Está en la página 1de 35

Professional

Services Guide
to

RESEARCH
How Targeted Research
Drives Firm Growth and Profitability

Professional Services Guide to Research


Copyright 2012
Published by Hinge Research Institute
12030 Sunrise Valley Drive
Suite 120
Reston, Virginia 20191
All rights reserved. Except as permitted under U.S. Copyright Act of 1976, no
part of this publication may be reproduced, distributed, or transmitted in any
form or by any means, or stored in a database or retrieval system, without the
prior written permission of the publisher.
Design by Hinge. Visit our website at www.hingemarketing.com

Professional Services Guide to Research

About this Guide

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.

Why do I need it?


There is a revolution underway in professional services marketing. Firms that
harness the power of research grow faster and are more profitable. You need to
understand how it applies to your firms strategy and marketing.

Who is it from?
This guide was prepared by Hinge, a leader in branding and marketing for
professional services firms.

How can Hinge help?


Hinge offers research services in the following areas:

Client research
Market research
Referral source/influencer
research

Competitive research
Employee research

Social media strategy and


implementation
Content marketing
Campaign management

Hinge also offers:

Branding and strategy


Award winning creative
Website redesign
Search engine optimization

Professional Services Guide to 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

A Cost-Benefit Analysis of Professional Services Research

23

Conclusion

28

About Hinge

29

Additional Resources

30

Professional Services Guide to Research

Introduction

The More You Know, the


Faster You Grow
On some level, we all know that it is important to research our clients
and prospects.
Think of the value of truly understanding your
current clients emerging needs, how they perceive
you and your firm and hovthe ones that got away
to the mix and the power of research is magnified
further.
In fact, thats what our own research supports.
While studying high growth professional services
firms we made an eye-opening discovery. Firms
that conduct systematic research on their current
and potential clients grow from 3 to 10 times faster
and are up to 2 times more profitable. Thats no
small impact.

Firms that conduct


systematic research on
their current and potential
clients grow from 3 to 10
times faster and are up to 2
times more profitable.

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

Professional Services Guide to Research

Chapter 1

The Impact of Market Research on


Firm Growth and Profitability
You may think you know your clients pretty well. But how well do you know your
audience really? Can systematic research on your target market impact the
growth and profitability of your firm?
We investigated these questions as part of a recent study of professional
services firms. We knew from our experience working with professional services
firms that such research can be very useful. But because so many factors
affect growth and profitability, we were skeptical that research would play a
significant role.
We divided the firms we studied into three groups:

Those that did no systematic research into their target market


Those that did systematic research occasionally
Those that did frequent research (at least quarterly)

Profitability
Growth

% of
Revenue

30.7%

Growth
Rate

19.9%
17.7%

16.6%

11.0%
2.8%
No Research

Occasional Research

Professional Services Guide to Research

Frequent Research

To our surprise, we found a clear even dramatic correlation between


systematic research and firm growth and profitability. Firms that conducted
even occasional research showed big increases in growth and profitability.
Further, those firms that did frequent research grew still faster and were even
more profitable.
What kind of research? Its important to note that we ruled out informal
research, such as talking with clients or keeping up with industry publications.
We also did not include client satisfaction surveys. Instead, we focused on
systematic, structured research that helps firms understand and track their
target market.
Why would research have such a powerful impact? We believe that when firms
understand their target market, including their current clients, they can better
anticipate emerging needs to develop high-margin services and market them
efficiently.
But what makes research so powerful? What exactly can
firms learn about the client groups they serve?
Well explore these questions in the next chapter.

Firms that conducted


even occasional research
showed big increases in
growth and profitability.

Professional Services Guide to Research

Chapter 2

The Importance of Market Research


for Professional Services
Most professional services underestimate the importance of market research
in growing their firm. We regularly hear a lot of bravado from top executives: I
already know my clients, and I understand some of their issues even better than
they do.
While that may well be true, it ignores one persistent, inconvenient fact.
Professional services firms that do frequent, structured research on their target
client population grow faster and are more profitable than those that dont (see
Chapter 1). Its hard to ignore that one.

Why is market research so important?


