Talk openly about how you handle client service, how staff are trained, longevity of your staff – all things that communicate the stability of the client experience and your ability to deliver quality services.

Another takeaway is the importance of industry knowledge. During the business development process, be sure to talk about your team’s relevant expertise and support it with freely available thought leadership that you make available online.

All of these metrics relate back to a desire to reduce risk. Buyers are asking: Do you get me? Do you understand my needs? Are you going to get the job done? Do you have the people in place? Are staff going to be there when I need them?

Watch the on-demand webinar: Minding the Numbers: What Today’s Accounting & Financial Services Buyers Really Think

Finding #3: Existing relationships have become substantially more important for buyers

Moving forward in the buyer journey and looking at the top selection criteria for buyers, there are two evaluation criteria that really stand out. First, the importance of an “existing relationship” is up 111%. While this trend had been in decline for a number of years, it has suddenly reversed. In times of uncertainty like these, clients are looking to reduce risk. They want to work with partners they already know. This is a key finding to understand.

Combine the desire to work with an existing partner with “offers the services needed,” which is up 151%. Considering those criteria together would suggest you may want to review your business development process. Talk about increasing the frequency of conversations with existing clients to uncover new opportunities. Conduct research to uncover their specific needs and raise the overall quality of your thought leadership to include very detailed industry insights.

Chances are, there is a lot of fruit still on the vine with your existing client base. In times of uncertainty, clients can be averse to change—and they would rather work with a firm they know and trust. An added benefit for you is that it’s a lot less expensive to build new opportunities with existing clients than to develop new relationships.

Research Report

Inside the Buyer’s Brain, Accounting & Financial Services Edition

Download Now

Finding #4: LinkedIn dominates, but other social media platforms are increasingly being used for business purposes

This chart looks very different for accounting and financial services compared to other professional services industries. LinkedIn is the dominant social media platform everywhere, but in most other industries the competing social channels are in decline. In the case of accounting and financial services, there’s been a dip in the use of Facebook, which likely reflects a trend where social media channels are being used for specific purposes for specific audiences. Interestingly, we see an uptick in Twitter, Instagram, and YouTube. Unfortunately, the data doesn’t fully reveal why their use is on the rise in one industry but not the others. One explanation could relate in part to job seekers and recruiting efforts across various social media platforms.

Download the Free Executive Summary

A Few Final Thoughts

Since our last study two years ago, it may come as no surprise that accounting and financial services buyer behavior has changed. Prolonged uncertainty and regulatory changes are fueling buyers’ needs for advice and services—and that same uncertainty is also influencing buyers’ decision-making and a desire to reduce risk.

In this changing landscape, the best way for your firm to stay relevant is by researching your target audiences to understand their specific challenges and needs—as well as where they look for information and how they evaluate service providers. This type of research will validate—or challenge—your assumptions and decisions.

To dive deeper into the data, you can purchase Inside the Buyer’s Brain, Fourth Edition: Accounting & Financial Services, which provides even more insights into your buyers and will equip you with advice you can use to adjust your marketing strategy with confidence—and position you for long-term success.

The post How Accounting & Financial Services Firms are Moving Forward in 2023 appeared first on Hinge Marketing.

As new firms emerge, they must establish a unified identity and brand message to differentiate from both competitors and earlier iterations of themselves.

Don’t sink before you leave the slip

When going through a merger or acquisition, leaders tend to focus on the quantifiable aspects of the transaction, such as financial models, tax implications, and employment contracts. However, it is important for firms going through a merger to establish a unified brand message that aligns with the new business strategy. When firms do not prioritize or consider their brand message they undermine and may sabotage the success of an M&A growth strategy—they sink the ship before it gets a chance to set sail.

Mergers and acquisitions present great opportunities for firms to rethink and refresh their brands. The manner in which a firm creates its new brand message after a merger provides insight into the new entity and how the unique aspects of the separate firms and cultures come together to create an “enhanced” organization.

Chart your course thoughtfully

It’s not an easy task to combine two company cultures to arrive at a unified brand with a common culture and brand message. The leaders of each firm must agree on a new brand that accurately reflects the combined strengths, differentiators, and value propositions of the united organization.

We recommend firms begin the process with a strategic planning session, during which leaders discuss and agree on the strategies and tactics for integrating all aspects of the merging firms, including operations, marketing and culture.

There is always a lot to cover. Here are a few examples of the marketing and branding decisions that should be made during the strategic planning session:

• Whether or not to rename the firm, adopt a new logo, or to co-brand
• The underlying brand position and how it will support immediate and long-term business goals
• Which key differentiators to highlight in marketing communications
• How marketing budgets and resources will be allocated
• What client retention strategies to implement

Row in the same direction

To avoid internal discord, spend time communicating with and listening to key stakeholders and representatives throughout the new organization. If everyone is “rowing in the same direction,” you will speak in a unified voice and be able to speak about the new organization—what it is and what it represents.

To gain maximum support and buy-in for the new brand message it’s best to get everyone involved early. Create an atmosphere of inclusion, in which people feel they can be heard and their voices matter. Not all opinions can be included, but people will know that the firm’s leadership listened to and considered their perspectives.

Don’t get caught without a paddle

Once a new brand message has been established, equip everyone in the organization with the knowledge and tools they need to communicate the message consistently. Leaders in marketing and communication can serve as key points of contact for educating the entire organization on how to speak on behalf of the firm.

The firm’s brand message must include the consistent application of the visual brand in all marketing and collateral pieces, including sales materials, brochures, pitch decks, and the firm’s website.

Land Ho

As you combine teams, provide your employees something to rally around and get excited about. Inspire their enthusiasm for the new brand by making internal communications a priority.

Consider throwing an internal launch event for employees and share the new brand message and materials with everyone. Explain key dates for external brand launch. Let them know what happens next, so everyone is on the same page when the new brand is fully in place. Keep employees at all remote locations informed as well. If it’s not possible to do this in person, plan to send regular communications like email newsletters from members of the executive team to keep everyone aware of what’s happening.

Don’t forget to tell your mates

Of course, you can’t forget your clients. Focus your rebranding efforts on your core brand message and positioning. Establish compelling differentiators and proof points so clients understand how they’ll benefit by working with you—how you will help them solve their problems.

