A Model for Sustained Success

High Growth technology and software firms recognize that there is no magic bean that will produce sustained growth and profitability. No one technique, on its own, will fill the pipeline or build the talent pool required to produce consistent success. Instead, it requires a system of interconnected marketing techniques, programs, and technologies—and the skills to deliver them effectively. This study reveals how the highest performing firms build, tune, and maintain their marketing systems, so you can learn how to turn your marketing program into a powerful system that performs year after year.

What Drives Exceptional Company Performance

High Growth technology & software firms are growing at a rate nearly four times faster than their No Growth peers. But there’s an additional important distinction, and that is in profitability. The figure below shows that High Growth technology & software firms are nearly twice as profitable as their No Growth peers, earning an average profit of 17%.

What makes High Growth firms so successful? How are they able to generate exceptional growth and profitability in a competitive and unpredictable marketplace? Our research points to key advantages in four critical domains:

1. Technology

One in five High Growth technology & software firms report a high level of maturity in the digital tech stacks.

High Growth firms truly separate themselves from their slower-growing peers in the maturity of their digital technology. 55% of No Growth firms are in one of the two earliest stages of maturity, where their core processes are still largely manual. The majority of High Growth firms on the other hand operate in a model where their core processes are automated and connected, or where their entire digital ecosystem extends into the consumer journey to deliver customized experiences. And 20% of High Growth Firms report a high level maturity in their tech stack. Firms with a broad adoption across platforms that connect multiple processes, and the discipline to track a wide range of performance metrics are in a much stronger position to know where to allocate their marketing and business development dollars and resources.

2. Talent

High Growth firms are more likely to secure access to specialized skills by partnering with outside talent.

High Growth firms routinely use outsourcing to minimize the risk of the industry’s perennial talent shortage, giving them access to the skills they need to deliver exceptional performance and growth. Among the specialized skills High Growth firms are most likely to outsource, in descending order, are:

3. Marketing and Business Development

High Growth firms spend more on marketing and generate a higher portion of their leads from digital sources.

On average, High Growth technology & software firms allocated around 13% of their 2022 revenues to marketing and business development, not including staff compensation. High Growth firms also differ in the composition of their leads, generating nearly half of their leads from digital sources. No Growth firms get less than a third of their leads through digital channels.

Traditional marketing isn’t going away anytime soon, but a strong digital presence can make a firm’s traditional marketing even more effective. For instance, in a traditional network setting an executive who can refer new contacts to a website full of valuable educational content has so much more to offer than one who does not.

4. Strategy

High Growth firms are more likely to conduct research on their target audience regularly.

Professional services firms across all industries and growth categories have access to a powerful weapon that can eliminate much of the risk in their go-to-market strategy. That weapon is target audience research. Firms that consistently study, track, and measure the learning and decision-making behavior of their audiences—and then use those findings to inform their marketing and business development decisions—are more likely to grow faster and be more profitable. Why? Because this type of intelligence helps firms address their market’s evolving needs more quickly and directly. To learn more about these findings, see the 2023 High Growth Study Executive Summary.

High Growth software & technology firms understand this advantage, and they are more likely to conduct regular research on their target audiences than their No Growth peers.

Building a marketing system that consistently performs at a high level, eliminates risk through target audience research, and drives both growth and profitability takes time. It also takes the right technology and the right people. While the investment can be significant, it can pay for itself many times over.

Consider the High Growth firms in this study as a model for firms like yours, helping you address a wide range of challenges and pointing you to the most productive areas to apply your attention and marketing dollars. In short, you can look to these High Growth firms as you develop a system that will allow your business to thrive in today’s challenging environment.

For more detailed insights, you can purchase the Technology & Software Edition, or any of
the other five industry editions, today. (You can use the discount code, GROW50, to save
50% on your research report purchase.)

The post The Four Secrets to Growth and Profitability for Technology & Software Firms appeared first on Hinge Marketing.

We are used to hearing that a firm’s most important asset is its people, not necessarily the brand. But people come and go. And unless an individual’s reputation and industry presence is so strong that they impact the entire firm’s marketplace position, “people” only get you so far.

Your brand is what prevails over time and beats the competition.

Strong brands hinge on strong differentiators. Differentiators are the foundational components of communicating your brand clearly and consistently. If there is no difference between what you say about your firm and what competitors say about their firms, you have a weak brand. Unfortunately, this can have a negative impact on your firm’s growth and profitability. In our own research, we’ve found that high growth firms are 3X more likely to have a strong, easy-to-understand differentiators.

And within the realm of professional services, technology services firms struggle to articulate the right technology differentiator. With often complex service offerings with even more complex acronyms and terminology that describe those offerings, technology firms too often fall back on differentiating around being a “trusted partner” and having “best-in-class people.”

Here is a quick test to see if you have a true differentiator. Think of some way you believe your firm is different. Then ask if a potential competitor could ever say the opposite. If the answer is “no,” it is probably not a good differentiator (this is why having great people and offering great client service don’t pass this test).

Remember that a truly strong differentiator must pass three criteria: It must be true. It must be relevant to your clients. And it must be provable.

Let’s first peel away some very common misconceptions about what makes a bonafide technology differentiator:

• Your differentiator is not your firm’s name.
• Your differentiator is not your logo or tagline.
• Your differentiator is not your website or marketing collateral.
• Your differentiator is not your mission statement, culture, or core values.
• Your differentiator is not your people.

Instead, each of these are tools that help your differentiator communicate your brand. But they are not differentiators in and of themselves.

How do you then come up with relevant brand differentiators, ones that support your brand and help you stand out in the marketplace?

Our research points to five key factors around which firms should consider building their differentiators to achieve brand strength:

1. A Well-Defined Target Audience

While it’s tempting to think of your firm’s differentiators as having universal appeal, it’s rarely the case. It’s far more strategic to build your differentiators around a clearly defined and well-understood target market. To be meaningful, a differentiator must be relevant to “someone.” No differentiator can try to be relevant to everyone. Many professional services firms are reluctant to specify a target audience. They do so at their own disadvantage.

