Four habits of fast growth firms
No 3 in a series titled ‘Herding Cats’, in support of senior partners everywhere.
Not surprisingly, one of the pre-occupations for the typical managing partner of a professional services firm is how to drive business growth. In this article Chris White examines some recent US research that highlights the key behaviours of very high growth US-based professional service firms. What can we learn?
The NatWest UK Legal Benchmarking Report indicated a 5% growth in fees per equity partner over 2016-2017. A similar report looking at US professional service firms (Hinge Marketing 2017) noted an 8% growth in the same period for law firms and 9.6% for accounting firms. In both cases, these rates are modest compared to the 30-40% fee growth rate being achieved by ‘high growth’ US firms, including some technology consulting businesses.
Clearly the US and UK are different markets, but there has to be value in looking more deeply at what some of these ‘high growth’ US firms are doing to generate such enormous revenue growth. I’ve looked into the Hinge Marketing work and have distilled my findings across all professional service sectors into four brief observations
No 1 – It’s not about you…it’s about the client
When you are giving your elevator pitch to a potential client, or honing your brand messaging for your website, stop talking about your “deep experience”, your “superior expertise”, how “talented” your staff are and how focused you are on “excellent client service”. Everyone says all of this, all the time. It washes over the client. In-fact there is other research that suggests that while clients believe you, it actually just confirms you are exactly the same as everyone else. The point is, you wouldn’t be at the party if any of this wasn’t true.
High growth firms talk explicitly about “delivering clients’ desired outcomes” and the “results that can be delivered for the client”. They refer to being “flexible” and “adaptable”. Their marketing messages focus much less on qualifications, experience, track record. They spend time working out what they can do NOW to make their client’s life easier TODAY, and proactively present that to the client.
No 2 – Hands-on marketing management
While most firms’ Managing Partners worry about the prevailing market conditions and the ability of the firm to attract and retain staff, MPs of high growth firms concentrate the majority of their time on managing marketing, managing for growth, and ensuring that the focus stays on ‘working’ clear and well-researched lists of target clients.
It’s a no-brainer really but I’ve seen partners establish a list, but at the slightest sign of push-back from a client, or from a referrer, or there’s an established incumbent – the reasons are endless – they give up. Alternatively, firms invest tens of thousands in sophisticated CRM systems and then don’t use them properly – it’s an expensive way of doing the same thing.
No 3 – Targeted investment
The research confirms that firms that invest in marketing do tend to grow faster than those that don’t – but it’s more complicated than that. In fact the fastest growing firms spend slightly less than other firms on marketing, but they spend it in a different way.
- 82% of potential clients judge your firm on the basis of your website before deciding to talk to you (yes, it’s now as high as that!). High growth firms invest very heavily and consistently in their web presence and digital marketing – it is the focus of their whole marketing programme.
- High growth firms are inclined to hire outside marketing and business development experts for specific tasks and roles as they appreciate the value that genuine expertise can bring.
- High growth firms focus on drilling home a key set of brand messages – to the point that they train their people and partners to deliver these ideas into the market. They are also good at cultivating partners to take on marketing and sales roles.
- Thought leadership plays an anchor role in the development of their website and lies at the heart of their marketing programme. Importantly, it’s not thought leadership that attempts to demonstrate how clever they are, rather it’s designed to help clients deal with issues and problems. It provides answers, not simply more questions.
No 4 – Referrals are a bi-product
Many partners rely on their close network of contacts to supply them with work. They work a warm list of intermediaries and loyal clients. There’s nothing particularly wrong with this, it’s just that high growth firms tend not to have this as a focus. Of course, high growth firms receive referral work. In fact, 10% more than other firms, but it’s as a bi-product of all the above. It comes as a matter of course, rather than the firm relying on it. Partners are too busy working their cold target lists to worry about their list of mates who will probably give them work anyway. I suppose the point is they are a comfortable distraction.
Conclusion
It’s at this point that we say, “this isn’t rocket science”. Indeed, it isn’t. The keys to higher growth are here, but they require a clear vision (and plan) that partners genuinely buy into; personal skills to support their endeavours, investment in genuinely professional marketing and a degree of focus (and, thus, sacrifice of pet projects) that is rare.
It also requires a burning platform, a compelling reason to change. Buying growth through consolidation continues, but what happens when there are no more quality firms to buy? The intensity of focus suggested by this research may be the only option.
You need to have a solid and determined commitment to stick to the plan, face down distractions, and a strong disciplined approach to keep partners to the task. Very rare. When I think of firms that have made step-changes in their strategy and approach to business development, it’s invariably with external support. Someone who can dispassionately present the options, set out the journey ahead and then keep partners to the plan without being distracted.
No 1 in a series titled ‘Herding Cats’ – Round partner pegs in round partner holes
No 3 in the series ‘Herding Cats’ – Four habits of fast growth
No 5 in the series ‘Herding Cats’ – Social media: A critical BD tool or a busted flush?
Professional Services Specialist
35 years-experience of advising and working at senior levels within professional service environments. From Global BD Director with Turner & Townsend to Communications Director for Grant Thornton, from international BD roles within PwC Consulting, as well as a range of interim and consultancy roles. Please contact me for a no obligation perspective on alternative ways to herd your cats.