Trends and Insights

Key Findings from Inovautus Consulting’s Annual Growth Outlook Survey

The results are in from Inovautus Consulting’s fourth annual Growth Outlook Survey.

Inovautus first launched its survey during the pandemic to gather insights from accounting firms as they developed their strategic growth plans. This year, more than 100 growth professionals submitted responses to the survey from firms across the United States ranging in size from less than $8 million in revenue to firms with over $300 million in revenue.

The survey measures the following areas of growth:

• Firm financials

• Revenue generation

• Budget

• Client culling and growth challenges

• Marketing and sales staff

• Pricing

• Sales efforts

• Key operational support

• Technology

Results of the 2023 survey showed that revenue from non-compliance (advisory and consulting) services was up, even though most firms are seeing capacity issues with too much work and insufficient staff. Many respondents reported they were culling current clients to help adapt to capacity issues, with an average of 4.38% of clients culled in 2022.

What’s exciting about this information is the possibility that firms will take on more profitable engagements to replace culled clients. This strategic replacement will bear multiple benefits for firms.

When it comes to growth, respondents said their top challenges are:

• Staffing and capacity

• Business development

• Talent acquisition and retention

• Branding

• Technology

Respondents also ranked their top budget areas, which seem to correlate to their growth challenges and include:

• Events and networking

• Internal training

• Video and digital marketing

• Public relations

Survey respondents also said that pricing was a hot topic. Last year, firms raised rates more than in recent history, largely due to misalignment, staffing shortages and retention issues. The majority increased rates between 5% and 9.9%, with almost one-third raising rates by more than 10%.

Another interesting finding was the addition of administrative fees to client bills to cover the costs of everything from technology to administrative tasks. Administrative fees vary from an average fee of 5% of the total bill to an average of $335 when looking at flat rate options.

Firms are investing in sales training, but interestingly, few firms host their sales or marketing training in-house. Fifty percent of firms fully outsource their training, while 30% use a hybrid approach with some outsourced options and in-house support, which is ideal for long-term success.

Most firms continue to acquire new business from referrals. Interestingly, referrals from clients edged out referrals from a network. In recent years, firms have emphasized and invested in client service, which seems to generate a greater number of satisfied clients who refer new business to firms.

As firms struggle with capacity issues, it’s not a surprise that marketers are now spending time supporting other operational areas of their firms outside of their traditional marketing roles. Ninety-five percent of respondents said they are now involved in marketing for recruitment purposes, and more than 30% are involved in coordinating and attending recruiting events. Some are even coordinating interviews with candidates.

Finally, when it comes to marketing technology, the survey showed popular software applications by category:

• CRM — HubSpot

• Marketing automation — HubSpot

• Email marketing — HubSpot

• Communication — Teams

• Practice management — CCH

• Social media — HootSuite

• Design — Microsoft

More than 50% of respondents said they are not currently using any of the following software solutions:

• Marketing automation

• Project management

• Proposal software

• Podcasting software

Most firms not using the above solutions plan to evaluate software in 2023. It appears that marketing teams will be looking to leverage new technology and expand efficiencies by adding to their marketing tech stack.

The role of the marketing and business development practitioner in accounting firms continues to expand. It is clear these roles will play a significant role in the growth strategies of their firms in 2023.

AAM members can download the 48-page report with all findings here: https://inovautusconsulting.com/ thegrowthoutlookreport. Contact AAM headquarters for a discount code.

Sarah Dobek, president, Inovautus Consulting. Contact at marketing@inovautus.com.

Ty Hendrickson, training & development director, Inovautus Consulting. Contact at thendrickson@inovautus.com.