Hinge has just released a new Technology Services Edition of its annual High Growth Study , which examines the performance of professional services firms. This special edition of the study included 170 technology firms, more than half of which provided detailed financial information for inclusion in the high-growth portion of the study. These “focus firms” posted a combined annual median revenue of almost $39 billion and employed over 450,000 people.
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.
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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.