As weve tried to answer this question, weve come to the conclusion that there
is no single reason. There are several:
1. You probably dont know your clients as well as you think you do.
In almost every piece of market research we do, we uncover areas
where professional service providers misjudge or misread their clients.
2. Your clients are often subject to powerful influences that you are not
aware of. These influences may be market pressures that your clients
never disclose to you because they dont think they are relevant to
your work.
3. You may be intimately familiar with the trees but miss the forest. Its
sometimes hard to see patterns when you are so wrapped up in your
day-to-day interactions with clients.

Professional Services Guide to Research

4. Your current clients may not be representative of the market as a


whole. Consequently, you may miss an important trend.
5. In the rush of day-to-day activities it is
easy to put off dealing with complex,
hard-to-resolve issues. Good market
research makes these issues difficult to
ignore.

Market research can


illuminate which services
you should offer and how
and when to offer them.

6. Research-driven facts help shape


staff behavior. It is very easy for staff
to become set in their ways and resist
change. There is nothing like being
faced with objective statistics to motivate change. Hearing it from
the market directly, backed up by empirical data, can cut through the
underbrush of opinions.
7. Market research can illuminate which services you should offer and
how and when to offer them. When you understand emerging issues
and trends, its often clearer which services to develop and offer.
The impact of market research is easier to understand once youve been
through it. But in many firms there are partners or staff who resist taking that
first critical step.
In the next chapter well explore the validity of some of the most common
objections.

Professional Services Guide to Research

Chapter 3

Is Researching Your Clients and


Prospects Really a Good Idea?
Is client and prospect research a good idea? This
question arises with such frequency in our work
that it has caused us to think through the issues
involved. It typically comes up in the context of a
re-branding or market planning effort.
The first step in any such effort is, or should be,
getting the strategy right. Building a firm on a
flawed strategy is the equivalent of erecting a
building on a cracked foundation. Never a good
idea.

Building a firm on a flawed


strategy is the equivalent
of erecting a building on a
cracked foundation. Never
a good idea.

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.

1 I already know my clients.


Its unlikely that you will learn anything we dont already know about
our clients, competitors or marketplace.

2. Dont rock the boat.


It might upset our clients and even cost us business.

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 Guide to Research

I already know my clients.


According to our research, firms dont know their clients as well as they
think. While its true that most firms do know quite a bit about their clients
businesses, that knowledge is filtered through the lens of their own perspective.
We refer to this perspective as a firms internal brand. Its how they see the
world looking out. A firm, however, often looks very different from the outside
looking in its external brand.
For example, during our research, when we asked a firm who their competitors
were and then we asked their clients and prospects the same question we
found that the average overlap was only about 20%. That means that from the
markets perspective professional services firms arent aware of 80% of their
true competitors.
Similarly, our research also shows that about 65%
of the time a clients admits they dont really know
all that their service firm does. Even worse, most
clients wish their firm could perform services that
(in over 85% of the cases) they already offer!

Professional services
firms dont know 80% of
their true competitors.

We have never conducted research on a firm


without uncovering at least one hidden strength
one that clients saw but which the firm didnt realize
they had. Some things you just take for granted. Youre too close to see them.
And of course there are all those hidden weaknesses that surface as well.

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.

Professional Services Guide to Research

Dont rock the boat.


Will talking to clients irritate them or dredge up old issues? While this is an
understandable concern, it turns out not to be much of an issue. If clients dont
want to be bothered, they simply dont participate in the research.
We find that most clients are both willing and very forthcoming. Most feel good
being asked for their perspective and the interview process tends to reflect
well on the firm. As to loss of business, it simply doesnt happen. Its far more
likely that the interview will uncover an existing need and lead to new business
instead.
What if your clients are government employees? Many people are convinced
that their government clients simply will not participate in research. While there
are instances when they cant participate in an interview, its rare. In reality,
government clients respond very much like private sector clients.

Professional Services Guide to Research

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.

Professional Services Guide to Research

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.

Client and prospect data


can be a powerful motivator
for change.

Professional Services Guide to Research

10

Chapter 4

The Top 10 Questions to Drive


Growth and Profitability
After you have concluded that research makes sense for your firm, the next
question is usually around what kind of research will help grow your firm.
Weve reflected on the kinds of questions weve asked when doing research
for our professional services clients and how the process has impacted their
strategy and financial results. The result is this list of the top 10 research
questions that can drive firm growth and profitability.

