Trends and Insights

Insights from the Inovautus Growth Outlook Survey for 2022

Has the pandemic had a lasting effect on operational, business development and marketing strategies or tactics for advisory and accounting firms?

The third annual Growth Outlook for CPA Firms study by Inovautus Consulting, in collaboration with the Association for Accounting Marketing, found firms are continuing with a digital strategy, even though alternatives are once again becoming widely used.

Respondents said they expect to adjust their level of business development activities in 2022. As COVID-19 restrictions ease, firms also plan to increase spending on hosting and attending in-person events.

“I cannot wait for our firm to be able to go back to in-person events,” said Courtney Kiss, chief growth and development officer with Johnson Lambert. “I think we’re better equipped to be successful at those events with the momentum started and sustained by our digital marketing when those in-person touchpoints weren’t possible.”

Seventy firms participated in the survey covering all size and revenue segments. The results were broken down by firm size, as well as the percentage of firm revenue from advisory and CAS services.

Source: Inovautus Consulting

Marketing Spend

Across all segments, firms plan to increase their marketing budgets. The lion’s share of the funds will be earmarked for strategic digital marketing initiatives designed to make touchpoints more personalized. This includes investing in more dynamic and interactive websites, search engine optimization (SEO), marketing automation, CRM, software tools and data.

“When COVID-19 forced us to pivot, we looked long and hard at how we were going to engage clients and prospects, and digital marketing was the obvious avenue to pursue,” Kiss said. “How much we should invest and where within the realm of digital marketing we should focus was less obvious to us. The Growth Outlook study has been an incredibly helpful tool in helping us experiment with and continually adjust our digital marketing spend.”

Source: Inovautus Consulting

Growth Outlook

Nearly 78% of respondents experienced growth during the pandemic because of COVID-19 related work. Business owners needed a higher level of service to survive the pandemic.

Sarah Dobek, president and founder of Inovautus, said smaller firms with revenue of less than $2 million did not experience the same growth.

“Firms under $2 million typically work with a greater number of small business owners and individuals,” Dobek said. “These smaller clients have different needs that are typically compliance-based. Smaller firms also tend to increase fees at a slower rate — in our survey, fewer than 10% of respondents anticipated increasing their fees. Larger firms are more aggressive with their pricing.”

Source: Inovautus Consulting

Demand

As many marketers expected, firms are experiencing a decrease in demand from clients in the industries hit hardest by the pandemic, especially construction and hospitality. This is offset by increases in demand from industries that are benefiting from the pandemic such as real estate, professional services and individual clients. Nonprofit clients are also looking to buy additional services.

Job Outlook

Consistent with the findings of the previous two Growth Outlook surveys, nearly all respondents are optimistic about their firm’s long-term continuity and their own job security. Close to three quarters of respondents feel their role within their firm will not change because of the pandemic.

While hiring remains a challenge for most employers, more accounting firms are turning to outsourcing work. Less than 35% plan to hire at least one person.

Source: Inovautus Consulting

Some Surprises

“The conversation is changing on business development,” Dobek said. “Firms are looking to capitalize on existing client relationships and are developing the metrics and processes to earn opportunities. The conversation has more to do with having the capacity to deliver additional services to clients than cross-selling services. Firms are considering how to manage the growth; fewer clients with larger share of wallet is a lot more appealing.”

Even with the growing focus on digital marketing, more than 60% of firms plan to continue investing in marketing materials such as brochures. There are many reasons why, Dobek said, including the need to have collateral to support new service and niche areas, as well as the perceived need to leave something behind after a sales call.

The Growth Outlook survey revealed more than 70% of respondents will invest more in compensating marketers. It is not clear if these firms will increase current salaries or increase headcount to meet the growing need for marketing services.

Kiss said studies such as the Growth Outlook for CPA Firms help her benchmark her firm with others in the industry.

“Peer-to-peer benchmarking is critical to a strong marketing program,” Kiss said. “These surveys give me good ideas, helpful reminders and lots of sanity checks to support my hypothesis on where to invest our marketing dollars.”

You can read the executive summary and download the survey webinar at: https://inovautus.com/newsinsights/growth-outlook-foraccounting-firms/

Eileen Monesson, CPA, MBA, principal, PRCounts. Contact her at emonesson@PRCounts.com.