Here's What Best-in-Class Service Company Growth Looks Like

How does your professional services company growth compare to your peers? To help executives answer this question we captured service company growth data for The Business Growth Report.

Here's how we applied that data.

First, we measured survey respondents' revenue and profit growth figures. We ranked the companies into three performance-based archetypes of Best-in-Class (the top 15%), Medians (the middle 50%) and Laggards (the lower 35%.)

We then measured and analyzed the respondents' business expansion methods and results. That allowed us to correlate business growth methods with performance outcomes.

So, consider the below data findings to understand what Best in Class service company growth looks like.

Professional Services Revenue Growth

The research found that the average professional services company growth rate was 8.1 percent. However, what really stood out what the significantly higher result of the top performers.

The Best in Class service companies grew 96 percent more than the combined average of the Laggard and Median companies.

Professional Services Growth Rate

The data in the above column chart consists of firms in NAICS 541, which defines the category as “Professional, Scientific, and Technical Services.” NAICS 541 includes sectors that sell expertise and rely heavily on skilled workers for services delivery.

It's a broad figure, so for some additional perspective we delineated the figures for each of the below four sectors.

Professional Services Growth by Sector

The research surfaced two key points.

First, regardless of sector, the top performers consistently achieved significantly higher revenue growth. For the above four sectors, the average annual revenue increase for the best in class archetype was 13.4 percent. That was 97 percent higher than the combined average of the Laggard and Median cohorts. A difference of this magnitude should not go unnoticed.

Second, and also regardless of sector, the top performers applied similar growth programs to achieve their results.

How to Achieve Best-in-Class Service Company Growth

Now you know what Best-in-Class Service company growth looks like. The next question may be how to achieve that level of performance to grow your service company.

The research answered that question by analyzing data that measured company strategies, operational processes and technology effectiveness. The analysis identified what the Best in Class leaders do differently than their lower performing peers.

Nine business initiatives stood out. These 9 programs are referred to as evidence-based best practices and generally organized into a service company growth strategy. They are shared below.


Growth Strategy

94 percent of the top performers managed an active growth strategy. That figure fell to 52 percent for Medians and 37 percent for Laggards.

Don't confuse your business plan or annual sales plan with your company growth strategy. The latter is singularly focused on the actions that drive revenue improvements. It defines the roadmap to achieve targeted revenue improvements in the shortest time and least cost.



Only 22 percent of participants operated a centralized group with enterprise-wide revenue accountability. However, 87 percent of that small cohort was made up of the Best in Class archetype. This inverse relationship reveals that almost 9 out of 10 of the top performing companies manage revenue accountability differently than all others. Also, 81 percent of this cohort use Revenue Operations (RevOps) as their centralized revenue management program.



The top performers used more business technologies than their lower performing peers. These applications included marketing tools such as intent signals, selling tools such as sales enablement apps, delivery tools for agile project delivery, and customer retention tools such as early warning systems for at risk clients.

However, the biggest technology-related disparity among performance archetypes was the effectiveness of their AI program. The leaders ranked AI effectiveness 51 percent higher than the combined average of the Median and Laggard cohorts. They used AI for client and project solutioning, proposal and contract development, resource optimization and delivery excellence to name only a few of the more common work streams.


Services Innovation

Most clients admit they view the majority of professional services as commoditized and substitutable. Services innovation is the response to commoditization. Services innovation creates differentiation and makes the provider more relevant and valuable to customers.

The research found that few participants, just under 11 percent, applied concepts such as Design Thinking and services innovation methods. But those that did achieved both the highest revenue and EBITDA increases.


Company Culture

Survey respondents that cited an intentionally designed corporate culture achieved an average of 31 percent higher revenue growth than those who did not. These companies recognize that company culture directly impacts staff engagement and productivity.


Customer Relationship Management

Services businesses are built on repeat business. A majority of the top performers applied a customer relationship management strategy to build customer affinity and measured the ROI of their program. The majority of lower performers did not.

Customer relationships are a bedrock in this industry. The top techniques to improve customer relationships include increased relevant engagement (i.e., delivery of expertise or insights) on the customers preferred channels; delivering personalized customer experiences; delivering value beyond the service or engagement; and improving customer support.


Customer Retention

Top performers used advanced retention techniques such as client health scores and early warning systems to detect customers at risk of attrition. They also used analytics tools that went a step further to identify the root causes of customer churn so they could be remedied at the source.

The research also found that delivering differentiated customer experiences and growing customer relationships are particularly influential in increasing customer lifetime value and decreasing customer churn.


Performance Analytics

The majority of top performers cited more advanced business intelligence tools and used predictive analytics about 2.5 times more frequently than their lower performing peers.


Strategic Alliances

91 percent of the top performers actively use alliances as part of their business development strategy. That was an overwhelming majority and 28 percent higher than their Median and Laggard peers.

Make This Trend Your Friend

Successfully replicating any one of the above best practices will achieve an incremental uplift. That may be sufficient for some executives.

But others may seek more significant company growth. That requires a more holistic approach that can be achieved by replicating a mix of the evidence-based best practices.

The research was conclusive in showing the industry leaders excelled in at least five, and on average, seven or more of the nine best practices.

Professional Services Best Practices

The More You Know the Faster You Grow

Most companies apply cost of sale and SG&A expense benchmarks to ensure their costs are managed. However, most do not apply revenue and growth benchmarks. Mostly because they don't have them. Now you do.

Business growth recommendations without supporting data are just opinions. The 9 evidence-based best practices herein are born from field research and show what the highest growth companies do differently than their peers.

When you start with these findings, learn from industry peers that have achieved the greatest success and apply their methods to repeat that performance, you eliminate guesswork and pursue the straightest and shortest route to targeted outcomes.

One more thing.

Most respondents suggested they adopted all or most of the 9 best practices. However, survey questions that drilled into operational processes suggested otherwise. There is a big difference between adoption which is often a casual participation and dedication which creates expertise.

Dedication requires focused programs with executive sponsorship, budgeted resources, supporting technology, performance analytics and continuous process improvements. Dedication shifts from being a generalist to becoming a specialist.

And when the criteria for dedicated programs were considered, only the Best-in-Class performed 7 or more of the best practices.