2. Relevance to the Success of the Target Audience

Your differentiator must also be seen as being relevant to the success of your client. It’s not enough to be nice people or even knowledgeable and helpful. Those fall into the “nice-to-have” category. The real driver of a successful brand through relevant differentiation is your ability to define the problem, solve the problem, and make your clients successful. You aren’t just a bystander. You are a contributor to your clients’ success.

Research Report

Inside the Buyer’s Brain, Technology & Software Edition

Download Now

3. Proof Through Marketing With Informative Content

Content marketing involves providing a steady stream of useful information to potential clients or influencers. Think educational rather than promotional. Over time, potential clients learn how you approach problems and develop trust in your firm. When they need assistance, your firm is at the top of their list. Content marketing relies on winning clients by sharing something of value rather than trying to persuade or “sell” them. As such, it is a great way to call out your differentiators, build a brand, and generate leads.

4. Promotion of Your Visible Experts^®

While your people in general are not a strong differentiator on which to hang your brand, many firms have legitimate experts that become well known and influential among their target client group. While small in number, we call these fortunate few Visible Experts. By deliberately developing one or more of these high-profile experts, a firm can dramatically increase the power of its brand.

The strength of a Visible Expert’s personal brand transfers to the entire firm by virtue of the “Halo Effect,” so well known in the marketing community. In the same way, as a university becomes more prestigious when it has a Nobel Prize winning faculty member, so too a professional services firm benefits by having a nationally known industry thought leader on its team.

5.  Soul Searching Your Expertise

What industry verticals do you already have strength in? What kind of services are you good at delivering? Where do you offer the most value and enjoy the greatest success? Most established firms have a large number of industry or service combinations to consider, since growth has often been opportunistic.

Because the differentiators on which you develop your brand are so central to the ongoing success of your firm, they should be a matter of focus and investment. In reality, this is rarely the case. Because so few competitors are giving brand building and differentiators the attention they require, you have a great opportunity to benefit and gain a meaningful competitive advantage.

Free Resource

The Differentiation Guide for Professional Services Firms

Download Now

The post 5 Key Factors to Pinpoint Your Technology Firm’s Differentiators appeared first on Hinge Marketing.

About the Research

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

Our most recent study that analyzes the technology & software industry details the perspectives of more than 300 buyers and 700 sellers, where we compare their perspectives across on the following topics:

• How well do 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 three key insights that came out of our report.

Finding #1: Technology & software firm visibility is the lowest across all professional services industries

Our research found that the perception of a highly visible firm fell from 23.1% in 2020 to 14.6% in 2022 for professional services as a whole. The news is even worse for technology & software firms, which are perceived by buyers to have the least visibility across all industries. This begs the question: how many opportunities is your firm not considered for because prospects do not know who you are?

There is good news. Increasing your firm’s visibility is very much within your control.

How? Our research also shows that there is a relationship between relevancy and visibility. Firms that are rated as having high relevancy—which means they are perceived by their audiences as having a direct and positive impact on their top challenges and issues—also rate highly for visibility. Visibility can be improved with the right strategy and a marketing program that focuses heavily on educating audiences and demonstrating expertise.In other words, knowing your buyer can increase your relevancy, which in turn can raise your visibility.

Research Report

Inside the Buyer’s Brain, Technology & Software Edition

Download Now

Finding #2: Concerns around talent is the top growing issue for buyers

While the top challenge, “technology/data issues”, directly links to the services and advisory technology and software firms provide, the chart above shows that “Finding/keeping good people”, the #3 challenge for buyers, was the only challenge to have risen over the period 2020-2022. This data presents an opportunity for your firm to incorporate messaging around your offerings that address the people side of the equation—technology that helps with efficiency, transparency, and better decision-making for example.

Finding #3: Expertise is more important than ever in the evaluation process

What is the primary driver of influence when buyers are in evaluation mode? In a word: Expertise.

The chart above shows our findings on the top 5 methods used by buyers to evaluate technology and software firms. The prominent role of expertise in some shape or form is evident across each of the responses. Buyers aren’t looking for generalists. Instead, they want true experts to guide them through their (often expensive) technology and software engagements. And they want the proof points behind any claims of expertise.

If you are interested in growth, make sure your sales, marketing, and business development activities are aligned on one thing: freely sharing your expertise in educational content. Case studies are only part of the equation. You also need to produce a steady stream of content that addresses the business problems your audience is trying to solve. When prospective customers find and consume this valuable content, they begin to trust you—and are likely to think of you when they are ready to buy the kinds of services you offer.

A Few Final Thoughts

Customers can be fickle, and more than ever they are demanding that firms prove their expertise. To become the firm of choice in today’s marketplace you may need to do less explaining how your firm delivers value—and more showing your value in the form of educational, expertise-oriented thought leadership.

How do you do that? By far, the best way for your firm to stay relevant is by starting with research on your target audiences to understand their challenges and needs, where they look for information, and how they evaluate service providers. This type of research will validate–or challenge–your assumptions and decisions. Research, such as Inside the Buyer’s Brain, should show your firm how to deliver more value than your competitors.

The post How Buyers Buy: 3 Trends in Buyer Behavior that Every Technology and Software Firm Should Consider appeared first on Hinge Marketing.

As we look at our new High Growth Study 2022, Technology and Software Edition, the business challenges have changed significantly with these firms. We had 178 technology and software firms participate in this study with more than $175 billion in combined revenue and 360 thousand employees. All firm sizes were represented with mid-size firms having the largest survey participation.

The study also had good worldwide representation. While more than 60% of the responses represented United States businesses, there was strong representation from all points of the globe including Europe (36.8%), Asia (34.8%), and Australia & Oceania (21.1%)—with South America being the lowest at 15.7%.

Confidence and Stability Become the New Normal.

“Unpredictability in the marketplace” has been replaced with “Increased competition from larger competitors” as the #1 challenge. In fact, unpredictability in the marketplace drops all the way to seventh place. The #2 challenge has changed as well. It is now “A shortage of top talent.” This year, the responses seem to be coming from a pro-active or enlightened position. That is because technology and software firms, especially the high growth firms, have “cracked the code” on growth.