1. Why do your best clients


choose your firm?
Notice we focus on the best clients, not
average clients. Understanding what
great clients find appealing about your
firm can help you attract others just like
them.

2. What are those same clients


trying to avoid?

Understanding what
great clients find
appealing about your
firm can help you attract
others just like them.

This is the flip side of the first question


and offers a valuable perspective. As a practical matter, avoiding
being ruled out during the early rounds of a prospects selection
process is pretty darned important. The answer can also help shape
your business practices and strategy.

Professional Services Guide to Research

11

3. Who are your real competitors?


Most firms are not very good at identifying their true competitors.
When we ask a firm to list their competitors and ask their clients to
do the same, there is often less than 20% overlap. Why? Sometimes
its because a firm knows so much about its industry that it fails
to take certain types of competitors
seriously. Other times its because a
firm views a clients problems through
their own filter and overlooks completely
different categories of solutions that
they may be considering. In either case,
ignorance of true competitors seldom
helps you compete.

4. How do potential clients see


their greatest challenges?

The key here is that you


may offer services that
can be of great benefit
to organizations, but
they never consider you
because they are thinking
about their challenges
through a different lens.

The answer to this question helps you


understand what is on prospective clients
minds and how they are likely to describe
and talk about those issues. The key here
is that you may offer services that can be
of great benefit to organizations, but they never consider you because
they are thinking about their challenges through a different lens. They
may want cost reduction when you are offering process improvement
(which, in fact, reduces cost). Someone needs to connect the dots or
you will miss the opportunity.

5. What is the real benefit your firm provides?


Sure, you know your services and what they are intended to do for
clients. But what do they actually do? Often, firms are surprised to
learn the true benefit of their service. When they do understand it,
they are in a position to enhance it or even develop new services with
other true benefits.

Professional Services Guide to Research

12

6. What trends and challenges are emerging?


Where is the market headed? Will it grow or contract? What services
might be needed in the future? This is fairly common research fodder
in large market-driven industries, but its surprisingly rare among
professional services firms. Understanding emerging trends can
help you conserve and better target limited marketing dollars. Weve
seen many firms add entire service lines, including new hires and big
marketing budgets, based on little more than hunches and anecdotal
observations.

7. How strong is your brand?


What is your firm known for? How strong is your reputation? How
visible are you in the marketplace? Answers to each of these
questions can vary from market to market. Knowing where you
stand can not only guide your overall strategy, it can have a profound
impact on your marketing budget. An understanding of your brands
strengths and weaknesses can help you figure out why you are
getting traction in one segment and not another.

8. What is the best way to market


to your primary target clients?
Wouldnt it be nice to know where your
target clients go to get recommendations
and referrals? Wouldnt it be great if you
knew how they want to be marketed
to? These are all questions that can be
answered through systematic business
research.

An understanding of your
brands strengths and
weaknesses can help you
figure out why you are
getting traction in one
segment and not another.

9. How should you price your


services?
This is often a huge stumbling block for professional services firms. In
my experience, most firms overestimate the role price plays in buying
decisions. Perhaps it is because firms are told that the reason they
dont win an engagement is because of price. It is the easiest reason
for a buyer to share when providing feedback. If a firm hires an
impartial third party to dig deeper into why it loses competitive bids,
it often learns that what appears to be price may really be perceived
level of expertise, lack of attention to detail or an impression of nonresponsiveness. Weve seen firms lose business because of typos in
their proposal while attributing the loss to their fees.

Professional Services Guide to Research

13

10. How do your current clients really feel about you?


How likely are clients to refer you to others? What would they change
about your firm? How long are they likely to remain a client? These
are the kinds of questions that can help you fine tune your procedures
and get a more accurate feel for what the future holds. In some cases,
weve seen clients reveal previously hidden strengths. In others, they
have uncovered important vulnerabilities that need attention.
The tricky part here is that clients are rarely eager to tell you the truth
directly. They may want to avoid an uncomfortable situation or are
worried that they will make matters worse by sharing their true feelings.
In the next chapter well dig deeper into the question of who should
do your research.

In some cases, weve seen


clients reveal previously
hidden strengths. In others,
they have uncovered
important vulnerabilities
that need attention.

Professional Services Guide to Research

14

Chapter 5

Who Should Do Your Client


Research?
So the question inevitably arises, Who should do the client research?
There are three obvious alternatives that well explore. Each has benefits and
drawbacks.

