SaaS vs Shrinkwrap or Never trust a company not on Twitter

While eating lunch today, I started to think about the growing complexity of my company‘s expenses and decided it might be a good time to start looking at accounting solutions. The fact that my research began with a tweet is indication enough that I probably don’t fit anyone’s average consumer mold. But, I think some of the insights that came out of my experience are pretty fundamental and potentially extend beyond the ‘early adopter’ echo chamber.

First, I started down the conventional route by checking out market (and marketing) leader QuickBooks. Through some quick web searching, I found a few authoritative sounding comparisons that pegged QuickBooks as the best value for basic users (we’re just at the lower bound of even needing this stuff) — with the notable exception of the Mac version, which apparently gets less product development love than the Windows one. At $180, QuickBooks wasn’t really that daunting on the financial cost front. But, I was already starting to cringe on the usability/time cost side.

What I found myself really wanting was a web app (like Mint or Wesabe) for business accounting — something with a lightweight interface for connecting and organizing data from my financial services providers all in one place. And while I was researching products that might fit this bill, I started to think about why I had this innate preference for a web app (SaaS) over shrinkwrapped software. The business model of packaged software invites feature bloat, because it’s upgrade driven and you need to continually find ways to justify why Thingamajig 2009 Pro Edition™ is so much better than Thingamajig 2008 Pro Edition™. Software as a Service businesses have a much different (and arguably greater) challenge, they need to continue to create value for their customers month after month. Sometimes that value comes in the form of new features, but it doesn’t *have* to. So, you end up with a much more customer-centric product (what customers *know* they want after using it, not what they *think* they want before buying it — as humans are notoriously bad predictors of our own happiness) and a vendor who is truly interested in addressing your customer needs. So, unless there is an element of the problem a given software product is trying to solve that inherently benefits from the advantages of the desktop (i.e. local storage, access to the file system/peripherals, superior performance), I’d rather have the SaaS version.

The other thing that was on my mind when doing this evaluation was my incredibly positive recent experience on Twitter with the CEO’s of iPlotz and Balsamiq, both of which happen to be SaaS products. I realized that it really spoiled me and there’s no way I’m ever going back to the old regime of captive audiences and passive customers. So, my new rule is “never trust a company not on Twitter.” Now, that’s a bit reductionist — and, in Intuit’s defense, they are actually on Twitter (hi Alison 🙂 ). The real point is that today’s customer service equation needs to include how responsive the company is to your new product requirements and feature requests, not just how quickly they fix something when it’s broken or answer a question when you’re too lazy to read the instructions. As much as I appreciate Intuit’s presence on Twitter, I highly doubt Alison is able to change Intuit’s release schedule to get that new feature I want out to me sooner. By virtue of the packaged software business model, she is not adequately empowered to address my customer needs.

Through my research and a very handy post on my friend Leonard’s blog (thanks for the tip Carrie), I found two SaaS solutions for small business accounting: LessAccounting and Xero. They’re both about the same price ($~25/month), and Xero seems to have a slightly superior feature set (automatic syncing with your online accounts is a biggie). But, LessAccounting clearly had the edge in customer interaction. LessAccounting has a very active corporate Twitter account and both founders have personal accounts, they use Get Satisfaction and there are 4 topics on their Get Satisfaction page that have been updated in the last 24 hrs (I also checked out the activity on the Get Satisfaction accounts of both founders), and, last but not least, they have a sense of humor (be it a slightly mean one 🙂 ). Xero has a very active corporate blog and they seem to be quite responsive to their customers’ comments. But as a prospective customer, I would really like to have some better ways to interact with Xero than sending them an email or leaving a comment on their blog. (Update: Phillip from Xero responded in the comments that they do in fact have a Twitter account and an in-product feedback mechanism.) Get Satisfaction and User Voice are both great names, because when you use their products as a company that’s exactly what you do: give your customers a voice and the satisfaction that it’s being heard.

When shopping for SaaS, you’re choosing a partner in innovation. So, the future direction of a product is maybe an even more important consideration than the current feature set. And while LessAccounting can surely replicate Xero’s features, can Xero replicate LessAccounting’s customer-centricity? They both offer 30 day free trials, so I’m going to try both and make a decision in a month. And who knows, at $180 for QuickBooks Pro I may decide shrinkwrapped software is the more sensible way to go this time around (but, that doesn’t mean I have to like it 😉 ).