The new normal for technology and software firms moves away from fear and unpredictability and embraces confidence and stability. Technology buyers see the benefits and impact that technology can provide to their business growth and are willing to make a significant investment in it. So much so that the technology and software industry had the highest median growth of any of the six professional services firms that we follow in the study.

Key Findings

Technology and software firms have adapted to the new ways that their buyers buy. They realize that today’s buyers are leveraging digital assets such as email, websites, search engines, social media, and webinars to learn more about products and services and help them distinguish one vendor from another.

In years past, much of the education would have occurred at trade shows, conferences, or special events. Technology and software firms have invested the time and resources to ensure that they are getting the amount of leads they need to grow their businesses. In fact, technology and software firms lead all professional services industries in the proportion of leads generated by digital sources. While technology and software firms lead the way, they still have plenty of room for optimization: converting those leads into opportunities and, ultimately, revenue. Greater digital maturity and better reporting will put technology and software firms in a better position to generate more visibility, growth, and profits.

What Can You Learn (and Copy) From the High Growth Technology and Software Firms?

As you can see, technology and software firms are doing well. But high growth technology and software firms are doing very well. High growth firms are defined as having a compound annual growth of 20% or greater over a three-year assessment period. These are the firms that we study, and these are the firms that you should mimic. Here are just a couple of reasons why you should try to apply what these high growth firms are doing:

In the last year, the high growth technology and software firms grew significantly more than average growth firms—and dramatically more than no growth firms.

Not only did they grow more than average growth or no growth firms, they were also a lot more profitable. Just take a look at the right side of the chart below. High growth technology and software firms enjoyed high profit status (25+%) in 44% of their organizations compared to only 30% of no growth firms. A common misperception that rapid growth diminishes profitability does not seem to be the case.

This is fairly compelling evidence that the high growth firms we study have uncovered the secrets or cracked the code to generating more visibility, leads, revenue, and profitability. What can you learn from them? What should you change in your strategies and processes? Are there areas where you should re-prioritize and invest more with time, money, and resources?

Each year these firms do a few things differently than average growth or no growth firms that pay off in greater growth. In the High Growth Study 2022: Technology & Software Edition, we saw that these high growth firms leveraged a key advantage in four areas: Talent, Technology, Marketing, and Strategy.

Key Advantage 1: Talent

Most of us have been impacted by the global human resources trend economists call, “The Great Resignation.” Employees are resigning at record numbers—causing gaps in headcount and skills. The disruption can affect sales projections, product/service development, client support, ability to compete, and more.

High growth technology and software firms navigate around this potential disruption by using outside agencies, firms, and contractors. This makes sense as in many cases the projects are for a fixed period of time and do not require full-time employment to deliver them. High growth firms also are leveraging outside resources that may have more experience and expertise than any full-time employee they hire. Some of the most popular services that high growth firms seek outside help on include: marketing materials development, website improvements, graphic design, video production, and search engine optimization. All these services work to showcase content and thereby help to generate more visibility and leads.

Could you be using more outside expertise to make sure that key projects are finished, and your firm has the chance to grow a little more?

Key Advantage 2: Technology

We have seen over the last few years the move to using more technology. What we are now seeing is more use of more technology. Overall, technology and software firms have increased the number of marketing techniques they use by an impressive 22%. High growth firms have gone even further by using that technology noticeably more than no growth firms. Sometimes the difference is dramatic. For example, high growth technology and software firms use web conferencing tools 86.7% of the time compared to 60% for no growth firms. Customer Relationship Management (CRM) platforms are leveraged by high growth firms 82% of the time while no growth firms use them only 55%. This gap is really magnified when you look at email marketing usage: high growth firms (66.7%) no growth firms (35%).

High growth firms are also doing something else differently when it comes to technology. They are investing time and resources to build maturity. We use an Automation Maturity Scale within this study and across all technologies, the technology maturity of the high growth firms was higher. This maturity leads to more sophisticated processes and moves high growth firms beyond implementation and usage to reporting and analytics. They are moving closer to optimization which will only help with budgeting, growth, and profitability.

Take a look at the chart below. High growth firms use every marketing and business development tracking technique significantly more than average growth or no growth firms. This is a key advantage to growth. By having processes in place to report and analyze performance, these high growth firms are positioned to adapt and improve. They are making more informed decisions—whether that means changing programs or investing more in effective programs. This level of maturity helps all aspects of a firm’s business. The bottom line is more revenue and more profitability.

Key Advantage 3: Marketing

Interestingly, marketing investment is slightly lower among high growth firms compared to no growth firm – 13% versus 15%. Yet the high growth firms achieved better results. They significantly outperformed their peers. Why? How?

The high growth firms have figured out how to get more from their marketing and business development dollars. As we mentioned earlier, the high growth firms are more technologically and digitally mature and are using metrics and analytics to become more effective and efficient.

As the following charts shows, the high growth firms are also using more marketing techniques. They are also using these marketing techniques more frequently and more skillfully to deliver superior growth results.

One key finding we found was in the marketing priorities that high growth and no growth firms had. As shown in the chart below, while the first two marketing priorities—“Creating content” and “Brand differentiation”—rated high for both high growth and no growth firms, the other four priorities had noticeable gaps in ratings. “Website performance” was a key marketing priority for twice as many high growth firms versus no growth firms (20.5% versus 10%). The gap was even larger for “Influencer marketing. Three times as many high growth firms saw it as a marketing priority as compared to no growth firms (15.9% versus 5%). Maybe now is the time to compare your current marketing priorities to those of the high growth firms and consider adjust your strategy accordingly.

Key Advantage 4: Strategy

When many think of a firm’s growth, they often think of organic growth. While organic growth is an essential component of a firm’s growth, it is not always the only component—especially when it comes to technology and software firms. In fact, with high growth technology and software firms, merger and acquisition growth made up almost one-fourth of total growth. Our research uncovered that more than 53% of the high growth firms were part of a merger or acquisition.