The relationship owner or primary client contact


Another person within your firm
An independent outside researcher

As we compare these three alternatives there is one basic truth we need to


keep in mind. Your clients are people. They are subject to all of the emotions,
social pressures and societal norms we all face.
Dont expect them to be rational or completely candid
with you. Professional services are based on relationships.
You and your clients are in a relationship together.
Yikes we all know what that can mean!

Professional Services Guide to Research

15

Lets look at each alternative in turn:

The relationship owner


Here, the primary client contact, often the most senior person on the account,
would interview the client.
The rationale is that they are the person who best knows the client and has
a trusting relationship with them. Presumably this person would get the most
candid feedback. Also, concerns about the research somehow disrupting the
relationship would be minimized. This avoids the dont rock the boat pushback.
Unfortunately, most of these benefits are an
illusion. In fact, the relationship owner is perhaps
the least likely person to get candid feedback. The
client will often pull their punches to avoid hurt
feelings or making a bad situation worse. On the
other hand, if they are too positive, they may be
concerned about a fee increase or that their firm
will slack off in service.

The relationship owner is


perhaps the least likely
person to get candid
feedback.

Of the three alternatives, this one is least likely


to produce valuable findings. That doesnt mean
that relationship owners shouldnt have an ongoing dialog with their clients
quite the opposite. Its central to quality service. Just dont kid yourself that its
research.

Professional Services Guide to Research

16

Another person from your firm


In this scenario a more independent person from your firm conducts the
interview. This may be a senior person such as the Director of Client Service or
a member of the marketing or administrative team.
On the surface, this addresses several of the issues inherent in using
the relationship owner. It removes the questioner from the center of the
relationship, thereby adding candor. This person, if skilled at conducting
interviews, will learn more than a relationship owner would. It is a step in the
right direction.
The problem is, it only goes so far. The client is still talking to a representative
of your firm, and they know it. Even if the interviewer promises anonymity and
non-attribution of comments (which is essential), they may not be believed.
People know from their own experience that colleagues talk, so they expect it,
even if its not true.
When it comes to researching prospects and lost proposals, this alternative also
falls short of ideal. Many folks will interpret it as a sales call and not distinguish
between roles in your firm.

Independent outside researcher


In this approach, the firm retains an independent research firm to conduct
the client research and report the results. Typically this is done confidentially.
(Occasionally, however, a client requests that the interviewer convey a message
back to the firm.)
This alternative eliminates (to the extent possible) any of the issues of candor.
Feelings are not hurt, conflict is avoided and the interviewee can discuss value
without fear of an imminent fee hike. In many instances, the client will describe
how they have avoided bringing up issues for fear of making things worse.
The researcher may also have accumulated experience or data that will help a
firm benchmark its performance against other firms in its industry. This can be
an added bonus.
The big downside is cost. A firm will be writing a check to make this happen.
Now, some may argue that there is a real cost to doing client research
internally, too. After all, employees who do research are being paid and arent
able to do billable work. So any way you look at it, valuable client research is
not free.
There are other downsides, as well. They are the same downsides of working
with any outside service provider, such as finding the right partner and
managing the working relationship.

Professional Services Guide to Research

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.

Professional Services Guide to Research

18

Chapter 6

What Type of Research Should


You Use?
Market research pays off for professional services firms. In fact, one of our
original research studies (see Chapter 1) found that firms that conduct
systematic research on target client groups are both more profitable and grow
much faster. Who doesnt want that?
When we share this finding with clients and prospects, the next question is
almost always around what types of market research is most important. In
previous chapters weve discussed what type of topics should be covered
(Chapter 4) and who should do the research (Chapter 5). In this chapter well
cover the various approaches to market research available to you.

Types of Market Research


1. Secondary research This is the type of research that involves
seeking out information that is already available. Someone else has
conducted a study, and you are simply using their results.
For example, suppose you are considering offering a new service to
dental practices and you want to know how many there are in your
region. You might check with trade associations or state licensing boards
to compile various estimates of the market size. Sometimes secondary
research is publicly available and free. Other
times it must be purchased.
Secondary research differs from other
types of market research, where either
you or someone you hire collects original
data. This is called primary research.

Secondary research is often


used for estimating the size
and growth of markets.

