Business

High-Growth AEC Firms Grew Three Times Faster Than Average-Growth Companies, Study Finds

Hinge found high-growth AEC firms approach marketing as a coordinated effort, experiencing 50% more impact from digital and content marketing compared to no-growth counterparts.
By Martin C. McCarthy
November 8, 2020
Topics
Business

Most, but not all, companies experienced a setback this year. What happened to businesses during the COVID-19 pandemic is dependent on the type of business and its location. For example, RV parks are booming where hotels in the same area remain vacant. Residential homes in the suburbs are more attractive than multifamily urban units.

COVID-19 has changed a lot, but not everything. Sound and true business practices are still relevant and having a strategic direction remains important. The Hinge Research Institute has released the findings of its 2020 High Growth Study of Professional Service Providers. This article will focus on the findings from the architecture, engineering and construction sector.

More than 124 architecture, engineering, and construction firms participated in the study. They represent almost $24 billion in annual revenue and more than 45,000 full-time employees.

Marketing Priorities

According to the research findings, differentiation and creating content were the top marketing priorities for AEC firms, followed by social media marketing and employer branding.

Hinge found that across the board in professional services, there is a focus on techniques that enhance firms’ digital footprints as they seek to remain visible and relevant in today’s marketplace. More than one-third of the top priories (and in AEC) related to creating valuable, educational thought leadership.

The research found that website performance is also a focal point for AEC firms. Priorities around website performance (number five), website design (number seven) and search engine optimization (number eight) are among the top 10 priorities.

According to the executive summary, high-growth AEC firms conduct more frequent research on their target audiences, invest in a wider range of digital marketing, and focus more on differentiation and content creation. High-growth AEC firms were 56% more likely to conduct frequent research on their target audience. These high-growth firms were more than twice as likely to be more profitable (gross profit figures exceeding 11%).

Hinge found firms that conduct frequent research (at least quarterly) on their target audiences grow faster and are more profitable compared to no-growth and average-growth peers.

Marketing

High- and no-growth firms adopted some of the same marketing techniques. There is an enormous difference, however, in the effectiveness of those techniques when they are grounded in market research. As referenced above, high-growth AEC firms were more than 50% more likely to invest in frequent research on customer insights and buying behavior than no-growth firms. Hinge found this supports positive action to address what high-growth AEC firms see as the most focused threats to their business and shifts in buying behavior.

Hinge points out that without research, there is no assurance that AEC firms are blogging about relevant topics, using the right keywords or attending the events their customers attend.

Furthermore, nearly three times more high-growth AEC firms than no-growth firms use case stories to demonstrate past performance and help prospects understanding their firm’s expertise.

As Lee Frederiksen, Ph.D. and managing partner of Hinge, explains, “research allows firms to close the perception gap—the difference between how a firm sees itself and how its clients view that same firm—so pervasive across the professional services landscape. Addressing this perception gap in turn helps firms reduce risk, boost confidence in decision-making, and make marketing messages more impactful.”

Digital Disruptors

Hinge found that high-growth AEC firms exhibited a higher rate of adoption than their no-growth peers on almost every single one of the digital marketing techniques cited by participating firms. High-growth firms invested in open-access and gated content, and they published articles in well-respected industry publications—addressing all levels of the marketing and sales funnel. In addition to focusing on core techniques, high-growth AEC firms also focused on more-differentiated and trending digital techniques such as video and audio, using marketing analytics and website performance to track and validate their effectiveness.

In conclusion, Hinge found that high-growth AEC firms approached marketing as a coordinated effort across teams and techniques, a process that helped them experience 50% more impact from digital and content marketing compared to their no-growth counterparts.

by Martin C. McCarthy

Martin C. McCarthy, CPA, CCIFP, is with McCarthy & Co., a leader in construction accounting. CE included McCarthy & Company on its list of 2019 and 2020 Top 50 Construction Accounting Firms. He can be contacted at (610) 828-1900

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