The research also shows that mid-size ($5-$49.9 million in annual revenue) firms are most likely to be involved in a merger or acquisition. If you are in a senior leadership role at a mid-size technology or software firm, you will want to have a growth plan that considers a merger or acquisition. Depending on your firm’s business performance, you should have contingencies to merge, to acquire, or to be acquired. Perform some due diligence now and prepare so that you are in a stronger position to negotiate in the future. This is where a pro-active and agile strategy will help your firm grow.

A Few Final Thoughts

If you want your firm to grow more in the next 12 months, keep in mind that the battle for highly skilled talent isn’t slowing down high growth technology and software firms. Follow their lead.

Technology is driving growth and profitability. From core business processes to marketing and business development functions, high growth firms are leveraging their higher levels of technological maturity and making greater use of multiple technologies to move toward optimizing their revenue-generating performance and achieve superior results.

At every stage of the journey, marketing really matters. The high growth firms are again finding higher levels of success while spending slightly less than their no growth peers. They do it with better execution—which results in greater impact with the same marketing techniques.

There are different ways to get to growth. Mergers and acquisitions can play a key role in your firm’s growth and success. Another way to approach growth is mindset. No growth firms are concerned about unpredictability in the marketplace. High growth firms are concerned about increased competition from new firms and competitors. The new normal for high growth firms is founded on stability and predictability.

Obviously, this blog was not meant to cover the High Growth Study 2022: Technology & Software Edition in its entirety. It is supposed to act as an executive summary and guide you through some of the key data, findings, and insights. If you want to more about topics such as “The top 10 most impactful marketing techniques for high growth technology and software firms” or “The benefits of higher SEO maturity within technology and software firms,” you will want to purchase a copy of the full study.

For companies that sell to technology and software firms, you may want to consider purchasing a 12-month license of the full study from the Hinge Research Institute so that you can use part or all of the study as premium content in email campaigns, webinars, social media postings, websites, sales collateral, business development presentations, and more.

Hopefully your firm can apply a lot of the key difference techniques that the high growth firms are leveraging when it comes to talent, technology, marketing, and strategy and next year we can include you as a high growth firm in this study. Carpe diem!

The post High Growth Study 2022: Technology and Software Firms Uncover the Secrets to Growth appeared first on Hinge Marketing.

Threats and opportunities abound.

As part of the Hinge Research Institute’s ongoing High Growth Study, over 120 business leaders and marketers from technology and software firms, representing $175 billion in combined revenue, were surveyed about their top business challenges and marketing priorities for 2021. 

While there are many opportunities in the marketplace, this article will focus on the top five business challenges of technology and software companies. The results are intended to offer insight into the best approaches for driving success in the coming year.

The Top Five Anticipated Business Challenges of Technology and Software Firms

For technology and software firms seeking to stay competitive and grow during these demanding times, having a research-based understanding of how your peers and competitors view the marketplace is essential. So what are these top anticipated business challenges? In Figure 1, we see that the top challenges are quite different this year than in 2020.

Figure 1: Top Anticipated Business Challenges of Technology & Software Firms in 2021

The top three challenges of 2021 each saw an increase of at least 44% while the final two, which tied for fourth place, came down from their 1st and 2nd place positions in last year’s study. 

Let’s unpack these top anticipated business challenges from the 2021 High Growth Study: Technology & Software Edition one-by-one.

1) Unpredictability in the Marketplace

Across professional services industries, we saw a common theme when it came to the top anticipated business challenge of 2021—unpredictability in the marketplace. Yet the result here for the technology and software firms stands out still. Of all the other professional services industries surveyed, no other industry had such a high consensus on their number one issue.

With a staggering 80% increase since 2020, respondents clearly experienced the widespread changes introduced by the COVID-19 pandemic. Moreover, rumblings of public policy and regulatory changes loom large in the minds of business leaders and marketers in the tech space.

To adequately battle the rising unpredictability in the marketplace, it’s more important than ever that firms understand their clients. When competing for business opportunities, it’s important for firms to differentiate yourself—to find ways of setting yourself apart culturally or technologically. As with innovation, finding top differentiators takes research and deep insight into how your firm stands out from others. Firms must talk to their clients, employees, and partners in order to find out what has set them apart in their collaborators’ eyes, and what hasn’t.

2) Changes in How Buyers Buy Your Services

Following uncertainty in the marketplace is how 56.8% of technology and software firms identified the ways buyers go about buying services as a top challenge. Here again we see a sharp increase from the previous year’s study as this category was not even in the top five challenges of 2020.

Most firms understand that more and more buyers turn to digital channels to find solutions for their work-related business problems. In fact, this sentiment is backed up by another Hinge Research Institute study Inside the Buyer’s Brain where it was found that turning to search engines was the number one method used by technology buyers. Yet, how many firms have continued to neglect improvements to their websites, SEO, and content marketing strategies? Quite a few.

In Figure 2, we see the top methods technology and software buyers use to evaluate different service providers. Notice how the number one method used to evaluate a service provider is by examining their industry knowledge and expertise. When buyers search for issues that you help solve, will your firm be found? Does your website include a resource hub that demonstrates your specific expertise? And finally, are your firm’s experts active in showcasing their knowledge at industry specific conferences, virtual events, or podcasts? Are they actively using social media? 

To keep up with the increasingly competitive marketplace, your firm needs to be found where your buyers are looking. Again, research on your clients and competitors can guide you on how buyers are changing today.

Figure 2: Top 5 Methods Buyers Use to Evaluate Technology & Software Firms

3) Automation and Artificial Intelligence

Also leaping into the top five anticipated business challenges for the first time, and mentioned by 52.3% of technology and software firms, are the emerging technologies behind automation and artificial intelligence (AI). This challenge is not unique to the tech industry. In fact, automation and AI was the third highest anticipated business challenge ranked by firms across the professional services spectrum.