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.

Professional Services Guide to Research

19

2. Survey research Perhaps the most common type of primary


research, surveys have become a fixture of the modern online
experience. The trick is not in collecting the data. Its in knowing the
right questions to ask and how to interpret the results.
Often, these online surveys involve
closed-ended questions, such as multiple
choice or rating scales. There is little
opportunity to probe or ask follow-up
questions.

Surveys seldom yield


subtle insights because the
range of answers is predetermined by the possible
responses you allow.

Surveys work well for getting a little


information from a lot of people. They
seldom yield subtle insights, however,
because the range of answers is predetermined by the possible responses
you allow. But they can tell you what proportion of respondents feel a
certain way or share a specific characteristic.
In the professional services, surveys are widely used for client
satisfaction studies. If you want to get in-depth insights, though, you
need to consider other types of market research.

3. Focus groups Get a group of your target customers together


in one place and ask them a series of questions. Voila! You have
a focus group. Widely used in consumer products research, focus
groups have the advantage of being both face to face (to observe
body language, show prototype products or view sample advertising)
and flexible enough to be adjusted on the fly by a skilled moderator.
They can also be less expensive than individual interviews, as you are
working with multiple people at the same time.
But focus groups have several limitations that make them impractical
for most professional service applications. First, it can be very difficult
to get a room full of executives to show up, let alone open up about
their business in front of their peers.
Also, since professional services typically have nothing to show, why
bother? And a serious limitation of any focus group, of course, is that
group dynamics can easily cloud the results in the end you may not
even get truthful answers to your questions.

Professional Services Guide to Research

20

4. Face-to-face interviews Professional services firms are typically


better served by interviewing representative members of your
audience individually. Face-to-face interviews give you the flexibility
to schedule busy executives (often current or potential clients). You
can also tailor your interview questions
to probe for answers and adapt to
situational responses. This approach is
perhaps the most effective source of data
for professional services firms.

Face-to-face interviews
are perhaps the most
effective source of data for
professional services firms.

Face-to-face interviews, however,


do come with a couple of important
limitations. First, they are the most
expensive interviews to conduct. A skilled
interviewer must travel to the client, who could be located anywhere.
Further, the interviewee may be reluctant to give up the extra time
these interviews typically take.
5. Telephone interviews Telephone (or increasingly video chat)
interviews are often a better alternative for most firms. They offer
almost the same set of benefits as individual face-to-face interviews,
but at a much lower cost. It is much easier for a busy executive to
take a phone call than to sit down for a meeting.
The main advantage lost in telephone interviews is the interviewers
ability to read body language. But with the increased use of video
(such as Skype) even that distinction is fading. Its no wonder that
phone interviews tend to be the best choice for many firms.

Professional Services Guide to Research

21

Which types of market research should your firm be using?


It obviously depends on the questions you need to answer.

Secondary research helps you judge overall markets and identify


trends.
Phone interviews allow you to zero in on individuals. You can gain an
in-depth understanding of needs, attitudes, plans and reactions.
Surveys help you bridge the gap between the two. For instance,
suppose you have identified a service you can provide to clients who
fit a certain profile. What percentage of the market fits that profile?

Research allows you to get practical answers to these types of questions. So


its no wonder that firms that do regular market research often have a true
competitive advantage.
But is this competitive advantage meaningful? In the final chapter, well explore
that very question with a cost-benefit analysis for professional services firms of
various sizes.

Firms that do regular


market research often
have a true competitive
advantage.

Professional Services Guide to Research

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?

The benefits of market research


While there are many intangible benefits of market research on your current
and prospective clients, such as better targeting and a more accurate
understanding of how your firm is perceived, there
is a much more tangible and direct measure of
benefits. In a study of high growth professional
services firms, we found that professional services
firms that do systematic, structured research on
their target client groups are more profitable and
grow faster (see Chapter 1).

There are many intangible


benefits of market
research on your current
and prospective clients,
such as better targeting
and a more accurate
understanding of how your
firm is perceived.

Professional Services Guide to Research

23

This relationship is documented in the figure below.


