A nice exchange that shows why new business will trump old…
- User cracked his MYOB accounting install disk
- Enquired to MYOB who offered to replace disk for $40
- Commented on a technology forum
- Third party suggested he switch to Xero on-demand accounting
- User expressed a desire but concern at the comparatively high price
- Xero came to the party and offered a 12 month subscription – gratis
This is interesting on so many levels;
- A model that utilises install disks that get broken and lost is old school. Imagine the logistics of regular software updates. Charging for a replacement disk is just plain bad
- While I imagine the forum moderator told Xero of the thread – the nimbleness with which they made the offer to the customer indicates and understanding of both virality and social media
- The key to building customer numbers is to overcome the barriers to entry – the free 12 month subscription could very well result in both many years recurring revenue from this customer, but also uptake from people who witnessed the interchange
All credit to Xero for coming to the party – something tells me the other protagonist in this story won’t even be aware it occurred…. prove me wrong.
The ironic thing here is that I’m the person that recommended Xero in the above mentioned Geekzone thread but I’m seriously considering cancelling my Xero subscription as it’s just too pricey for what I need. I put very few transactions through Xero and the $49pm fee is just getting too much. I’m de-registering my company from GST but I will still have to pay $49pm to use Xero as only “additional” non-GST registered companies are charged $24pm (which is a price I’m more than happy to pay). Like the poster of the Geekzone thread I think Xero’s pricing is the largest barrier to entry – especially for non-GST registered organisations.
In addition, the crazy thing here is that I’ve recommended over a dozen customers to Xero but have received no benefit myself as Xero has no referral programme. I’m now left with a bitter taste in my mouth after Xero offered a 12 months free subscription in this case. 3 months free I could have understood, but 12 months is just rubbing it in the face of those of us that only had the 30-day free trial – all in the name of PR.
Cheers Craig – interesting comments you make. Yup pricing is a barrier to entry, I guess we all need to have faith in the promises of sufficient added value from SaaS delivered products to justify the cost. Automatic bank feeds are a start but I’d hope (and expect) to see more functionality that only SaaS can deliver over the coming months