We found across our High Growth Study that technology which allows firms to automate aspects of their core business or marketing and sales initiatives stood out as a telling example of where high growth firms hold a competitive advantage over their slower growing peers. Diving deeper into the 2021 High Growth Study: Technology and Software Edition, we see below in Figure 3 that high growth firms are more likely to use automation in a more sophisticated way.

Figure 3: High Growth vs. No Growth Firms with Automation Maturity

The innovative products that give high growth firms this competitive advantage are developed right here in the technology and software industry. But for some firms, there is still a large mountain to climb in terms of maturing their adoption of these technologies.

4 & 5) Increased Competition from Larger Competitors and New Competitors

The technology and software space is one of the fastest changing industries in all of professional services—seeing a constant influx of new competitors entering the marketplace or large competitors branching into new service areas. In this year’s study, there was a tie for fourth place with 47.7% of respondents selecting both increased competition from larger competitors and increased competition from new competitors. These two challenges were the top two challenges from the 2020 High Growth Study: Technology and Software Edition.

When we segment these respondents into high growth firms and no growth firms (see Figure 4) there is an interesting distinction with high growth firms being more concerned with new competitors (56.4%) while no growth firms perceive larger competitors as a challenge (64.3%).

Figure 4: Increased competition from new and larger competitors distinction

Both of these challenges remaining in the top five year-over-year speaks to the hyper-competitive nature of the industry. New competitors can often be a threat due to some proprietary technology while larger firms who already operate at scale have an increased ability to outspend and outmaneuver their smaller competitors. Mergers and acquisitions (M&A) also play an important role in the marketplace with over 50% of high growth firms seeing a portion of revenue come from M&A activity.

Couple these challenges with more data from our Inside the Buyer’s Brain study, that technology and software buyers are 44% less loyal to their current services providers than in 2018, and you have a recipe for exceptional business stress.

For many firms there is pressure to increase their investment into their marketing. But increased investment alone isn’t the path to growth. With so many competitors swirling around the same buyers, technology and software firms must differentiate themselves and have the marketing automation tools that help them rapidly connect with prospects to close more deals.

Conclusion

Saying that the technology and software marketplace is competitive is more than an understatement. The top anticipated challenges of 2021 speak to a marketplace that is unpredictable and flooded with competition. More than ever firms need to concentrate their efforts on a strategic marketing strategy that includes top-to-bottom analysis of their clients and prospective buyers. Such research can guide firms as they increase their marketing investments and refine their positioning in the marketplace.

The post The Top 5 Anticipated Business Challenges of Technology and Software Firms appeared first on Hinge Marketing.

The Hinge Research Institute’s newly published 2021 High Growth Study: Technology and Software Edition looks at and helps both types of firms. It also examines firm size based on revenue and number of full-time employees. Technology and Software firms from around the world were sampled—so chances are, your firm is represented.

About the Study

The study showcases industry trends within the larger context of other professional service industries including: Accounting and Financial Services; Architecture, Engineering, and Construction; Consulting; GovCon; and Legal. It then dives deeper into comparing the Technology and Software “high growth” firms (those having a compound annual growth rate of 20% or greater over a three-year assessment period) with average and no growth peers. There was good representation across most firm sizes. The firm size of Technology and Software (T&S) firms that participated in the study are broken out by 2020 revenue as shown in Figure 1.

Figure 1: T&S Firm Size Based on 2020 Revenue

Purchase the 2021 High Growth Study: Technology & Software Edition

More than 120 T&S firms participated in the study with a combined revenue of $175 billion and more than 400,000 employees. While, as shown in Figure 2, the Technology and Software industry as a whole is leading all other professional services industries in terms of overall revenue growth—there is still plenty of room for improvement.

Figure 2: Median Growth Rate by Industry

What Key Challenges are T&S Firms Facing in These Unprecedented Times?

 For the high growth Technology and Services firms, not surprisingly, unpredictability in the marketplace was the top challenge—followed by changes in how buyers buy their services. In fact, changes in how buyers buy services—marks an increase of 46% from last year’s study. (See Figure 3.) Interestingly, increased competition from new firms and increased competition from larger competitors, which topped the list of business challenges last year, fall to fifth and fourth place in this year’s study. The need for new skills, which ranked high on other industry business challenge lists this year, actually dropped from third place in 2019 to sixth place in 2020. These are challenges that are here now and for the next few years.

Figure 3: Anticipated Business Challenges Over the Next 3-5 Years

In this article, I will highlight some of the study findings that show what Technology and Software high growth firms are doing differently in light of today’s unpredictability and uncertainty.

Insight #1: High Growth Technology and Software Firms Conduct More Research

As shown in Figure 4, high growth Technology & Software firms conduct research significantly more than no growth firms.

Figure 4: T&S Firms That Conduct Research On Their Target Audience

But, more importantly, Figure 5 shows that high growth firms are more likely conduct or leverage research on a quarterly basis. With this regular cadence of research, high growth T&S firms are in better positions than other firms when it comes to adapting to changes in buyer behavior and identifying why and where unpredictability occurs in the marketplace.

Insight #2: T&S Firms Spend More on Marketing Budgets to Ensure Growth

Until recently, high growth Technology and Software firms’ marketing budgets were comparable to slow or no growth firms. But today, high growth T&S firms are investing significantly more in marketing—more than 22% of firm revenue and twice as much as no growth firms. This budget increase allows T&S to leverage more digital marketing to accommodate changes in buyer behavior and invest more in technology. With these dramatically larger budgets, one can partly see how and why some Technology and Software firms grow faster and more than most others. (See Figure 6.)

Figure 6: T&S Marketing Budget (% of Firm Revenue)

Insight #3: High Growth T&S Firms Tend to Use Marketing Techniques More Intensely

As Figure 7 shows, high growth T&S firms and no growth firms employ email marketing campaigns at about the same rate (63.9% vs. 64.3%).

Where behaviors dramatically change is in the next two techniques on the list. High growth T&S firms use digital ads more than six times as often as no growth firms (44.4% vs 7.1%).