Update: Wow! This is starting to freak me out. I write these things to capture the distillation of the things I see out on the interwebs that I like and dislike, mostly for my personal benefit in thinking about my own business. I don’t do so really anticipating to hear back from the companies about whom I’m writing, but I guess I’ll just have to get used to this whole blogging thing 😉 .

Thanks to Phillip from Xero and Allan from LessAccounting for your responses in the comments and for engaging in the conversation. Phillip corrected me that Xero does have a Twitter account, which I updated in situ above.

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A Twitter Marketing Success Story

A couple of days ago, I wrote a post on my company blog about Twitter from a marketer’s perspective (I think it’s pretty good, so go read it when you’re done here 🙂 ). This post is about my experience with Twitter on the other side of the aisle — not just as a consumer, but as a *target* of marketers (in a good way).

Last night I was trying out iPlotz, a new online tool for doing product design. I own a license for the desktop version of Balsamiq Mockups, a competing product. But, iPlotz had a couple key features Balsamiq didn’t. So, I was really bummed when iPlotz changed the limits for free trials without warning (the day before I had created 7 wireframes in my iPlotz account, and now it was telling me the limit was 5). Since I was sitting at my desk at home and had no one to bitch to, I bitched to Twitter:

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I wasn’t really expecting a reply from anyone, let alone one from iPlotz. (At most, I had been hoping to publicly shame them a little bit for the not cool practice of changing the rules without notice.)

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I was flattered that someone at this company was actually listening to me. All of a sudden I went from being in a bitchy mood about their policy faux pas to wanting to compliment them.

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Wow! I was kinda just being patronizing before, but this actually sounds like a really cool product. Even though I just dropped $79 on Balsamiq a few months ago, I might have to buy *this* one too when it drops.

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And that’s that, right? If it had been, it would have been an interesting (if not unique) example of an up-and-coming start-up reaching out to an ‘early adopter’ through social media.

But, that wasn’t the end. When I woke up this morning, I found a reply from Balsamiq.

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It turns out they *do* have the main feature I’ve been wanting, I just didn’t realize they had released an update. And in learning about this one feature I wanted, I also learn about another new feature I love.

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Well as long as I have their attention, I might as well speak up for that other feature I’ve been longing for.

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HOLY SHIT!!! Not only are they working on the new feature, but they’ve put its design up for review by their users (via Get Satisfaction). I’m in LOVE! First, to put in my $0.02 on the proposed feature design. Now, where’s that tweet Robi sent a couple days ago asking for design software recommendations (on which I originally remained silent)?

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I know Robi can be a cheap bastard sometimes, so I’d better make clear to him how great this really is. 😉

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First of all, this whole episode struck me as rather phenomenal — I literally just had 2 brands (and not just some PR flacks, but the CEOs of both companies) competing for my business on Twitter! And while having Pepsi and Coke compete for my business on TV is the main reason I don’t watch it, I came away from this experience on Twitter with a very positive sentiment about both companies (even though I came into it dissatisfied with both of them). And it’s not just that I was flattered to be conversing with the CEOs, it could have been any employee as long as they were empowered to address my needs (like Frank aka @comcastcares).

But in my mind, this goes beyond Twitter and really showcases the power of social media as a CRM tool (what is the difference between ‘marketing’ and ‘CRM’ other than connotation, really?). As Debs wrote:

The social web can actually provide much deeper and more interesting connections for customers and companies than simply being a marketing channel – it ties into the entire product lifecycle.

By showing that they’re listening to me and bringing me into the process, Balsamiq just turned me from a disenchanted user to an enthusiastic evangelist. Not only are they tolerating my Monday morning product management, they’re inviting it. Bringing your customers into the product development process has the dual benefits of helping you build better and more customer-centric products and making your customers your most passionate sales people (because after all, it’s their product too).

Now, go buy Balsamiq Mockups! 😉 (And, go read my post on quick wins for brands on Twitter.)

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