We recently released the 2018 High Growth Study: Accounting and Financial Services Edition, and it confirms what we had been hearing from our clients: a perfect storm of market conditions is hammering the industry and making it difficult to grow. In fact, the accounting and finance industry lags well behind all other professional services (see figure below).
In addition, after an uptick in 2016, growth in the industry dropped almost 22% in 2017. That’s a troubling trend.
What’s causing this headwind? Firms cited a litany of challenges, including a shortage of top talent, increased competition, downward price pressures and the havoc introduced by automation and artificial intelligence.
And in the face of all this change, firms like yours rely on that old standby — the CPA referral — to survive.
The good news is that referrals are alive and well in the accounting industry. The most successful firms rely on them, too. But what’s changed is the way high-growth firms are generating those referrals.
Before we get there, however, let me explain briefly what we mean by high-growth firms. These are firms that grew 20% or more for at least three consecutive years. If the median growth rate of all accounting/finance firms was 6.1%, the growth rate of a high-growth firm was 56.4% — 9X higher! They must be doing something right.
A New Way to Get Referrals
So how do high-growth firms go about creating CPA referrals? The data offers some intriguing clues.
For one thing, we discovered that high-growth firms are about 50% more likely to use digital and content marketing techniques than no-growth firms. I’m talking about techniques such as email marketing, blogging, social media, digital ads, and webinars. At the same time, they invested less effort overall on them. That means they use these techniques more efficiently.
High-growth firms also enjoyed greater impact from these techniques. The figure below indicates the proportion of firms that rated each technique a 9 or 10 for level of impact on a 0-10 scale.
The takeaway? High-growth firms are getting greater results from digital and content marketing than their no-growth peers.
What does this have to do with referrals? These digital marketing tactics represent a different approach to referral generation than the traditional CPA marketing strategy. Instead of spending their time at face-to-face networking events or playing golf with prospects, high-growth firms are using techniques that offer greater reach and build trust with less personal interaction. In addition, content marketing prioritizes promoting expertise over making personal connections.
Let me explain. In the traditional model, a partner devotes a certain number of hours each week to attending networking events, having lunch with prospective clients and making business development phone calls. While effective, this approach is limited by the number of people a person can meet and greet in a week.
Digital techniques, especially when part of a content marketing program, don’t have that limitation. Partners spend their business development time differently — writing blog posts and guest articles, networking on social media and developing valuable, long-format pieces of content they can offer on their website. Instead of meeting many individuals face to face, they are building a portfolio of expertise that dozens, and eventually hundreds, of people will discover online each week.
These digital prospects are individuals who are deeply interested in what the experts have to say. And many of them will return again and again to consume more expert information. And when these people encounter friends and colleagues who need accounting services, who do they think of first? That’s right — the firm that they have come to trust. A referral is born.
The beauty of this model is that you don’t have to meet these prospects or referral sources in person until they are ready to buy. Of course, at that point closing the sale is faster and easier.
If you aren’t doing content marketing, or aren’t doing it well, it’s time to reassess your marketing strategy. The forces that are changing the marketplace aren’t going away. If anything, the winds of change are going to blow with even greater force. And sooner or later, CPA firms that stick stubbornly to the “tried and true” rules will be swept away in the coming storm.
- Get a step-by-step guide to building a powerful referral strategy with our free Rethinking Referral Marketing executive guide.
- Dig into the research behind generating referrals today with our free Referral Marketing for Professional Services Firms research report.
- Referrals are the most important source of new business for professional services firms, check out Hinge University’s Referral Marketing Course to learn more.
How Hinge Can Help:
It’s time to rethink your referral marketing strategy. The Visible Firm® is the leading marketing program for delivering greater visibility, growth, and profits. This customized program will identify the most practical offline and online marketing tools your firm will need to gain new clients and reach new heights.