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Written by: Austin McNair
Today’s professional services marketers are responsible for doing more with less than ever before. From following innovation in marketing technology to supporting their firm’s recruiting campaigns, the list of ways they need to manage their marketing budget increases in complexity every year. And this is on top of the increasing pressures applied by the marketplace.
This intense dynamic of increased responsibility coupled with unyielding marketplace uncertainty is causing many to reassess their marketing strategies and budgets.
At the highest level of this reassessment there is an important question to answer: Is now the time to lean down and make cuts to marketing efforts or is it a time to expand and increase marketing investment?
In this article, we will review findings from Hinge’s latest research report, the 2023 High Growth Study, and present a research-backed answer to this question. Spoiler alert: the research suggests you should NOT cut your marketing budget this year.
The Marketing Advantage of High Growth Firms
Benjamin Franklin is often quoted as saying, “an investment in knowledge pays the best interest.” This is why Hinge continues to invest in conducting our annual High Growth Study.
Understanding the challenges outlined above, we want to provide professional services marketers with practical insights to guide them as they continue to develop their marketing programs. At the center of the study is a focus on the marketing behaviors of the world’s fastest growing professional services firms (we refer to them as the High Growth firms). We want to understand how some firms are growing 3X faster than their average growth peers.
So when it comes to this question about marketing investment and resourcing, what do the High Growth firms do? Well here’s the headline: Despite an industry-wide pullback in marketing spending, High Growth Firms are investing more.
First, let’s comment on the industry-wide pullback. As you see in Figure 1 below, for the first time in four years, our High Growth Study has measured a decrease in the amount of revenue professional services firms are dedicating to marketing.
The reasons for this pullback no doubt relate to some of the primary challenges faced by professional services firms (marketplace uncertainty, a shortage of top talent, etc). But not all firms are pulling back on their marketing efforts!
As we’ll explore below, there are three important ways that High Growth firms are continuing to invest more in their marketing and business development efforts than their competitors. Let’s break each of these research insights down one-by-one.
Insight 1: High Growth firms spend more on marketing
One result we have seen across years of High Growth studies—as well as some of our industry specific budget studies—is that the High Growth firms dedicate more revenue towards their marketing initiatives. Our research prompts respondents to consider a marketing budget that does not include compensating employees. For example, below in Figure 2, High Growth firms reported dedicating over 17.5% more of their revenue towards marketing than No Growth firms.
Insight 2: High Growth firm employ more marketing talent
As we mentioned above, much is asked of today’s professional services marketers. The standards of modern marketing programs increase every day. High Growth firms have responded to this challenging marketing environment by employing more marketing talent inside their firms. Beyond simply spending more on marketing, they are diversifying their marketing capabilities and positioning themselves to accomplish more.
Here’s what the data says: While No Growth firms employ 1 marketing resource per 34 team members, High Growth firms employ 1 for every 20.
By employing more internal marketing talent, the High Growth firms open doors for more sophisticated marketing campaigns. An increased number of specialists (website, SEO, graphic design) ensure that firms can truly build integrated marketing plans that work.
But as we’ll see in the next insight, employing internal talent is not the only way High Growth firms leverage talented specialists.
Insight 3: High Growth firms outsource more to fill critical gaps
The third area where High Growth firms stand out from their peers is in how they work with outside agencies, freelancers, and consultants. In nearly every category that we researched, High Growth firms were more likely to consult with resources outside of their firm for marketing support. You can review these categories in Figure 3 below.
What are the main points of emphasis here? Well there are some categories where High Growth firms were far more likely to work with an outside firm than No Growth firms. Let’s look at the data another way and see what we can learn.
Here are the top 5 categories ranked by the largest delta between High Growth and No Growth firms:
- Thought leadership content (120%)
- Research (116%)
- Strategy development (72%)
- SEO (67%)
- Graphic design (53%)
As a leader overseeing marketing activities, now might be the right time to reconsider reinforcing your marketing efforts with outside support. Specialized skills like graphic design and support with search engine optimization (SEO) can be a great place to start if those are pain points for your team. But High Growth firms put emphasis on working with consultants that help them with the big picture of their marketing programs—support or advisory in the creation of high-quality thought leadership content, research to help them reduce uncertainty and guide decision-making, and/or consultation with developing their marketing strategy.
What’s next?
Let’s return to our original question… Is now the time to increase or decrease your firm’s investment in marketing? If you look towards what the High Growth firms are doing, then it’s hard to see a case for anything other than increasing investment.
Consider the three insights together: High Growth firms dedicate a higher percentage of revenue to marketing, employ more marketing talent internally, and are also more likely to outsource and work with agencies. This three punch combo may shed some light on how these firms build marketing programs that drive their firms towards greater growth and profitability.
In your particular scenario, it may be unrealistic to try to increase your marketing investment in all three of these areas right away. Increased investment does not mean losing your strategy. You still need to take a strategic approach to building their marketing plans. Without a strategic plan, your marketing efforts may be scattered and ineffective. You want a marketing plan that allows you to continuously measure your progress, adjust your approach as needed and make data-driven decisions.
But if there is an internal discussion about your marketing investment, use this data to your advantage.
Related: How To Find the Best Keywords for Optimizing Your Website Content