Clients want to know that the merger will make their lives easier, not just grow the size of your business. Communicating the reasons for and vision of the merger is important for keeping clients as you merge.

Changing tides

Timing is critical when establishing a new M&A brand message. Moving quickly to energize staff, give clients confidence, and generate buzz about the transaction. To best leverage the communications opportunities, you must engage internal and external audiences from the start.

Establishing a new brand message due to a merger or acquisition can be a daunting process but when you plan well and communicate effectively it can present a golden opportunity to unify cultures, improve client relationships and strengthen a firm’s position in the market.

The post How to Convey a Unified Brand Message After a Merger or Acquisition appeared first on Hinge Marketing.

Does your business have a tagline?

Well, there is a good chance it’s bad.

My undergraduate journalism teacher would be furious at me for burying the lede. This is a write up on developing an effective tagline for the professional services organization. But give me an opportunity to explain the brash opening. 

We are exposed to taglines every day. Some are timeless and connect so completely with the brand that they are almost interchangeable with a name. Here are a few classics which I’m sure you’ll recognize:

• “You’re in Good Hands”
• “Breakfast of Champions”
• “The Quicker Picker Upper”                                                                         
• “A Diamond Is Forever”
• “Just Do It”

Good taglines seem so obvious. And that is their magic. We don’t think about taglines in any sort of systematic way. Then one day we need to “come up with” a tagline for your business. And that is where things typically go sideways.

As Hinge’s Director of Business Development, I have a lot of conversations. Organizations will come to us to help solve their largest marketing and branding challenges. It’s from these conversations and the background prep that goes into them that I have developed my highly educated opinion on taglines.

Most are bad. 

Really bad.

We might start with a brainstorming session to come up with a page full of options—only to realize that nothing quite lives up to expectations. We need the next “The king of beers!” In that frustration, we’ll pull out all the stops and find some really creative friends. A cascade of ideas follows, but still no winner. Eventually the group settles on something like: 

“Your Trusted Advisor”

That’s cool. Same as every other Accounting and Financial Services firm. Ever.

Tagline Defined

A tagline is a short slogan used to reinforce a key aspect of a product or brand. It goes by many names (in the UK, for instance, they call it a strapline), and it can range from witty to mundane.

In the context of professional services firms, a tagline is usually part of a firm’s identity (as opposed to an ad slogan) — so it usually appears in conjunction with the firm’s name and logo.

Why You Need a Tagline

Part of the difficulty in selecting a tagline is that many professional services marketers don’t really understand what a tagline can—or cannot—do.

It is a bit of an oversimplification, but a tagline can take on three forms:

1. It can describe what you do

For example, “The program management specialists” or “CPAs and advisors.” This approach can be very helpful if your firm is not well known and your name does not hint at what you do.

2. It can convey a benefit of your service or your market position

For example, “The accessible CPAs.” or “IT. Without the anxiety.”

Our client, MHP, worked with us to rebrand and develop new collateral that would help them enter new, adjacent markets to their home state of Wyoming. “We know the territory” serves as a tagline that shows prospective clients that they are knowledgeable while also playing to the history of the region.

3. It can attempt to convey an emotion or aspiration.

The Nike “Just Do It” category. This tends to be the most common option. It is also the riskiest and most likely to miss the mark if not tied to your target audience.

Choosing Your Professional Services Firm’s Tagline

Here’s a secret: start by choosing what you want the tagline to do from the options above. And before you ask, you can only have one top priority. 

So how do you know what is the most important goal? Remember that a tagline almost always travels with an organization’s name and/or logo, so it does not need to check every box. 

A good question to ask is if your name conveys what you do? 

For example, The International Finance Corporation doesn’t need a tagline to convey what business they’re in (Hint: It’s international finance). Similarly, your logo can signal industry focus or even convey an emotion already. There isn’t a need to double up on any of those three pathways. 

When you have evaluated what your name and logo communicate, you are in a position to identify what role your tagline can play in expressing your firm’s brand. A tagline is often the most flexible element of your brand identity, so it can make up for shortcomings in other areas.

Take a look at our work with Jones CPA Group to see how we used research to create a powerful and relatable rebrand including the tagline, “Let’s talk success.”

Also, remember that it takes time and exposure for a tagline to gain traction. Repetition and association with evocative imagery give it power. Try to imagine the reaction back in 1988 when a forward thinking agency first introduced “Just Do It” to a conference room in Beaverton, Oregon. No doubt, it took courage and an open mind to embrace it. The rest is history.

Final Thoughts

A tagline is a clear statement of what you do, who you do it for, or how I should feel. It needs to be straightforward, descriptive, and can’t be too long. Try to balance the creative with the specific character of your firm (fun-loving, practical, innovative, etc.).

And please don’t make it “our people make us different.”

If you’re scoring at home, the taglines from the introduction represented (in order) Allstate, Wheaties, Bounty, Debeers, and Nike. I hope you got a better grade than I received in that college English class. 

Free Resource

The Brand Building Guide for Professional Services Firms

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The post Creating a Professional Services Tagline appeared first on Hinge Marketing.

For more than a decade, Hinge has been researching the fastest growing and most profitable firms across multiple professional services industries—analyzing the very latest and most effective marketing and business development strategies. As part of this year’s annual study, 427 Accounting & Financial Services (A&FS) firms participated, representing nearly $65 billion combined revenue and more than 220 thousand employees. A&FS firms of all sizes participated and accounted for 22% of the overall study.

While the majority of participants do business in the United States (64%), the study also includes a diverse global representation.

Strong Growth Despite a Disruptive Year

Accounting & Financial Services moved into the third spot this year in growth, up from last place the prior year (when they had a 9.3% median growth rate). The Technology & Software industry remained the growth leader again this year. 

The Consulting industry also increased proportionally (up from 9.5% last year) —suggesting a market appetite for advisory and consulting services as businesses looking to grow in a disruptive and changing environment seek reputable partners to provide strategic guidance.