The gap grows even larger with the next technique: promoting thought leadership on social media. High growth firms use this marketing technique 22 times as much as no growth firms (44.4% vs. 2.1%).

Purchase the 2021 High Growth Study: Technology & Software Edition

As you can see, there are certain marketing techniques that high growth firms use intensely that no growth firms barely use. Another example is the live product and service demonstration. Take note. These techniques are getting high growth T&S firms the visibility and engagement that no growth firms never see or experience.

Figure 7: Top Marketing Techniques Currently Used by T&S Firms

Insight 4: High Growth T&S Firms Orchestrate All the Marketing Parts More Effectively

Now let’s take a look at the top 10 most impactful marketing techniques used by high growth T&S firms. (See Figure 8.) At first glance, both high growth firms and no growth firms appear to use a lot of the same techniques (with the notable except of public relations/earned media). So how is it that high growth T&S firms reap more benefit from these techniques?

They orchestrate all the parts more effectively.

The right marketing mix, grounded in the right research, combined with the right positioning make for a powerful force in the marketplace.

Figure 8: Top Marketing Techniques for T&S Firms Based on Impact

Insight 5: High Growth T&S Firms Leverage Technology and Benefit from Digital Leads

The 2021 High Growth Study: Technology and Software Edition clearly shows that high growth Technology and Software firms are two to three times more mature with general business, core business, and marketing & sales automation. This maturity pays off as their technology automatically adapts and optimizes to changing business needs. The strategy is built around the technology—leading to better effectiveness and efficiency throughout high growth T&S firms. (How does your firm compare with automation maturity?)

Purchase the 2021 High Growth Study: Technology & Software Edition

Greater levels of technology optimization are reached—to the point where nearly 50% of leads come from digital sources as shown in Figure 9.

Figure 9: Proportion of Leads from Digital Sources

These are just some of the findings and insights from the 2021 High Growth Study: Technology and Software Edition. The study goes into the impact of COVID-19 on Technology and Software firms, the role of mergers and acquisitions, and where high growth T&S firms are focused for the next year.

The Bottom Line

Even in these times of uncertainty, high growth Technology and Software firms are adapting to changing buyer behaviors, identifying and leveraging sales opportunities, and leveraging digital marketing and technology to generate more leads. These high growth firms realize—and invest in—the principle that the firms that pivot first, and have the best information, will undoubtedly grow and have the best competitive advantage.

The data is in. What can you learn from these high performers? Where do you need to make changes with your marketing and business development? How far can you take your firm with these findings and insights? Now is the best time to learn from the firms that are leading the way in your industry.

The post New Research: How and Why Some Technology and Software Firms Grow More appeared first on Hinge Marketing.

Why This Study is Needed

Buyers of technology and software services have a well-established reputation of being fickle on price. To a degree, they come by it honestly. Technology itself has allowed providers to enter the market en masse with feature-rich yet low-cost solutions. With so many firms looking like they do the same thing as the next guy on the block, competing on price shouldn’t be a surprise.

Add the current pandemic to the mix, and it almost feels like anyone’s guess when it comes to what it will take to win new business.

Fortunately, though, there is a path forward for providers of technology and software solutions for competing less on price and more on criteria such as expertise and innovation. The key is understanding what buyers think today, and what trends will impact how they learn and make decisions 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 Technology and Software Services

In this breakout report, we explore the challenges technology and software services 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 T&S results to other professional services verticals such as Consulting, AEC, and Accounting & Financial services.

Sampled Both Buyers and Sellers

Using phone interviews and online surveys, we researched 191 buyers and 60 sellers of technology and software 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 Technology & Software Services firms and puts them in the context of three other major professional services groups:

Key Findings

The results of the study are organized around four questions that capture the most impactful steps in a Technology & Software buyer’s journey.

What Are the Buyers’ Business Challenges?

Most professionals believe they understand the challenges their potential clients face. And while this doesn’t hold true in most industries, the data validates that belief for technology and software services firms.

Unlike the other professional services industries, technology & software providers are well attuned to the issues their clients are facing—lending providers a potential edge when it comes to messaging the value of their services.

The key of course is to understanding the many different nuances of the buyers’ stated concerns so that your message stands above the noise of other providers saying they can solve the same problem you can solve.

How Do Clients Feel About Their Service Providers?

Most T&S buyers (56.6%) 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 23% in just two years – the highest across all industries sampled in the study.

There is another means of measuring how clients feel about their providers: relevance. Fortunately for T&S providers, 42% of buyers rate providers as “highly relevant” to their top organizational challenges – and this has improved 30% over the last 2 years.  This finding is significant since 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 80% more likely to be highly recommended by their existing clients. High relevancy ratings are also associated with a 30% higher likelihood of having highly loyal clients.

How Do Buyers Search for Service Providers?

When buyers of technology and software services need to find a solution to a problem they’re trying to solve, they are more likely to conduct a web search than any other strategy. This tendency underscores the critical role of both your website (where the solution can be displayed) and SEO (how your website gets found) in the buying process.

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

LinkedIn is used by nearly 85% of buyers, making it the dominant social media platform.

How Do Buyers Evaluate Service Providers?

While T&S providers have long relied showcasing relevant past experience to help seal the deal, we are seeing the limits of this strategy. While still an important factor, its role in the final selection process has decreased by 30% over the last few years. Expertise on the other hand, rising by almost 50% as a top deciding factor, carries nearly the same weight as ability to deliver results and competitive pricing. Interestingly, innovation wasn’t even mentioned in previous studies as a top deciding factor – and it takes the #2 slot this year.

What Does This Mean for Your Firm?

The T&S industry joins the rest of professional services in that the industry as a whole 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.

The pressure is on when it comes to understanding specific buyer challenges. Sellers seem to be aligned at a high level on clients and their challenges. However, when pricing figures so prominently in the final selection as it does in the T&S industry, differentiated and relevant messaging becomes the non-negotiable when it comes to standing out above the noise.

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.

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”.