Profitability
Growth

30.7%

% of
Revenue

Growth
Rate

19.9%
17.7%

16.6%

11.0%
2.8%
No Research

Occasional Research

This figure shows the growth rate and profitability


of professional services firms that do no research,
occasional research or frequent research (at least
quarterly) on their target client group.
Because of the specificity of these findings, we are
in a position to project the true economic benefits
of market research for services firms. But first lets
consider the cost side of the equation.

Frequent Research

The cost of a specific


market research program
is determined by the
research method used and
the sample size needed.

The cost of market research


The cost of a specific market research program
is determined by the research method used (face-to-face interviews are more
expensive than phone interviews, for example) and the sample size needed.
Larger firms will typically require a larger sample. Taking these variations into
account, we have estimated the typical research costs for both occasional
research (once per year) and a program of frequent research (quarterly).

Professional Services Guide to Research

24

Below are estimated costs for a single round of research for three sizes of
firms:

Small ($5M revenue): $10,000


Medium ($20M revenue): $20,000
Large ($200M revenue): $40,000

For a program of frequent research (quarterly) you can simply quadruple these
estimates.

The return on investment of market research


With estimates for the costs and economic benefits we can now calculate the
return on an investment in a program of market research for a professional
services firm. For each of the three firm sizes well subtract the total research
cost from the economic gain. This shows the net increase to top line revenue
and bottom line profitability over a one year period.

Small Firm ($5M)

1.40M

1M
Net Revenue Increase
Net Profit Increase
745K

735K

500K
412K

Occasional
Research

Frequent
Research

Professional Services Guide to Research

25

Medium Firm ($20M)

5.58M

4M
Net Revenue Increase
Net Profit Increase
2.98M

2.94M

2M
1.65M

Occasional
Research

Frequent
Research

Large Firm ($200M)

55.8M

40M
Net Revenue Increase
Net Profit Increase
29.8M

29.4M

20M
16.5M

Occasional
Research

Frequent
Research

Professional Services Guide to 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.

Market research is a relative


bargain for larger firms.

Putting research to work in your firm


Sadly, market research is not magic. To enjoy its generous benefits you need
to take it seriously and systematically use it to adjust strategy and shape staff
behavior. As it turns out, well-conducted and well-presented market research is
often a powerful catalyst for change.
Historically, professional services marketing has been driven by hunches
and habits. But most professionals rely on logic and facts in their work.
Consequently, they are often refreshingly open to new data on their clients
behavior and perceptions.
Hmm. Perhaps that is why it works so well.

Professional Services Guide to Research

27

Conclusion

Research has not always been a common feature of strategy or marketing


in professional services firms. While this situation is understandable from a
historic or firm culture perspective, it is a big miss.
Professionally conducted research clearly has a place in a modern firms
marketing toolkit. If for no other reason, it provides a clear competitive
advantage.
It allows you to build your firms strategy, services offerings and marketing plans
on a sturdy foundation. With that, everything else is easier.

Professionally conducted
research provides a clear
competitive advantage.

Professional Services Guide to Research

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

Help Us Make this Guide Even Better


We want to hear from you. If you have any suggestions to improve this
resource, please drop us a line: info@hingemarketing.com.
Thank you!

Professional Services Guide to Research

29

Additional Resources

Online Marketing for Professional Services


www.hingemarketing.com/online-marketing-book
Spiraling Up: How to Create a High Growth, High Value Professional
Services Firm
www.hingemarketing.com/spiralingup
Online Marketing for Professional Services Firms: How Digital Marketing
Delivers Faster Growth and Higher Profits
www.hingemarketing.com/online-marketing
The Online Lead Generation Guide for Professional Services Firms
www.hingemarketingcom/leadgenguide
Website Planning Guide: 7 Key Steps to Creating a High Performance,
Lead-Generating Website
www.hingemarketing.com/webplanning
The Hinge Rebranding Kit
www.hingemarketing.com/rebrandingkit
Read and subscribe to the Professional Services Marketing Blog
www.hingemarketing.com/blog

Professional Services Guide to Research

30

Ask About Our


Branding Program
Our Branding Program is designed to carry your firms reputation
confidently into the marketplace by giving you a suite of powerful
branding tools. Based on extensive research and analysis, our
branding strategies increase your firms credibility and visibility
in your industry. These services will also differentiate your firm
and provide clear, compelling messages for each of your target
audiences.
For more information, call 703.391.8870 or email us
at info@hingemarketing.com.

Professional Services Guide to Research

31