Last year saw a surge in online leads, driven in large part by the pandemic. Accounting & Financial Services continued to progress, increasing its digital lead generation by nearly 19%. While the shift toward digital marketing techniques continues, more opportunity is still at hand. Both the Legal Services and Technology & Software industries generate an even greater proportion of leads from digital sources.

Top Concerns

While the uncertainty and anxiety of 2021 have moderated somewhat, the need for new skills remains A&FS firms’ top concern. Meanwhile, the shortage of top talent has jumped into the No. 2 spot (up from the 7th position in last year’s study). 

Combined, these two priorities illustrate the continued stress on the industry of a shrinking talent pool—a situation exacerbated by the current social and economic shifts the media has dubbed The Great Resignation.

Growth AND Profitability

While the Average Growth firms in the industry did well, the High Growth firms surged in top-line revenue with a median growth rate of 30%. High Growth firms are defined as having a compound annual growth rate of 20% or greater over a three-year assessment period. 

High Growth firms not only grow faster, but they are also much more likely to be highly profitable. A common perception that rapid growth diminishes profitability does not seem to be the case. Compared to their No Growth counterparts, A&FS High Growth firms generated profits that were 14.2% higher. 

High Growth firms come in all sizes, but there are some sweet spots. We found in the new High Growth Study 2022, Accounting & Financial Services Edition, high-growth firms benefited from 4 key advantages: Talent, Technology, Marketing, and Strategy.

Key Advantage 1: TALENT

Even before the pandemic, there were already bleak forecasts of a shrinking talent pool and tales of a shortage of highly-skilled professionals so extreme that job candidates would dictate their own salary, benefits, hours, and even their own work environment. Fast forward just a few short years, and that prediction has become reality. No matter how the latest headline reads … The Great Resignation, The Big Quit, or The War for Talent … the fact is that firms are scrambling to find real and authentic ways to connect with employees’ top concerns and create cultures with lasting appeal.

We have found that in addition to hiring skilled talent, A&FS High Growth firms are more likely to work with outside agencies, firms, and freelancers to ensure marketing needs are being met. While traditional services such as website improvements and marketing materials top the list, High Growth firms also partner with providers who thoroughly understand their industry and have the established expertise to implement new strategies and techniques for growth.

High Growth firms don’t simply outsource projects. As we can see in the chart below, they proactively develop hybrid teams for quick access to specialized skills such as SEO, coding, video production, copywriting, and research—valuable skills that complement in-house teams. What they don’t do is defer business development due to a lack of talent or skills.

Key Advantage 2: TECHNOLOGY

High Growth A&FS firms are accelerating their use of technology at a faster pace. From core business processes to marketing automation and business development functions, they are evolving mature operations that power growth and profitability.

One of their biggest advantages is a much higher adoption of Customer Relationship Management (CRM) systems. A well-implemented CRM system can provide the single biggest advantage in leveraging technology. But purchasing the software isn’t enough. Successful implementation includes proper training, ongoing optimization, and systems integration to maximize the full benefits.

High Growth firms are also more likely to use more sophisticated reporting to track month-over-month and year-over-year trends to evaluate the success of online campaigns and make informed business decisions. Sadly though, many A&FS firms are not tracking any marketing metrics. Access to accurate real-time data is one of the keys to higher levels of profitability.

Growth-oriented firms are actively innovating by automating and systematizing their own business processes—as well as helping their clients do the same. By expanding their digital capabilities and advisory services, A&FS firms position themselves to provide sophisticated, high-value strategic services. In addition, their marketing teams have more access than ever to analytics and reporting to inform crucial data-driven business decisions.

Key Advantage 3: MARKETING

While overall marketing budgets remain elevated across the board, High Growth firms made substantially higher investments in marketing in order to drive growth and profitability. High Growth firms not only invest more of their resources in marketing, but they also invest in different marketing activities than No-Growth firms.

Marketing technology & automation is the top priority for 30% of A&FS High Growth firms, while it was identified by only 20.8% of No Growth firms. Without the proper tools in place to manage business development and quantify and track results, the No Growth firms will continue to trail.

The High Growth firms plan to invest in content creation—building a foundation that will continue to elevate their online visibility and expertise. No Growth firms are playing catch-up with social media, website performance, and brand differentiation.

When we look at the top 10 most impactful techniques, we notice something interesting. High Growth firms get a much greater impact from three specific techniques that are relatively overlooked by No-Growth firms: public relations (earned media), keyword research/search engine optimization (SEO), and networking at targeted conferences, trade shows, and events.

While many A&FS firms use SEO, an overwhelming majority (42.9%) are operating at a very low level of maturity. Only 27.8% report a high level of SEO maturity. Increasing the level of SEO maturity provides companies an opportunity to gain a competitive advantage.

Key Advantage 4: STRATEGY

High Growth firms identify a different set of anticipated challenges over the coming years. They want to expand skill sets and increase automation, while their No Growth counterparts are more concerned with finding talent and managing a remote workforce.

With an eye on managing change and responding to unpredictability in the marketplace, High Growth firms may be better prepared to pivot and adjust if the need arises.

Where are High Growth firms focused next? High Growth firms are focused primarily on the future and technology issues, such as data and analytics, AI, cybersecurity, and workflow automation. No Growth firms are still working on developing their strategy.

A Final Thought

While uncertainty hasn’t gone away, neither has the opportunity for growth and profitability. So, where are A&FS firms finding success? 

By accelerating the adoption of new technologies and investing in specific marketing techniques that generate the greatest impact, High Growth firms are becoming more digitally mature—and gaining greater visibility to inform smart business decisions. High Growth firms are also creating hybrid solutions by outsourcing highly specialized skills and partnering for industry marketing expertise.

One immediate challenge for firms as the war for talent continues will be the ability to recraft their corporate cultures. Attracting and retaining the most talented individuals will require authenticity of the employer brand and a demonstrated commitment to shared values, work-life balance, and opportunities for meaningful career advancement.

The post Accounting & Financial Services: 4 Keys to Accelerating Growth from the 2022 High Growth Study appeared first on Hinge Marketing.

First, accounting is a service that every business needs, so there is a lot of competition. And since many of the same accounting principles and skills apply across industries, many firms are competing for every company out there.

