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2018 Government Contractor Research Released

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Now in its third year, Hinge’s High Growth Study surveyed more than 1,000 professional services firms in industries that include accounting, architecture, construction, consulting, engineering, finance, legal, and technology.

In our all professional services report, we discovered firms that derive a majority of their business from government contracts grew faster than all others in the study. To understand why, we decided to take a closer look.

The 2018 High Growth Study: Government Contractor Edition focuses on a segment of 91 government contractors, with services that span across architecture, construction, consulting, engineering and technology industries. Together, these firms generated more than $76 billion in annual revenue and employed more than 300,000 people. They ranged in size from micro firms with less than $1 million in annual revenue to large firms generating $50 million or more each year.

Download the 2018 High Growth Study, Government Contractor Edition Executive Summary

Through a comprehensive survey, CEOs, presidents and other top executives at these firms revealed how they view the future of their industries, the strategies they will use as they continue to address threats to their business and which marketing tactics are producing the best results. The study also details why some government contractors grow at much higher rates and what they are doing to fuel that growth.

Exceptional Industry Growth

Government contractors have experienced increasingly rapid growth between 2015 – 2017. These organizations reported median annual growth of 13.3% in 2017, up more than 50% over the previous year. By contrast, firms that did not conduct business through government contracts experienced declining median annual growth rates from 11.3% in 2016 to 9.1% in 2017 – a 19% decrease.

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High-Growth Government Contractors Grew 4X Faster than Average

blogoffer-middle-2018highgrowth-GovCon-ExSummOur study uncovered a group of government contractors that experienced compound annual growth of at least 20% for three consecutive years. We call these the “High-Growth” firms. Roughly 4 in 10 (39.5%) government contractors fell into this category.

In fact, among this High-Growth cohort, the median annual growth rate was more than 42%—almost four times that of the average government contractor. In many industries, smaller firms represent the majority of firms in the high-growth category, but government contractors buck that trend. Only a third of the firms considered high-growth are small or micro firms. The remaining 70% are mid-sized and large.

The High-Growth Perspective

The mission of the 2018 High Growth Study was to understand what rapidly growing firms are doing differently than firms that are not growing at all – what we call “no-growth” firms. We first noticed a difference in how High-Growth firms see the future. They were 5X more likely to view managing a remote workforce as a threat, and 2X more likely to call out generational changes in the workforce. They were also more likely to name automation and increased regulation as threats.

On the other hand, no-growth government contractors were more likely to view increased competition, downward price pressure and commodiziation of services as the top threats to their industry.

We found differences in the strategies used to address these threats, too. For example, high-growth firms were almost twice as likely as their no-growth peers to conduct frequent research on their target markets. They were also more likely to prioritize their visibility in the marketplace, enter new markets, and “productize” their services.

Download the 2018 High Growth Study, Government Contractor Edition Executive Summary

High growth firms were also more likely to specialize around the technology they use and enjoy a skills advantage in five of the seven key business development areas monitored in the study.

High-Growth Marketing

We found that high-growth government contractors go to market differently, focusing their priorities on understanding their target audience, and then targeting them through digital channels. They are nearly 3X more likely to upgrade their websites, 2X more likely to build a content marketing calendar, and 30% more likely to prioritize identifying and creating buyer personas. They are also more likely to focus on social media marketing and embrace marketing automation.

By studying how high-growth government contractors perceive the marketplace and how they go to market—using data, not anecdotes—your firm can create more effective marketing, sales and revenue strategies. Hinge makes an executive summary of the the 2018 government contractor research available at no cost. Download it today. 

Additional Resources:

How Hinge Can Help:

Let Hinge help you create and implement a research-based strategy to increase your organization’s visibility and growth. Hinge’s Visible Firm® Program is the leading marketing program for professional services firms that want to market themselves like industry leaders. Ask about it today!

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Elizabeth Harr Elizabeth is an accomplished entrepreneur and experienced executive with a background in strategic planning, management, communications, and alliance development. Elizabeth co-founded a Microsoft solutions provider company and grew it into a thriving organization that became known for its expertise in Microsoft customer relationship management.

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