Five Keys to the Success of High-Growth Firms
Hinge Research Institute’s recent 2021 High Growth Study: AEC Edition revealed the key business strategies of highly successful architecture, engineering and construction (AEC) firms. Based on a survey of almost 300 AEC companies with combined revenues of $75 billion and more than 90,000 employees, the report provides insight into how these high-growth firms with compound annual growth rates of 20% or greater managed to succeed so well in a period marked by uncertainty, an economic slow-down, and political and social turmoil.
The common denominator of the fundamental strategies employed by high growth AEC firms is adaptability. Faced with unprecedented challenges, these firms were quick to adapt their approaches to growing their businesses, not waiting for “things to settle down.” By getting proactive, they were able to steal a march on their competitors and grow their businesses at a time when many were stagnant or, worse, failing.
Here are the five fundamental keys to success used by high growth AEC firms, identified in the study.
1. Conduct target audience research
High growth AEC firms are more likely to conduct research on their target audiences compared to no-growth firms. More frequent and in-depth research helps these organizations better understand the wants and needs of their prime business prospects. In fact, more than 80% of high-growth firms conduct research at least quarterly, enabling them to offer more relevant, timely, and valuable services to capture more business and revenue.
2. Increase marketing budgets
More than 40% of high-growth AEC firms increased their marketing budgets during the COVID-19 pandemic, while a similar proportion of no-growth firms decreased their marketing spend. High-growth firms are currently dedicating almost 27% of their revenues to marketing, essentially doubling their budgets to significantly increase their visibility and gain market share from their no-growth peers.
3. Go online for leads
High-growth AEC firms generate half of their new business leads from online sources. Using insights gained from their ongoing research, they focus their digital marketing efforts on channels preferred by their prime prospects. The strategy works—leads have soared by 64% over the past year from websites, email, social media and digital advertising. Effective digital marketing relies on frequent new content posts, so more than one-third of high growth AEC firms use automated marketing and sales platforms to handle what can otherwise be a time-consuming task.
4. Convert to a remote workforce
The coronavirus pandemic has helped accelerate a trend that has been building—enabling employees to work from home. High-growth AEC firms are more than twice as likely to ditch the traditional office in favor of working remotely. While more than one-third of no-growth firms are more likely to cling to their traditional office space, only a little more than 26% of high-growth firms are doing so.
5. Automate processes
High-growth AEC firms are much further along their automation journey than no-growth peers. At least 50% have close to fully, if not completely, automated their general and core business processes. More than one-third have automated their sales and marketing processes. Automation maturity enables these firms to focus their teams on delivering higher value services to clients. On the marketing and sales front, they are able to generate more digital leads by providing the right message to the right people at the right time.
What Else Can Construction Firms Do Right Now?
Times are tough and it may not be possible to increase the marketing budget and launch a significant digital program. So what else can an AEC firm do to get the most bang for its marketing buck?
To address this challenge, we’ve identified a select group of proven marketing techniques that provide an exceptionally substantial impact for the amount of time and effort they take. Here are the top three.
There’s no question that the past year or so has been hard on organizations of all stripes and sizes. The pandemic has kicked everyone’s butt but, interestingly, high-growth AEC firms have experienced much less impact from COVID-19 than their no-growth peers. In fact, they were more likely to have experienced no impact at all—some high-growth firms even experienced a positive one. And of the 50% of firms surveyed for the study that reported a negative impact from the pandemic, more than half of them were still able to grow.
How did they manage it? By taking concrete, proactive steps to address the challenges quickly and effectively, in part by using the strategies highlighted in this post. Perhaps the single most important step a firm can take is to conduct regular, targeted research. Because research provides knowledge, and knowledge leads to insight, and insight can helps business owners plan their path to success.
Karl Feldman is Partner at Hinge, the leading research-based branding and marketing firm for the professional services. Hinge conducts groundbreaking research into high- growth firms and offers a complete suite of services for firms that want to become more visible and grow.