Second, there are compliance requirements that force businesses to use certain services (audit and taxes, for starters), so there is a sense that if I must do it, at least I should try to minimize costs.

The result is as inevitable as death. Accounting services become commodities. It’s difficult to differentiate between firms, and fee pressure becomes intense.

Not all accounting leads are equal

There are ways to free your firm from this dilemma. Here are some of my favorite strategies for tipping the scale in your favor:

1. Become a specialist.

There’s no need to be everything to everyone. There are a number of powerful advantages to specialization, including being able to command higher billing rates, generating more leads, and being able to close sales more easily.

You can focus on understanding an industry so well that you know all the non-accounting business challenges they are facing. Then you can have meaningful conversations about how your services help that industry solve other problems — problems that other CPA firms will completely miss. This is a big advantage and will bring you better leads because you offer more solutions.

Other types of specialization that can help differentiate your firm include:

• Service type specialization
• Geographical specialization
• Specialization in a certain role within organizations
• Specialization in certain types of problems

2. Become a Visible Expert® in your field.

Develop superior expertise in an area, then couple it with high visibility on an important emerging issue. If you choose the right issue and promote it effectively, your firm can develop a Visible Expert. This professional is a go-to person on an important topic. The presence of that person in your firm will not only raise the profile of the firm in the marketplace, it will also improve the reputation of the whole firm.

A Visible Expert is different from a “rainmaker” who brings in business through personnel connections. The Visible Expert generates high-quality leads through widely recognized competence. But beware. It’s not just about technical competence. It’s also about communication and helpfulness.

3. Do a major study on an important topic.

Nothing adds credibility and visibility like the release of a groundbreaking study. Of course, if you make the study relevant to a specific industry and answer a question everyone is dying to have answered, you stand a good chance of being noticed and taken seriously. It also helps to partner with a trade association or another industry player to add credibility and increase your reach.

4. Publish very useful content.

Forget the usual newsletter babble. Find a topic that will be very useful to your target group and explain it in very simple terms. In our research, we found that one of the top ways that buyers are convinced of expertise is when someone is able to explain a complicated subject in an understandable way.

Don’t be afraid to share your secret sauce. Today’s buyers have changed and expect free education. And if your accounting firm isn’t providing that education and expertise, you can be sure that someone else is. More helpfulness equals better accounting leads.

5. Get serious about social media.

Social media is not a fad or a treat to utilization. It’s continuing to grow in popularity and is simply the online version of networking. If you don’t have a strong presence on social media, you are missing an important communication channel to your potential clients.

In fact, about 60% of your accounting services buyers are checking you out on social media before purchasing. Social media has big benefits for accounting firms, including:

• It increases the visibility of your firm and its experts
• It promotes and increases the reach of your content marketing
• It allows your firm to stand out
• It builds trust and credibility

6. Invest in search engine optimization (SEO).

A recent study of 500 professional services firms found that SEO was the single most effective tool for generating online leads. It is also probably one of the single most cost-effective approach for generating high-quality accounting leads.

It works best when combined with very useful content (content that is also SEO optimized) and social media (to help share that content). At a high level, SEO consists of two main components:

• On-site SEO: Use targeted keywords or keyword phrases to communicate what the content on your site is and its relevance to what searchers are looking for.
• Off-site SEO: Obtain high authority and relevant links to your website through outside engagements and articles.

7. Put them all together.

The greatest impact on your lead quality and quantity will come from combining all of these techniques and strategies into a unified, ongoing campaign. While each of these tips helps raise the quality of your new leads, putting them together builds a sustainable advantage. It both distinguishes you from other firms and communicates a powerful message to potential clients. It clearly communicates that you provide value beyond the “me too” firms that flood the marketplace.

Well-targeted, clearly differentiated, obviously more value… sounds like a formula for better accounting leads.

The post 7 Strategies to Generate Better Accounting Leads appeared first on Hinge Marketing.

At CPA firms across the country, aging baby boomers in senior roles are approaching retirement and driving consolidation. Throughout the marketplace, a pitched battle is underway to secure the top talent. Acceleration in disruptive technology has changed the way buyers buy services. In this demanding and highly competitive environment, the ability to anticipate emerging challenges can spell the difference between market leaders and also-rans.

As part of its annual High Growth Study of professional services firms, the Hinge Research Institute surveyed nearly 1,300 professional services firms of many different industries and firm sizes .

Within this larger sample, we identified 171 accounting and financial services (A&FS) firms. These firms accounted for over $100 billion in revenue and employed over 160,000professionals.

While the study explored many issues, one of particular interest was participants’ view of the challenges facing their firm over the next several years. And because this is an annual study, we were able to look at how these concerns have changed since the previous year. The results were revealing.

The Top 5 Business Challenges

So what were these leading challenges, and what do they mean for firms seeking to remain competitive in today’s demanding and rapidly evolving marketplace? In Figure 1, we see that many of the top anticipated challenges from last year’s High Growth Study have remained in the top 5.

Let’s review these top anticipated business challenges one-by-one.

1. The need for new skills

For the second year in a row, the need for new skills is the number one anticipated business challenge for A&FS firms. 47.5% of respondents recognize that changes in technology and best business practices put substantial pressure on them to keep pace with new marketplace standards. After all, if they don’t perhaps a competitor will! And keeping up, requires the right people with specialized skill sets.

When we discuss acquiring new skills, two potential solutions that come to mind: 1) training your existing workforce; and 2) hiring new talent who already possess the skills you need. Of course many firms use a mix of both of these approaches, but each comes with unique challenges. On one hand, upskilling your existing staff takes people away from billable work, while on the other hand, hiring specialized talent can be very expensive. Nevertheless, to compete for the best business, firms must ensure they have talent with the right set of skills.

2. Automation/artificial intelligence (AI)

Up from the number three spot in last year’s study are issues related to automation and artificial intelligence—although the challenges seem to continue to evolve. Today, it is not only about keeping up with rapidly changing technology. It’s also about being replaced by technology. If you offer a routine compliance service, can a cheaper AI-powered solution be far off?

Often, common business challenges in an industry double as rich opportunities, and this is just such a case for A&FS firms. For example, firms that leverage the power of marketing automation have a distinct advantage. We are also seeing an increasing trend toward packaging technology and professional services together as new “products.” It’s precisely because the field as a whole is struggling with technology that using it successfully can be so effective.