Changes in buyer behavior are reducing the impact of traditional approaches. Buyers are changing their behavior at a fast clip. Many traditional business development strategies no longer work as well as they used to. Buyers learn in ways that are fast and easy.  They 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.

The post How to Win Business When You’re Not the Lowest Cost Provider appeared first on Hinge Marketing.

But which challenges are most pressing for technology services firms, and which initiatives are they prioritizing in order to get ahead? Hinge’s ongoing High Growth Study is tracking those trends — and identifying the evolving strategies and tactics favored by high-growth tech firms compared to their slower-growing peers.

Download the 2018 High Growth Study: Technology Services Edition

Consider, for example, the top five marketplace threats cited by technology services firms.

When compared to results from across other professional services industries, increased competition from both legacy players and newcomers is a shared perceived threat. This will only grow to more of a challenge as more and more competitors enter the technology marketplace to vie for a limited number of buyers.

There’s a major difference between technology services and other industries, however: the two-sided impact that automation and AI brings to the fore. One the one hand, these innovations help firms bring new and better offerings to market that can be delivered faster/better/cheaper than ever before. On the other, the very innovations that help propel legacy firms forward also make it easy for newcomers to enter the market, who either can or purport to match the offerings of more mature firms – thus the downward pressure on price as the marketplace crowds and feels, at least to the buyer, more commoditized.

6 Essential IT Marketing Strategies

How do tech services firms address these threats and build competitive advantage? We find there are six key strategies that can help firm win:

1. Research

By conducting research on your marketplace, you’ll know your clients’ needs and expectations better — which puts you in a position to serve them more effectively. Market research also gives you insight into how your processes are performing. You can develop a more objective, thorough understanding of which aspects of your firm are performing best, as well as insight into which services you should offer.

This is a philosophy that should be familiar to many in the technology services industry: with more data, you can make more effective decisions. Our own research has shown that firms that conduct systematic research on their prospects and clients grow three to ten times faster – and are up to two times more profitable.

2. An Impressive Website

In the past, many tech firms grew by word of mouth. The technology almost sold itself, so they didn’t have to market much – which is why many tech firms have poor websites with poor user experiences.

These days, though, particularly in the technology services industry, your website must be impressive. For clients, it is a direct indicator of your credibility. Our research on referral marketing shows that an unimpressive website is among the top reasons that buyers rule out referrals.

But your website isn’t just a tool to help you avoid getting ruled out. It serves as the hub for your online presence, joining expert content, explanation of your services, social media platforms, and more. That’s why, according to our research, 80% of buyers use your website to check you out – making your website the most common source for information about your firm.

Remember, too, that your website has to look impressive however it is displayed, whether on a phone or a tablet or a desktop. Mobile browsing has become so important that Google is making mobile-friendliness a factor in search rankings. For these reasons, you should ensure that your site leverages responsive design to adapt to the form factor of a visitor’s device.

3. Cultivating Visible Experts®

Remember the importance of client education? In addition to satisfying an audience demand, producing educational content helps build the profile of individual experts within your firm. In fact, this process is essential for technology firms. By building the profile of professionals within your firm, they can eventually become Visible Experts – the sort of industry rock stars who headline conferences, attract both business and talent, and come to define a firm.

Visible Experts are such a powerful asset because of the “Halo Effect.” When audiences view one of your experts as authoritative, that glow transfers to the firm as a whole. Your firm’s increased status transfers in turn to other individual professionals within the organization, who can use the added credibility to build their reputations as Visible Experts. It’s a positive feedback loop, and it’s a powerful advantage for technology services firms.

4. Search Engine Optimization (SEO)

Like the technology services marketplace as a whole, SEO is constantly evolving – and it’s crucial to keep up. Yesterday’s best practices can become today’s cause for penalty. But in a hypercompetitive environment where visibility is critical, effective use of SEO is mandatory.

What do firms need to know about SEO? The key is this: “on-site” SEO (in a nutshell) increases your site’s relevance through strategic use of targeted keyword phrases associated with your services and expertise, in combination with a strong technical SEO foundation on your website.

Download the 2018 High Growth Study: Technology Services Edition

“Off-site” SEO increases your site’s perceived authority through earned links, social media, brand mentions, and external thought leadership pieces like guest articles. For a more detailed plan of action, we’ve developed an SEO strategy for B2B firms.

5. Content Marketing

Again and again, we return to educational content – and that’s because it is the engine behind your entire IT marketing strategy. In fact, the “content funnel” is key for IT services marketing, attracting relevant audiences and working to drive closer and closer engagements that qualify leads and ultimately generate new business.

Content marketing encompasses a variety of content types across a variety of channels, including your own web properties – your website, blog, and social media presences – as well as other web properties. Through media, professional partners, content syndication, and guest blogging, you can spread your expertise to a range of new audiences.

And this is the core goal of content marketing. By educating target audiences and addressing their challenges through content, you will build credibility and visibility that will ultimately lead to new business and to growth.

6. Social Media

It’s a fact: social media is a key factor in the growth of B2B firms. It’s an essential channel for not only networking with people in the marketplace and participating in industry conversation, but also sharing your content and driving engagement with your audience.

As we discussed previously, a more mature social media environment means new challenges, and drives the need for new rules. In order to take advantage of the benefits of social media, IT services firms must learn how to do it effectively. At its best, social media is an environment to demonstrate your leadership in the industry while engaging with other expert content and sharing your own.

With the six strategies above, your firm will be well-placed for IT marketing success. Do you have thoughts on the trends reshaping the technology services marketplace? We’d love to hear your perspective in the comments.

Additional Resources:

• Our Lead Generating Website Guide details how your firm can generate qualified leads with its website.
• Ensure that your website and content gets found online with Hinge’s SEO Guide for Professional Services.
• Explore how successful technology firms are using online marketing to grow faster and be more profitable, download the Online Marketing for Professional Services

How Hinge Can Help:

Hinge has developed a comprehensive plan, the Visible Firm^® to address these issues and more. It is the leading marketing program for delivering greater visibility, growth, and profits. This customized program will identify the most practical offline and online marketing tools your firm will need to gain new clients and reach new heights.

