Every year, the Hinge Research Institute examines how the fastest-growing accounting firms have achieved consistent growth and prosperity in its High Growth Study. This year’s study showed some surprising changes in the methods that firms are using to track marketing and business development metrics, and it suggests that even high growth firms could benefit from a commitment to a digital transformation.
To understand just how surprising the results of this year’s answers on marketing and development metrics were, it helps to remember another report the Hinge Research Institute recently released. In Inside the Buyer’s Brain, the Institute’s research showed that consumers of professional services relied on web searches for information on work-related topics more than any other source except for recommendations from peers or colleagues. In other words, when a potential client is looking to solve a problem that might require help from an accountant, that person is searching the web to find out who has posted insightful content on the issue.
How are firms planning for marketing and business development?
So, at a time when potential clients are relying ever more heavily on web content that a firm could easily track in order to more effectively target its marketing and business development efforts, what metrics are firms using as the basis for their marketing plans? Astonishingly, one-third of no-growth firms in this year’s study, and even a quarter of the high-growth firms, report using no metrics at all in their planning. Among those that do report use of metrics, the leading source for high-growth firms was historical data.
With so much client interest being generated by web searches, how many firms relied on information from their online platforms to generate leads? Only about a quarter of the high-growth group tracked page visits and followers on social media. A similar percentage of the high-growth group utilized analytics from their website and/or other social and digital media to score leads and create prospect lists. This failure to rely on real-time data generated within a firm’s own web pages and social media accounts suggests there may be room at the top among the high-growth firms for those firms that embrace a more complete digital transformation.
How can digital transformation help?
Every accounting firm has advanced by leaps and bounds in technology over the last few decades, as spreadsheets and tax return preparation software have revolutionized the practice. However, merely implementing and updating the most recent software will only serve to help slow the rate at which a practice falls behind in today’s competitive service economy.
“Digital transformation” refers to the process of leveraging advanced digital technologies to create new or vastly improved business processes, organizational cultures and customer experiences to meet changing business and market requirements. We’re talking here about building systems within the practice that support the types of automated dashboards, real-time updates and faster feedback that today’s clients demand.
As noted in the Digital Transformation Imperative, less than 10% of the accounting firms studied felt like they had completed a digital transformation. Almost two-thirds of those who participated indicated they had established a plan for such a transformation and were in the process of implementing it. But at the time of the survey, the accounting firms registered one of the lowest “digital maturity” scores of all the professional services sectors that participated.
The study showed the vast majority of firms that undertake a complete digital transformation achieve substantial increases across multiple key performance indicators like operational efficiency, client satisfaction and awareness. Over 60% of the firms surveyed showed growth in annual revenue and profitability after the transformation, even taking into account the substantial upfront costs. Given the relatively low digital maturity scores among accountants, the report suggests that those who can act quickly to implement this transition can gain a competitive advantage over firms struggling to adapt.
Transforming a practice
Accounting firms that implement digital transformations in their own offices also become uniquely qualified to support similar processes in other businesses through client advisory services. The study showed that experienced consultants can have a significant impact on the outcome of a digital transformation. Firms that rely on a consultant for support are eight times more likely to rate their outcome as “highly successful” than firms that don’t. That’s an important factor for firm leaders to remember as they plan their own transformations, and a key selling point for those who want to build on their own experience to support transformations among their clients.
Firms that reach a high level of digital maturity benefit from complete and consistent data across all areas of the practice, including marketing and business development. Decision makers have access to data on current client needs as well as the interests of prospective clients expressed through content views on the web and social media platforms. Of all the professional services surveyed, accountants are best positioned to grow their own practices through digital transformation and to share the knowledge and experience gained through those transformations with clients looking to make similar improvements.