3. Changes in how buyers buy your services

Buyer behavior is shifting and 42% of respondents don’t see this trend slowing down in the future. And this concern is not unique to accounting and financial services. Firms across the professional services spectrum struggle with the same issue.

A&FS buyers are increasingly turning to digital channels for answers to their business-related problems. This trend demands that firms continue to improve the maturity of their digital marketing techniques as well as the tools they use to reach prospects on digital channels. High growth A&FS firms have embraced accommodating prospects digitally and see about 30% more leads from digital sources than their no growth counterparts.

4. Downward price pressure on services

Up 16% since last year’s study, downward price pressure on services once again finds itself in the top five anticipated business challenges for the future with 41.4% of respondents selecting it. When we talked with top management, it became clear that multiple factors are driving this concern. Unsurprisingly, commoditization of services is front and center. But it is not the only force in operation. Increased competition and automation also play important roles.

One of the most successful strategies to combat price pressure is to focus on making your firm’s high-value expertise more visible in the marketplace. You may have such experts in your firm already: individuals who are widely recognized in the industry, and even beyond, for their talents. These well-known professionals, whom we call Visible Experts®, boost the perception of your overall brand among both clients and employees—and they tend to command higher billing rates as the visibility of their expertise increases.

Our research shows that it’s possible to cultivate Visible Experts® in your firm through a program of consistent, replicable techniques.

5. Managing a remote workforce

Making its debut in as a top five anticipated business challenge for A&FS, 40% of respondents recognized the challenge of managing a remote workforce. This of course is not a surprise! The global COVID-19 pandemic forced businesses across all professional services to increase their capacity to conduct business virtually. Among all professional services firms this was the second highest anticipated challenge just behind unpredictability in the marketplace.

Marketing Planning Guide - Third Edition

The Marketing Planning Guide for Professional Services Firms

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High growth and no growth firms have different plans regarding their future plans to utilize office space with high growth firms being twice as likely to say goodbye to the office completely and conduct business full time remotely. Of course this is not an option for all businesses—especially those working on site with government agencies. But just as digital marketing and business development has changed the way we attract new clients, it has had a parallel effect on the way we will recruit and manage professionals in the future. The best talent is likely to demand a flexible, remote (or part remote) work environment.

Conclusion

Today, attracting and developing new clients and the talent to service them is a key business driver for CPA firms and other financial services businesses. As clients’ needs, buying behaviors and expectations evolve, firms’ marketing programs must adapt alongside them. At the same time, these marketing programs must also focus on attracting and keeping the best talent and providing them with the right technology for them to stay competitive.

As accounting and financial services firms attempt to address all of these challenges, they need highly strategic, coordinated marketing more than ever, and many firms may require expert guidance. The firms that are able to build a nimble, multi-purpose marketing machine will be the ones that compete successfully and grow.

The post The Top 5 Business Challenges for Accounting & Financial Services Firms appeared first on Hinge Marketing.

First let’s define what we mean by a high-growth firm. In our research, we define a high-growth firm as one with a compound annual growth rate of 20% or greater over a three-year period. Now let’s explore three macro-level marketing strategies high-growth firms commonly employ to achieve results.

1. Conduct Research Regularly

There is a saying, “You don’t know what you don’t know.” So it makes sense that firms conducting regular research to better understand their clients’ evolving needs and the current state of their client’s market are able to make more informed strategic marketing decisions. Research provides the insight to connect with their clients’ and prospects’ key issues and evolving concerns and inform marketing strategies that yield a greater return on marketing investment. In fact, high-growth firms are more than 2X more likely to conduct research than their no-growth peers.

Research is not a one-and-done activity. We cannot overemphasize the importance of conducting research at least annually to keep your finger on the pulse of the marketplace. Your clients’ priorities and needs change over time, economic and political events may have significant impacts on business, and competition is ever-present and ever changing.

Not all research is the same. There are different methodologies and ways to structure research in order to achieve specific goals. A firm going through a merger that will result in a rebrand is interested in learning different things than a firm with a client base that has been affected by new regulations, so it’s important that each research initiative be structured to provide the insight and understanding you seek.

2. Allocate Resources Appropriately

When you set out to accomplish something, it’s important that you position yourself for success. At the outset, consider what it will take to get you where you want to go and then dedicate the necessary resources to achieve your goal—the people, time, dollars, etc. that are required to garner the desired results and return on marketing investment.

We liken it to building a factory. You don’t expect a factory to start producing a product and revenue without first making an investment in the plant, machinery and people (brainpower) needed to successfully produce results. This doesn’t mean that you have to have an exorbitant marketing budget. In fact we’ve found that high-growth firms actually spend less than average on marketing than their average or no-growth peers. And high-growth firms typically allocate less effort to traditional marketing techniques, which are often costly, and invest more effort in digital marketing. So it’s not a matter of investing more in marketing. Success comes from knowing where to invest your limited resources.

3. Track Results

Once you’ve determined which strategies to adopt and which tactics to invest in, you must continually track results and recalibrate to optimize your marketing program and gain the most return on marketing investment. No-growth firms tend to focus on bottom-line metrics such as the number of new clients acquired. In contrast, high-growth firms track a wider group of variables spanning the entire marketing pipeline, including brand awareness, website traffic, social media engagement, lead generation and conversion rate. By tracking the full marketing cycle you can pinpoint exactly where in the pipeline you are succeeding and where there is room to improve.

Bottom Line:

High-growth firms not only grow faster but they’re also much more likely to be highly profitable than their no-growth peers.

They conduct research on a regular basis to stay informed about the marketplace, their clients needs and their own performance. They use research findings to establish strategies and allocate budget and effort to techniques that provide maximum return on marketing investment. And high-growth firms continually track multiple metrics throughout their pipeline and adjust as needed to stay at the forefront of their market. If your firm is not already a high-growth performer, there’s no time to waste. Start implementing these strategies today.

