5 Industry Trends from the 2020 High Growth Study of Consulting Firms

Posted by Guest Author on March 30, 2020

Digital Transformation

A year has passed since the Hinge Research Institute released their High Growth Study – Consulting Edition via live webinar with Deltek. This week, we released an all-new 2020 edition of the study, so we thought this would be an ideal opportunity to look back and see what’s changed.

How has the consulting industry evolved since last year’s study? What do high-growth firms do differently to identify new growth opportunities? And what adjustments and achievements have those high performers made in the past year?

Let’s find out.


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Tuesday, March 31, 2020 at 2:00 PM ET

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Trend 1: Growth Rates Are Slowing

High-growth consulting firms in the 2020 study grew at a slower median rate than those the year before (See Figure 1). In fact, growth rates were down in all three growth categories –-no-growth, average-growth and high-growth. Nevertheless, at a 41.8% median growth rate, these high flyers far outperform average growth firms. Average firms, on the other hand, held steady, dipping a negligible 0.2 percentage points. Consultancies on the bottom end of the scale in the no-growth category however, contracted more than five percent, a painful retrenchment.

Consulting Firm Median Growth Rate by Growth Category

Trend 2: Top Business Challenges Are Reprioritized

Like any business, consulting firms face a wide range of challenges and threats. But in conditions when unemployment rates are low and the business environment is relatively strong, business priorities have evolved.<./p>

Over the past year, high-growth firms’ top business challenges have changed in subtle but potentially significant ways (see Figure 2).

High Growth Firms' Top 3 Business Challenges/Threats

What explains the shifts in these perceived threats? Undoubtedly, a tight job market has put the spotlight on recruiting, bringing the talent shortage from #3 to #1.

Because most consulting businesses can be started with minimal investment and little overhead, many new firms enter the market every year. The most successful of these startups can put the pressure on established businesses, especially those that have failed to innovate or lost their growth momentum. So that explains #2 in the 2020 list, down just a notch from 2019.

#3 on the 2020 list is actually up just one spot from its place in the 2019 study, so its appearance isn’t terribly unexpected. With a rash of acquisitions in recent years, the consulting industry is seeing a lot of consolidation—and the rise of more mega-firms that offer an ever-expanding breadth of services. These looming giants can cast a long shadow and make any modestly-sized firm nervous.

Trend 3: Marketing Focuses on Content

It’s always enlightening to compare the marketing priorities of low-growth firms to those of the industry’s super-performers (see Figure 3). But this year, it is remarkable to see how much those priorities have changed just within the high-growth cohort!

Top 5 Marketing Priorities (% of consulting firms)

Here are a few observations when we compare these two annual charts:

  • Content marketing has really come of age in the consulting industry. It is the leading priority of both high-growth and no-growth firms. And firms are clearly concerned about how they are going to feed the content machine. In fact, 4 of the top 5 priorities of high-growth firms are directly involved in delivering a content marketing program
  • Differentiation, the lone non-content marketing standout, is a perennial fixture in this top-5 list—and a key component of any high-growth initiative. 
  • Publishing original research, which didn’t appear at all on last year’s priorities list (only a small part of which is shown below), debuts at #5 in the 2020 study. This type of research makes excellent fodder for original content, and it provides a valuable point of differentiation for the firms that conduct it.

Trend 4:  Top Digital Marketing Techniques Hold Steady

Overall, there was little significant movement in the highest-impact digital marketing techniques. What worked best a year ago is still working today. By now, most marketers are using multiple digital marketing techniques to reach current and future business prospects. And knowing what we know about high-growth firms’ marketing priorities (see Trend 3 above), it comes as no surprise that they get the most impact from educational, content marketing techniques, such as webinars, live demos (usually presented online) and original research.

High Growth Firms' Top 3 Traditional Marketing Techniques by Impact

Two items appear on both the 2019 and 2020 high-growth top-5 lists: live demos and case studies. And these two items stay in pretty much the same spots on their respective lists. Publishing original research slips a notch or two, but the numbers are so close the differences may not be statistically significant. Educational webinars, the new list topper, was in a tie for 6th position in 2019, so its rise is not huge news.

Trend 5: High-Impact Traditional Marketing Techniques Remain Consistent

The best performing consulting firms don’t rely on digital marketing techniques alone—they use the best of traditional techniques, too. Figure 5 lists the three traditional techniques that had the greatest impact in the two most recent studies. Just as in the digital techniques list, the change in perceived impact has been relatively small. The top two tactics switched places, with assessments/consultations edging out nurturing prospects with phone calls. The new #3 item on the list, networking at events, actually moved up from #5, a fairly minor rise.

High Growth Firms' Top 3 Traditional Marketing Techniques by Impact 

The data tells us that the marketing techniques delivering the best results have changed little if at all. That suggests that these techniques are probably well tested and reliable—and good candidates for you to try at your own firm. Of course, everyone’s mileage will vary. You would do well to test a variety of approaches to discover what resonates best with your audience.

How to Beat a Fluctuating Market

Many business owners assume that it’s a bad time to focus on marketing efforts when facing market fluctuations. However, the opposite is actually true: the value of sound marketing fundamentals and better decision-making becomes paramount.

In fact, consultancies that continue to invest time and money into the most effective marketing strategies and tactics will benefit most. When others may downsize marketing efforts, savvy firms stay the course and reap the rewards of greater relative visibility and less competing noise. Using independent research like the 2020 High Growth Study — Consulting Edition to inform marketing focus areas can help your consulting business make better-informed decisions and get more bang from your limited marketing bucks.

About the Study

More than 400 consulting firms participated in the 2020 study, representing $24 billion in combined revenue and over 460,000 full-time employees. The sample spans the globe, with about 64% of respondents coming from the United States. And while the study covers the full gamut of consulting firms, it breaks out the high-growth cohort—those that generated at least 20% compound annual growth for three years—for special examination. These high-growth firms grew 4X faster than average-growth firms. The report provides critical insights into how these firms achieve this level of performance.

Note on the data sets: 2020 study data was collected at the end of 2019. Likewise, the 2019 study was conducted at the end of 2018.

Want to learn more about the marketing habits of your industry peers—and the high-growth standouts that outperform the field year after year? Join our webinar on March 31 at 2:00 PM ET, and receive your complimentary copy of the 2020 High Growth Study—Consulting Edition to discover a wealth of insights and practical advice you can start putting into action today.


About the Author

As Managing Director, Kelly leads the engagement efforts for the Hinge Research Institute—helping B2B companies and professional services firms use research to penetrate the professional services industry and drive content marketing strategies. Kelly ensures that clients get the data and insights to raise their visibility, grow, and be more profitable. He brings a 360-degree view of business, marketing, and research having worked in leadership roles at consulting firms, marketing agencies, vendors, and corporate marketing organizations.



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