The post IT Marketing: What Every Technology Services Firm Should Know for Higher Growth appeared first on Hinge Marketing.

Download the 2018 High Growth Study: Technology Services Edition

A Growing Industry

Once again, technology companies led all professional service industries in revenue growth, though it has slowed in recent years. The median annual growth rate for technology services firms in 2017 was 11.4 percent, down from 14.3 percent in 2016—a whopping 20 decrease. The next fastest growing professional services segment was the consulting industry, which lagged by two full percentage points.

Technology companies grew faster than the all-industry average for the study. Median annual revenue growth across all industries was 9.1 percent in 2017. However, technology firms also saw a sharper year-over-year decline in revenue growth, falling 20 percent while professional services as a group fell only 9 percent.

Meet the High-Growth Firms

Although technology firms outperformed all other professional services industries, an elite group of firms posted gains that were higher still. These high-growth firms—about four in 10 of those surveyed by the study—saw annual median revenue grow by more than 43 percent. That is more than four times the average technology firm.

Not surprisingly, most of these high-growth companies are micro firms making less than $1 million annually and small firms billing $4.9 million or less. Together, these two segments account for 72.5 percent of the companies in the high-growth category. But larger firms aren’t left out of the high-growth bonanza — in fact, they account for more than one in four high performers.

So how do these technology firms achieve and sustain these growth levels? That’s one of of the questions that the 2018 High Growth Study set out to answer. The truth is that these companies see the competitive landscape and the role of marketing very differently than average- and low-growth firms.

For example, no-growth firms consider their need for new skills and a shortage of talent as their top threats as they move into the future. High-growth firms have an altogether different list of concerns, including increased competition, downward price pressure, unpredictability in the marketplace and the threat posed by automation.

Of course, high-growth firms react differently to these threats, as well. While most technology firms are trying to make businesses and expertise more visible, high-growth companies are three times more likely to adopt sophisticated strategies such as productizing their services. They are also almost twice as likely to conduct research on their target markets. They are more likely to specialize, and they enjoy a skills advantage over no-growth firms in seven key business development areas — from public speaking to writing to social media networking.

High-Growth Marketing

High-growth firms also take a different approach to marketing. While they embrace traditional marketing techniques such as networking at conferences, sponsoring events and distributing collateral, they are far more likely to embrace digital marketing techniques, particularly those that involve educating their audiences, such as demos, blogging, developing downloadable content and publishing original research. Guest blogging and speaking at targeted events yield a particularly high return for these firms.

Download the 2018 High Growth Study: Technology Services Edition

What does this mean for your tech business? Check out the free Executive Summary — or buy the full report — and compare your marketing practices to those of the high-growth elite. By examining how high performers market their firms, your company can uncover strategies, techniques and tools that will make your marketing more effective and cost efficient. And you will learn which techniques no longer produce results in today’s marketplace, so you can stop wasting time and money.

Download the free executive summary today and start taking your firm to the next level of sophistication, growth and profitability.

Additional Resources:

• Download the Executive Summary of the 2018 High Growth Study: Technology Services Edition and learn what propels high-growth firms into the stratosphere.
• Learn how to uncover your firm’s true differentiators with Hinge University‘s Differentiation, Positioning & Messaging
• Purchase the full, 88-page 2018 High Growth Study: Technology Services Full Report — and get the most detailed look at the industry’s marketing practices. You simply can’t get this information anywhere else.

How Hinge Can Help:

Let Hinge help you create and implement a research-based strategy to increase your firm’s visibility and growth. Hinge’s Visible Firm^® Program is the leading marketing program for professional services firms that want to market themselves like industry leaders. Ask about it today!

The post Key Findings from the 2018 Technology High Growth Study appeared first on Hinge Marketing.

Expertise is the number one criteria prospects and clients use to judge and vet firms. So here are some tangible reasons to have visible expertise on your radar.

Transcription

Hi, I’m Liz Harr, and in this post am gonna be sharing some thoughts on something that should be on the radar of every tech services firm out there. And that is something called visual expertise. One reason that this should be on your radar is because expertise is the number one criteria prospects, clients, your audience are using to judge and vet firms like you. It’s at the very top of their list. So that’s the first reason.

[bctt tweet=”Expertise is the number one criteria prospects and clients use to judge and vet firms.” username=”HingeMarketing”]

The second reason that should be on your radar is visible expertise drives referrals. We all know how important referrals are to growing our business. And when we ask referral sources how they are more likely to send a referral your way, they mentioned the vast majority of the time is around visible expertise. So visible expertise, or being an expert in your field and having visibility for that drives business and drives referrals.

There’s a couple other tangible benefits that I’d like to mention beyond just bringing in new business and referrals. One is profitability and growth. We find time and again when we research high growth firms that they have taken very deliberate steps to cultivate visibility around their expertise. Marketing your expertise is a much more cost effective endevour than some of the other traditional means so it lands itself well to higher growth and higher profitability.

Download the Visible Expert Book

Another benefit is around talent. When you are seen as a leader and the expert in your field, it attracts top talent. Top talent wants to align with the leaders in their space.

And finally, if those are a little too abstract for you, here is a very tangible reason to have visible expertise on your radar. Take a look at this chart. What I’m showing you here is what we know from our research about billing rates and how having visibility around your expertise impacts the billing rates your people can command. If you look at the bottom of the chart here on the left you’ll see the average billing rates for the average professional services professional all the way up to a level five professional who has commanded a national or global household status kinda visibility. They can command 13 times higher than the average professional billing rate. But go all the way down to the lowly one, and this is a professional services executive or firm that has very niche visibility in a very small and defined community, but it’s still visible for expertise. And even at that level, they can command twice the billable rates that the average profesional can.

So the point I really wanna drive in here is visible expertise is the thing that will get your firm to the next level because expertise is what drives new business and referrals.

Thank you.

The post Why Visible Expertise is Important for your Tech Firm [VIDEO] appeared first on Hinge Marketing.