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The Hinge Research Institute’s newly released analysis of the Accounting and Financial Services segment of the 2021 High Growth Study reflects these trends. The report first looks at overall industry trends within the larger context of the general professional services industry. It then continues on to compare the fastest growing accounting and financial services firms (those having a compound annual growth rate of 20% or greater over a three-year assessment period) with their slower, no growth peers.

Purchase the 2021 High Growth Study: Accounting & Financial Services Edition

About the Study

The analysis looked at over 170 firms with a combined revenue of over $100 billion and 160,000 employees. The sample was representative of firms of all sizes.

Unfortunately, the Accounting and Financial Services industry as a whole is lagging all other professional services industries in terms of overall revenue growth.

But the analysis offers clear insights into how some firms are successfully navigating the dynamic and rapidly changing environment, at least in part due to how they are approaching marketing and business development. High Growth firms are defined as having a compound annual growth rate of 20% or greater over a three-year period. About 20% of A&FS firms in this year’s study meet this criteria—down from 2019 (26%). On the other end, the No Growth category was up sharply—from 10% last year to 24% this year.

Understanding what these firms are doing differently is instructive to a better way forward. The following are some of the high-level insights.

Key Findings

For Accounting and Financial Services Firms, Business and Competition are Now Both Virtual and Global

Accounting and financial services have long been considered inherently local in nature. However, that is the case no more. Covid-19 has required almost every firm to learn how to develop business, serve clients, and manage talent remotely. While this adjustment to “normal operating procedure” has not been without difficulty, many firms have been able to learn ways to cope with a new and shifting marketplace.

Marketing and business development in a virtual world are new experiences for many firms. For those that have been doing it for years, what they have learned is that buyers are looking for firms that understand their industry and business issues and have the expertise to solve their problem. In a global and digital world, this means firms are exposed to a whole new set of competitors and opportunities.

High Growth Accounting and Financial Services Firms Use Research to Reduce Risk

Accounting and financial services firms that conduct research on their target audience grow faster and are more profitable. Why? First, in a world marked by unpredictability and disruption, research provides the insight to connect with your clients’ and prospects’ key issues and evolving concerns. The firm that has the best, most up-to-date understanding of their target market’s needs and priorities, has a very real competitive advantage. Think of it as accelerating the learning curve. Regular research reduces risk.

Second, original research on a target audience is one of the most powerful forms of high value content. Firms are eager to learn of trends and research supported insights in their industries, and sharing the results of your research turns out to be a great way to attract potential clients, while demonstrating your expertise. These insights can be delivered via a wide variety of marketing channels, from social media to trade publications and webinars, making it an exceptionally convenient and effective core of a content marketing program.

High Growth Accounting and Financial Services Firms Are All In On Digital

There has been a decade-long trend of accounting and financial services firm buyers using digital channels to research important business issues, find, and evaluate service providers. The pandemic has accelerated this digital adoption to compensate for decreased face-to-face interaction. If there was still any question, consider that the proportion of new business leads generated from digital sources (e.g., website, email, social media, digital advertising) surged by 30% in the last year.

Additionally, High Growth firms show us that increasing digital leads is integral to their success. They are getting about 30% more leads from digital sources than their No Growth peers.

What’s more, nearly 29% of them are actually increasing their marketing budgets and spending it on digital tools and techniques, rather than more traditional avenues.

For firms that have been digital laggards, it is time to embrace modern marketing, even if only for defensive purposes. The best time to invest is when your competitors are pulling back and a firm with a weak digital strategy this year, could easily find itself in the No Growth column next year.

High Growth Accounting and Financial Services Firms See More Impact From Techniques that Demonstrate Their Expertise

How do you make your insight and expertise visible in a virtual world? The answer: by using the very techniques that the High Growth firms use. From writing to presenting to networking, firms have found effective ways to express and promote their competitive advantage.

See the Full Results. Purchase the 2021 High Growth Study: Accounting & Financial Services Edition

High Growth firms have different marketing priorities than their No Growth peers, and they also see more impact from the techniques they use. But the areas where we observed the greatest disparity is in application of more sophisticated technologies such as marketing/sales automation. High Growth firms are not only much more likely to have marketing/sales automation in place (85% vs. 69%), they are more likely to use it in a more sophisticated way. When automation maturity was assessed on a 6-point scale, the High Growth firms were much more likely (40.7% vs. 31%) to be in the top three levels of maturity.

High Growth firms are leaning into change and exploring digital strategies to better serve their target clients as they plan for an evolving marketplace. And this trend doesn’t only impact marketing automation.

High Growth Firms Have More Mature Automation Strategies for Core Business Software

In addition to marketing/sales automation adoption, we looked at the automation maturity (levels 4 and 5 of our Automation Maturity Scale) for both general business software (word processing, spreadsheets, etc.) and core business process automation (associated with the specialized work accounting and financial services do).

What we found was that High Growth firms are much more mature in the automation of their core business processes than their No Growth peers and there was little difference in their automation of general business software. This is a wake up call. Clearly, High Growth firms are leveraging core business process automation and in order to stay competitive, firms will need to commit to upgrading their automation maturity.

High Growth Accounting and Financial Services Firms are Embracing the Virtual Workplace

When we get to the other side of Covid-19, will the workplace ever be the same? Probably not. The trend to remote work and all that entails did not start this year. But it certainly has accelerated and introduced the concept to firms that never considered it before.

Just as digital marketing and business development has changed the way we attract new clients, virtual work has had a parallel effect on the way we will recruit and manage professionals in the future. Going forward, the best talent is likely to demand a flexible, remote (or part remote) work environment.

It’s no surprise then that High Growth accounting and financial services firms are already thinking ahead of the curve. The analysis found that they are nearly twice as likely to say goodbye to the office and go fully remote, and only 30% indicated that they do not anticipate a change in their office space requirements. Conversely, No Growth firms are more likely to introduce part-time remote options or make no changes to their office space requirements.

The Bottom Line

In this time of great uncertainty and a rapidly evolving marketplace, it is tempting to freeze in place and avoid making big decisions or changes to your marketing strategy. And while it may be tempting, it is undoubtedly a mistake.

