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Services Guide
to
RESEARCH
How Targeted Research
Drives Firm Growth and Profitability
What is it?
A comprehensive overview of how to use research on target markets, clients,
prospects and your own staff to drive firm growth and profitability.
Who is it from?
This guide was prepared by Hinge, a leader in branding and marketing for
professional services firms.
Client research
Market research
Referral source/influencer
research
Competitive research
Employee research
Table of Contents
Introduction
Chapter 1:
The Impact of Market Research on Firm Growth and Profitability
Chapter 2:
The Importance of Market Research for Professional Services
Chapter 3:
Is Researching Your Clients and Prospects Really a Good Idea?
Chapter 4:
The Top 10 Questions to Drive Growth and Profitability
Chapter 5:
Who Should Do Your Client Research?
Chapter 6:
What Type of Research Should You Use?
Chapter 7:
1
2
4
6
11
15
19
23
Conclusion
28
About Hinge
29
Additional Resources
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Introduction
Think about that for a minute. Faster growth and more profit. Sounds
pretty appealing.
In this guide, well explore professional services research and explain
exactly how to go about finding the right approach for your firm.
And dont hesitate to contact us with your questions or your
suggestions to make this guide even better.
The Hinge Team
Chapter 1
Profitability
Growth
% of
Revenue
30.7%
Growth
Rate
19.9%
17.7%
16.6%
11.0%
2.8%
No Research
Occasional Research
Frequent Research
Chapter 2
Chapter 3
We advise firms to understand not only the perspective inside their firm, but
also how the firm is seen from the outside. Thats where client and prospect
interviews are so valuable and where the question typically comes up.
Concerns often arise around three main points.
3. So what?
Even if you do learn something new, whats the upside?
Will it outweigh the costs?
These are all reasonable concerns. However, the reality of the situation turns
out to be very different. Lets delve into each of these points.
Professional services
firms dont know 80% of
their true competitors.
When we put it all together, we find that firms have a 50-75% understanding
of their external brand. On a significant number of issues they are just flat out
wrong. In part, this is because many clients wont tell their firm when they are
unhappy with its service. They dont want to hurt peoples feelings with critical
comments. Or some clients may not offer positive feedback because they fear
their firm will raise its prices if it finds out how invaluable their services are.
So what?
Until recently, investing in research was a leap of faith. We knew from direct
experience that systematic research resulted in smarter strategies and stronger
competitive advantages, but we had no way of proving it. All that changed as
we studied high growth, high value professional services firms.
At the last minute we added a question to find out if firms conducted
systematic, structured research on their target client groups (clients, prospects,
potential prospects) exactly the type of research we are talking about here.
Firms that conducted structured research, even occasionally, were more
profitable and grew faster than those that did not.
Similarly, those firms that did frequent research were even more profitable and
grew even faster. And remember that profitability had to, by definition, take into
account the cost of the research. It simply doesnt get much clearer or more
compelling than that.
Bonus benefit.
It turns out that there is another benefit associated with this type of research,
one that is sometimes overlooked. In professional services firms it is often a
major challenge to get staff to change their behavior and support a new brand
strategy. In the absence of a compelling reason to change, old habits die hard.
We have found that client and prospect data can be a powerful motivator
for change. Hard data support stronger arguments than an edict from the
management team or the opinion of a marketing
consultant. Objective data turns out to be a great
lever to encourage positive change.
So when you take into account the arguments for
and against doing research on your clients and
prospects it becomes clear why we are strong
advocates of the practice. It allows you to get a clear
picture of both your external and internal brands as
they currently exist. That gives you a solid foundation
on which to build your firm.
But how should you go about conducting the
research? In the next three chapters well explore the
process of conducting professional services research.
Lets start with the questions your likely to want to
answer.
10
Chapter 4
Understanding what
great clients find
appealing about your
firm can help you attract
others just like them.
11
12
An understanding of your
brands strengths and
weaknesses can help you
figure out why you are
getting traction in one
segment and not another.
13
14
Chapter 5
15
16
17
Full disclosure
We want to be clear that our firm, Hinge, provides this very type of client
research services to professional services firms. So you might conclude that
this analysis is self-serving.
But we want to leave you with one telling point. When it comes to doing
research on our own clients, we follow our own advice and hire independent
outside researchers to learn about ourselves. Its the only way to get reasonably
accurate results.
In the next chapter well cover some alternative approaches to research and
help you understand what type might be best for your needs.
18
Chapter 6
Secondary research is often used for estimating the size and growth
(or shrinkage) of markets. It rarely provides sufficient insight to help
you tailor your services or gain a competitive advantage for your firm.
For those insights you will typically have to do primary research.
19
20
Face-to-face interviews
are perhaps the most
effective source of data for
professional services firms.
21
22
Chapter 7
A Cost-Benefit Analysis of
Professional Services Research
What are the benefits of market research for your professional services firm?
Is it worth the cost? Does it really matter?
These are some of the questions clients ask when we recommend researching
their current clients and target markets. While on some level we all know that
market research is a good thing, these are legitimate questions. What exactly
are the costs and benefits of market research?
23
30.7%
% of
Revenue
Growth
Rate
19.9%
17.7%
16.6%
11.0%
2.8%
No Research
Occasional Research
Frequent Research
24
Below are estimated costs for a single round of research for three sizes of
firms:
For a program of frequent research (quarterly) you can simply quadruple these
estimates.
1.40M
1M
Net Revenue Increase
Net Profit Increase
745K
735K
500K
412K
Occasional
Research
Frequent
Research
25
5.58M
4M
Net Revenue Increase
Net Profit Increase
2.98M
2.94M
2M
1.65M
Occasional
Research
Frequent
Research
55.8M
40M
Net Revenue Increase
Net Profit Increase
29.8M
29.4M
20M
16.5M
Occasional
Research
Frequent
Research
26
Two things are immediately apparent from this analysis. First, the net return on
invested research dollar is very sizable. If your firm realizes even a small fraction
of the documented benefits of market research, you are well advised to make
the investment.
The second observation is that the larger the firm,
the greater the return on invested dollars. This is a
very straightforward relationship arising from the
observation that the expense of market research
does not rise in lockstep with firm size. Put another
way, market research is a relative bargain for
larger firms.
27
Conclusion
Professionally conducted
research provides a clear
competitive advantage.
28
About Hinge
Hinge specializes in branding and marketing for the professional services firms.
We are a leader in helping them grow faster and maximize value.
Our comprehensive offerings include research and strategy, brand development,
award-winning creative, high performance websites and marketing outsourcing.
Hinge conducts groundbreaking research on professional service
companies. We have identified a group of firms that grow 9X faster and are
50% more profitable yet spend less than average to get new business. We can
show you how they do it.
To view our full library of research reports, white papers, webinars and articles,
please visit www.hingemarketing.com/library.
www.hingemarketing.com
703.391.8870
12030 Sunrise Valley Drive, Suite 120
Reston, VA 22191
29
Additional Resources
30
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