It is hard to attend a business workshop or networking event without hearing people raving about the new cloud accounting service, Xero.
Intriguingly, no matter who you use as your accounting software vendor, there are some interesting marketing lessons here.
[NOTE: Before I continue, a quick note that tomorrow, Tuesday, July 9, 2013, I’ll be presenting a webinar on how to blog for your business. It is a one hour program in which I will share the fundamentals of my approach and the reason small to medium business owners NEED to be aware of blogging and, better still, actually doing it. It starts at 1.30pm Adelaide time and you can sign up for $55 here: Blogging for SEO and Thought Leadership webinar with Steve Davis and guest Wendy Perry. If you know anybody in business who has not the foggiest idea about blogging but a hunger to market their business better online, I’d appreciate you forwarding the link to them. Talk to you then! – Steve Davis]
While today’s blog post is about accounting software it is NOT about comparing accounting systems. It is about the marketing and the shifts in market momentum from which I think we can all glean some insights.
Dealing with a Goliath in your market place
Most readers will know about MYOB software, it has been around for many years and has positioned itself as the giant in the marketplace, despite numerous competitor products claiming technical superiority.
I know some vendors who claim to have a far better product than MYOB.
Their dilemma is that MYOB has connections with accountants sewn up (at least the perception that they do) so clients are thinking about more than just the technical merits of an accounting software package, they are thinking about all the go to woe systems and settings they have in place.
This is called a switching cost. And the dilemma for MYOB competitors has been that many entrepreneurs and SME owners are so repulsed by accounting that they perceive far greater pain than might be the case whenever contemplating a change.
If you have a giant competitor in your market and are suffering low sales conversion rates, it might be time to consider or reconsider the switching costs your new clients will encounter, or PERCEIVE they will encounter when moving to your products or services.
Switching costs and the perception of them, can range from actual costs in changing systems to convenience factors.
I know an inferior cafe that still gets my occasional business because they are positioned a little more conveniently than their superior competitor.
If you are a challenger in your market, take heart from the entry of Xero into the accounting services field.
While potential clients can inflate actual switching costs, so, too, can Goliaths over inflate their comfort and safety as market leaders.
This might be part of the reason why Xero has been able to seemingly blind side MYOB and infect business networking discussions with great buzz.
Choosing the right cows to milk
Perhaps the greatest strategic blow that Xero has delivered in its advance against the MYOB stranglehold on Australian accounting, is its approach to accountants themselves.
As noted in a Smart Company article last year, MYOB vs Xero: The accountancy software joust, MYOB has long relied on accounts as an income stream, charging them for software and ‘partner programs’ with the benefit of holding all the power.
The strategic insight for Xero has been to view accountants not as cows to be milked directly but as partners who can bring the cows home.
By offering accountants free software, paid for by their clients, Xero has been able to turn accountants into a powerful marketing force among their small to medium business customer base.
As many of us know, if your accountant, as a trusted advisor in all things finance, suggests moving to Xero, many clients will fall into line.
Couple this with anecdotes about doing things faster, reducing accountant and bookkeeper costs, etc, and suddenly the Goliath is under pressure.
Remember, this article is not about choosing accountancy software, it is about the marketing principles on display and this move by Xero is worth reflecting upon.
It could be invaluable, this week, to find some time to reflect on your business and sales partners, and those influencers out there who are advocates of your enterprise, and consider whether you are milking the right cows.
To switch metaphors, if there is a ‘goose’ helping you lay golden eggs, are you allowing enough time, energy and ‘margin’ to ensure it stays healthy, engaged and productive?
In summary, sales partners and influencers need a structured approach to keeping them loved and informed because your success depends on their success and satisfaction with their roles.