The firms that adapt the fastest will gain a competitive advantage. The shift towards digital is well established and many accounting and financial services firms are pulling ahead of their No Growth competitors by following their clients online and making their expertise visible. Likewise, re-examining other important business processes like developing business and delivering services in a virtual environment for the long-term is going to be important as top talent will inevitably be demanding more flexible work arrangements. Now is the perfect time to learn from the firms that are leading the way.

The post The 2021 High Growth Accounting and Financial Services Industry Report Results Are Here appeared first on Hinge Marketing.

Why This Study is Needed 

Accounting and financial services firms (A&FS) are undergoing an extended period of flux. Clients are changing the way they educate themselves and how they look for and evaluate professional services providers. The traditional approaches are becoming less and less effective in today’s rapidly changing environment.

On top of these long-term trends, add a global pandemic and a rapidly changing regulatory environment and it is easy to see the stress and uncertainty that many A&FS firms experience.

Fortunately, there is a way to cut through some of this uncertainty and gain some real insight into what your buyers think today and where the trends are likely to take us in the future.

About the Study 

The original study was published in 2013 and provided the first comprehensive look at the differing perspectives of buyers and sellers throughout the entire professional services buyers’ journey.

A second version of the study was published in 2018. This study revealed a rapidly evolving landscape that presented new challenges and opportunities.

The pace and scope of change was so profound that we decided to follow-up with the current study just two years later in 2020. This study also saw the addition of industry specific versions of the report, such as this one.

The timing could not have been better. It allowed us to capture the first real indication of the emerging buyer concerns and preferences.

Focused on Accounting and Financial Services

In the current report we are focusing on accounting and financial services firms. We explore the challenges their clients are facing and the role they see their provider play. We also explore the new client journey from their first exploration of a business challenge to the final selection of the firm they choose to work with.

We then look at the client experience and how it does or doesn’t translate into an ongoing relationship and referrals. To put the findings in perspective we compare key A&FS results to other professional services verticals such as Consulting and Technology & Software. 

Sampled Both Buyers and Sellers

Using phone interviews and online surveys, we researched more than 1,021 buyers and 384 sellers of accounting and financial services. Because the buyers bought services from the sellers, we were able to study both sides of the relationship and how they see each other and identify disconnects that can derail a professional relationship.

Cross Industry Comparisons Included

In addition to reporting on the industry data, we also looked at the findings from other angles. This report examines the responses from Accounting & Financial Services firms and puts them in the context of three other major professional services groups:

The results of the study are organized around four questions that capture the most impactful steps in an A&FS buyers’ journey.

What Are the Buyers’ Business Challenges?

Most professionals believe they understand the challenges their potential clients face. This data demonstrates the fallacy of that belief.

Only one of the buyer’s top five challenges were correctly identified by A&FS sellers. Of particular note are strategy/planning issues and responding to regulatory requirements. Most A&FS firms are well aligned with at least one of these. Yet neither made seller’s top ten list of buyer challenges.

Professionals in A&FS firms have some significant disconnects when it comes to understanding the top challenges of their clients. It is hard to be relevant to buyer concerns if you do not understand what they are. And as we shall soon see, that miss can have a major impact on your firm.

How Do Clients Feel About Their Service Providers?

Most A&FS buyers (68.3%) would gladly recommend their current provider to a friend or colleague. But fewer and fewer friends and colleagues are bothering to ask. It’s quicker and easier to do a web search or check on social media. Even more troubling is the erosion of client’s willingness to recommend, down by an alarming 15% in just two years.

Despite a 25% incremental improvement, A&FS firms are still seen as the least relevant to buyers’ most important challenges of all the professional services studied. This is significant as relevance impacts both willingness to recommend and client loyalty.

High-level relevance to the prospects’ key issues not only wins new clients, it also helps you keep them. Firms that are viewed as highly relevant to clients’ current issues are 82% more likely to be highly recommended by their existing clients. High relevancy ratings are also associated with a 76% higher likelihood of having highly loyal clients. 

How Do Buyers Search for Service Providers?

A&FS buyers have traditionally turned to a friend or colleague when investigating business related issues. No longer. Web searches are now on a virtual tie with asking a colleague for help.

Similarly, webinars are now on a par with conferences and events as information sources.

LinkedIn is used by over 77% of buyers, making it the dominant social media platform.

Facebook is making a surprisingly strong showing with a third of A&FS buyers using it for business purposes.

A&FS firm visibility is nearly on par with the other industries. Visibility growth for A&FS firms is substantially less than for consulting (160%) and tech/software (81%). If present trends continue, A&FS firms could easily fall behind their consulting and technology/software competitors in terms of market visibility. 

How Do Buyers Evaluate Service Providers?

While nurturing existing relationships has long been foundational in many A&FS firms, we are seeing the limits of this strategy. Clients are less likely to stay with an existing firm, especially if a competitor has deeper industry knowledge and a more talented staff with greater subject matter expertise.

Talented staff/team skills are now the top deciding factor for almost one-third of Buyers. Industry knowledge and flexible and responsive client service are also becoming much more important in closing the A&FS sale.

What Does This Mean for Your Firm?

The A&FS industry is undergoing a period of significant and rapid change. While no one can know for sure how this change will play out, some conclusions seem clear.

Sellers have some dangerous blind spots when it comes to understanding their buyers. While we may feel that we really understand our clients and their challenges, the data paints a different picture. There are blind spots around key insights that will cost you new business unless you have accurate information. This is especially true during this period of rapid change. The solution is regular research on your target audience, such as the current study.

It’s time to get serious about digital. Consumers and clients have been migrating to digital communications channels for many years. We have seen digital approach and overtake traditional marketing and delivery channels. And with the widespread “remote work” experience that so many have shared, the time has come to act. Buyers are free to search for the specific expertise they need, independent of geographic location. Don’t get left behind waiting for things to “get back to normal”.

Focus on the relevance of your services. Making your expertise visible is important, but don’t forget to make it relevant to the buyer’s challenges as well. Don’t assume that your potential client understands what they need or how you can help them, even if it seems obvious to you.

Part of your job is connecting the dots between the buyer’s challenge and your solution. And don’t forget to reinforce that relevance on a regular basis. If not, you can easily get taken for granted over time.

