The average yearly growth rate of high growth firms is at least 20%.
Median growth rate varies by industry. Technology and consulting firms in an international study sample had the highest median growth rates, while legal and accounting/financial services firms had the lowest.
This is according to the 2017 High Growth Study by Hinge Research Institute, to discover why some firms grow much faster than average while spending less on marketing.
One of the things they was found that High-Growth firms
are twice as profitable as No-Growth firms and 22% more likely to be highly specialised in at least one of the following areas:
• Offering highly specialized services
• Solving particular client challenges
• Helping particular roles in client organizations
• Industry specialization
• Geographic or regional specialization
According to the study, No-Growth firms were slightly more likely to focus on industry specialisation and High-Growth firms were more focused on offering a particular service or solving a particular challenge.
More often than not, a prospective client choose one firm over another because it has stronger differentiators — characteristics that set a firm apart in the marketplace and give it a competitive advantage.
For the study, Hinge asked High-Growth firm participants to identify what makes their firm different from competitors.
There were three notable differentiators that stood out:
• High-Growth firms were nearly three times more likely to reference their use of technology and twice as likely to use their marketing/business development approach as differentiators.
Conversely, they were nearly three times less likely to reference the history of their firm as a differentiator.
• The use of technology as a differentiator is growing rapidly. 64% more High-Growth firms identified their use of technology as a differentiator this year as compared to last. This was the largest increase among all High-Growth firm differentiators.
• High-Growth firms invested 43% more effort towards
marketing than No-Growth firms, and saw 74% more impact.
High-Growth firms not only enjoy rapid growth, but also were twice as profitable as their No-Growth peers.
Indications point to High-Growth firms optimising their staff. They employ a higher ratio of marketers to full-time employees (15:1 vs 48:1) and saw higher median revenue per employee.
High-Growth firms also approach their positioning differently. They are more likely to use their use of technology and marketing/business development approach as differentiators and they are also more likely to research their target audience frequently (at least quarterly).
Specialisation is no stranger to High-Growth firms, either. They are 22% more likely to be highly specialised, particularly in solving unique challenges, offering specialised services, and helping certain roles within client organisations.
The most impactful marketing mix used by High-Growth firms was a healthy mix of both traditional and digital practices.
High-Growth firms also invested more in
marketing and use more metrics to track its success.
For more research reports, books, and other publications by Hinge, visit www.hingemarketing.com/library