Changes in buyer behavior are reducing the impact of traditional approaches. Buyers are changing their behavior at a fast clip. Many traditional A&FS business development strategies no longer work as well as they used to. They do what is quicker and easier. Buyers search online rather that asking a friend for a referral. They are less loyal and more inclined to find a best fit solution, rather than fall back on existing relationships. Don’t make the assumption that what worked before will work again.

People still matter. People are still important. Recruiting and retaining talented staff remains important to long term success. Buyers want to work with experts who can help them meet their challenges. Visible expertise closes deals. Human connection and trust still matter. The difference is that these interactions do not need to be face to face in order to be rewarding and successful.

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There are six very compelling reasons to make business model changes that come from a new, ground-breaking research study produced by CPA.com, Bill.com, and The Hinge Research Institute entitled, “Where Opportunity Meets Value: Business Model Trends for Accounting Advisory Services.

The study surveyed more than 650 accountants and business professionals who purchase accounting firm services (buyers)—with special attention paid to discrepancies in value perceptions between firms and buyers. It is in those discrepancies and perceptions where we believe accounting firms have opportunities to leap ahead of the competition if they act now.

Here are six reasons to adjust your business model now based on this new research.

Reason #1. Buyers are open to making long-term commitments to non-hourly billing structures.

In the survey, buyers displayed a high level of acceptance for non-hourly billing arrangements. Sixty-three percent of buyers reported that they pay for accounting services through fixed monthly fees or on a per-project basis. In comparison, only 28% of buyers said their accounting firm charges then by the hour—with 32% of accounting firm participants reporting the same.

If accounting firms want to change their billing structure with a client—for example, from an hourly structure to a fixed-fee arrangement—there is a window of time in which success appears to be far more likely. According to the data, if accounting firms switch their billing structure before the five-year mark, buyers are more than twice as likely to comply with the new arrangement than buyers who have been with an accounting firm for five years or more.

Reason #2. Buyers are willing to pay more to address their most significant accounting challenges.

Accounting firms looking to expand their client bases may find ample opportunities when targeting small- and mid-sized businesses. When asked which additional services buyers wanted from accounting firms—and how much they expected to pay for them, small business clients presented a 31% growth opportunity on average. Mid-sized business clients offered an 11% growth opportunity.

How can accounting firms convert this willingness to pay for additional services into actual revenue? According to the study, the answer lies in addressing buyers’ biggest accounting challenges and demonstrating they can solve them. When asked to identify what their biggest accounting challenges were, 19% of all buyer participants cited “planning for growth and expansion” and “getting expert financial insights.” Eighteen percent pointed to problems with cash flow and minimizing overhead costs. An additional 17% said staying in compliance and lacking time to focus on accounting and financial matters. See the full list of buyer accounting-related challenges below.

Reason #3. Strategic advisory services present great revenue opportunities.

Today, strategic advisory services present one of the most important growth opportunities—survey results suggest that accounting firms may be able to increase monthly client revenues by up to 50% by offering these services. According to the survey, buyers who did not currently purchase advisory services pay their accountants on average $1,108 a month. In contrast, buyers who do purchase advisory services spend $1,585 a month on average. That represents a 43% increase for accountants who are providing strategic advisory services for their clients.

How much more are clients willing to pay for strategic advisory services? The buyer participants not currently purchasing advisory services indicated that they would expect to pay 50% more for an accounting package that includes both strategic advisory and consulting services—and they are willing to pay more each month for packaged services.

Reason 4. Buyers have clear priorities among services offerings.

The services ranked as highly valued by buyers include: accounts payable/bill pay (provided by roughly one-third of accounting firm participants), data analytics and technology services (14% for each), and forensic accounting (currently offered by only 8% of accounting firm participants). Focusing in on one or more of these services creates a valuable opportunity for your firm to grow.

Each of these services can help businesses overcome what they identify as their primary challenges. For example, buyers with little time benefit from data analytics and technology services—which automate manual processes while providing financial insight. Similarly, outsourcing accounts payable (AP) to accounting firms—and automating that process—drastically cuts the time required for these processes and helps manage cash flow.

Reason 5. Value pricing introduces benefits beyond the bottom line.

Value pricing is not only a way to improve a firm’s bottom line—it can be a crucial tool in enhancing customer service and improving client satisfaction. It helps to understand where clients say their firms are coming up short. According to the survey, here are the top three things buyers would change about their firms:

• More communication touchpoints (28%)
• More familiarity with their business/industry (27%)
• Better customer service (19%)

The data also suggests that value pricing can directly address these issues. When asked to identify the top benefits of adopting value pricing, 64% of accountant participants identified “transparency between the buyer and seller.” Sixty percent said, “demonstrating the value of firm expertise” and 59% cited “lack of billing surprises.” Each of these benefits informs the customer experience—contributing to accountability and reliability, and showcasing the shared knowledge of accounting firm professionals.

Reason 6. Automation is directly linked to successful price increases.

Using automation, firms can assign highly manual processes (such as reviewing workflows, sending reminders and updates, and tracking progress on projects) to technology solutions. This allows both accountants and the business professionals they serve to offload lower-value, repetitive, administrative tasks without sacrificing quality.

One of the most significant challenges in adopting value pricing at accounting firms comes from within—especially when it comes to changing billing structures. Nearly 40% of the respondents with little automation cite internal resistance as a challenge—while only 25% of the highly automated participants say the same.

Automation can create new opportunities for accounting firms to charge higher rates—if their clients understand the value that technology and automation bring to their services. Automation technology enables accounting firms to better deliver on their experience and expertise, focus on servicing accounts, and provide strategic guidance and insight to their clients. This survey found that accounting firms are nearly 3.5 times more likely to successfully increase their price when they can communicate these benefits of automation to clients.

The six reasons from this research offer a rich, detailed picture of the opportunities available to accounting professionals today. They provide a framework for updating or even transforming accounting firm business models. Now is the time to hear the perceptions and expectations of accounting firm service buyers and build/revise a services roadmap. Bundle advisory services. Sell to buyers’ challenges. Experiment with value pricing. Reconsider technology needs. You can start by downloading a complimentary copy of the complete “Where Opportunity Meets Value: Business Model Trends for Accounting Advisory Services” research study.

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