The problem with scale

When business owners start out, they invest in solutions and services and products that can meet their needs at the time. Of course they have dreams for running a big organization but until they get there, they only need to solve the problems of a small organization.

For that reason, business owners invest in horizontal solutions – from accounting services to payroll services to delivery services, and so on. The business owner just buys solutions that they think will do the job. However, as the company grows, their real needs become more apparent. Industry specific requirements arise and a more targeted (or “vertical”) solution becomes necessary. Those businesses then tend to shed their horizontal solution for a vertical solution at some point along their growth trajectory.

Years ago, that transition from horizontal solution to vertical solution happened as businesses got into the millions of dollars of revenue. But, thanks to a variety of consumer trends and technologies, vertical solutions are moving down the price ladder and becoming more and more available to smaller businesses, too.

Take us, for example. We don’t try to be all things to all businesses. We’re a great solution for small businesses and especially for freelancers, entrepreneurs, and coaches. Or consider a solution like Freshbooks, which offers really easy and useful invoicing for a similar market. A giant bricks-and-mortar company with zero online presence but thousands of employees and millions in revenue might not find us or Freshbooks very valuable. We’re both vertical solutions for a specific market at a fairly small-business level.

And we’re not alone. Many other vertical solutions – from accounting solutions to payroll to delivery and fulfillment solutions are moving down the price ladder to become accessible to smaller and smaller companies.

So what does that mean for the horizontal solutions market? It’s shrinking. There are still plenty of providers in that market but they are starting to realize that vertical solutions are the answer to keeping business owners who started with them (but have grown to the point where a horizontal solution is no longer meeting their needs). Take a company like SAP which has traditionally provided vertical solutions to REALLY big companies. They’ve introduced services for small businesses, too, leveraging their vertical solutions into mid-markets.

There are a few reasons for this shift and if you want to read more information about horizontal accounting and what the trends are, check out this article from Accounting Software Advice blogger Austin Merritt: “Is Horizontal Accounting Software Dead?”

Jessica Routier, IAC-EZ

More on Customer Service as an Investment

Just a couple of days ago I wrote about the customer service you provide in your business as being an investment and we mentioned a Freshbooks blog from way back. While thinking further about this issue, I was clicking around and found an article in a newspaper that referenced… Freshbooks and their take on customer service.

So, since it’s so closely related to what I was just talking about a couple of days ago, I just had to share this article, too. Find it at The Globe and Mail. The article is written by Mark Evans, a consultant who uses content and social media to help businesses get more attention.

Evans writes that customer service is not just about correcting bad things from happening but also about building and leveraging a positive experience. For example, he mentions connecting with the customer to touch base with them and to show them that you value the relationship. And here’s how Freshbooks plays into the subject: Evans quotes Mike McDerment, CEO of Freshbooks, who says that a happy customer provides referrals. Although I might have disagreed with this a few years ago, I think that today’s socially connected world makes that true now. Just look at what interactions are like on Twitter: One person might tweet “boo! Invoicing day. My least favorite day of the month.” And someone else might respond with “Try Freshbooks. I like them.” A simple referral from a happy customer can go a long way.

And just when I thought I was wrapping up the topic, there was a link at the bottom of the article to a blog by Ben Yoskovitz. Yoskovitz is an entrepreneur with an impressive background and lots of interesting things to say and in his blog post , he reviewed the book BAM: Delivering Customer Service in a Self-Service World. His review/summary is incredibly helpful as he lists 9 points from the book that every entrepreneur should pay attention to. Number 1: Tie customer service to revenue and profits. Brilliant! Number 5: Tie customer service to surprise. There are others but those were my two favorites. Read this blog , change your customer service, and transform your customer’s experience!

Jessica Routier, IAC-EZ

Customer service: Expense or Investment?

When I was a kid, my parents needed a washer and dryer and they saw a set advertised so they bought it. It turned out not to be very good and they had a terrible time trying to get the company to service the products. But my parents had little recourse, besides haranguing the manufacturers. I was just thinking about their experience the other day and then comparing it to my own: Recently, I spent a lot of money on a new furnace for my home. The furnace is generally pretty good but there was a service issue that should have been fixed right away and wasn’t. I called and called and called. When the company finally responded, they sent several “specialists” out, none of whom could fix the problem, and every visit was scheduled for one day but the specialist came a day or two late. Unlike my parents, though, I don’t have to just “tough out” the situation and hope for that my constant phone calls would help. Instead, I can go online to my personal or professional network of thousands and I can make one single tweet or wall post or blog. And? The problem gets solved right away. 

Customer service has shifted yet again. Customer service used to not exist at all. Then, it was its own department – just a guy with a phone. Then it became trendy to call the sales staff “customer service” (even though they did mostly selling and almost no back-end support service). Today, lots of businesses claim to have great customer service but  really don’t.

The reason, as suggested in this excellent (but slightly older) post by Freshbooks, there is no clear and obvious ROI in customer service. Rather, the Sales department has clear metrics – sold products or not – but “happy customers” is ethereal at best. So, because companies can’t easily quantify the customer service experience, the customer service department (or skillset) is often the first thing to go. 

Unfortunately, that’s a mistake. A business may not easily be able to quantify customer service with obvious and conventional metrics, but the results of customer service are clear. If you ask me, I think customer service metrics can be found in the following places:

• Customer retention
• Long term profitability
• Ratio of positive-to-negative statements on social networking sites

How can your business make an investment into customer service? Here are a few ideas:

• If you can’t afford to hire someone new, train your staff to watch for negative customer service signs and – this is huge – empower them to address those signs immediately.
• Run frequent searches on various social networking sites for references to your company. For example, use HootSuite or Tweetdeck to keep a search running for the name of your company (along with various misspellings) to see what people are saying.
• Google the name of your company plus the words “hate” or “sucks” and see what comes up. While you may not be able to address every concern of a vocal minority, it’s a good way to see where some potential common problems are.

 Jessicca Routier, IAC-EZ

Our latest release!

We’re so excited about our latest release, version 1.5. We call it “You Rang” because it reflects many of the requests and enhancements that you specifically asked for… and it comes at a time of the year when a lot of bells ring. (Seasonal movie quote: “every time a bell rings, an angel gets its wings”).

So, here’s what we’ve created for you in this release:

New Features
You’ve asked for it, you’ve got it! We’ve brought in some account-based features for those of you who choose to use the account-based method of bookkeeping instead of the transactional-based method. (But hey, if you’re happy with the transactional-based method, you don’t need to switch).

Specifically, you’ll be able to…

• Add your balance sheet accounts
• See your balance sheet
• Add your bank accounts
• Reconcile your accounts
• Track your balances
• Show your account on your dashboard

And, you’ll also be able to remove archived, viewed messages.

All these changes have also necessitated a change in…

User Interface
The User Interface has been updated because we had to squeeze in all of these really cool features somewhere. We busted out the shoehorn we got in our stocking and made it fit!

Sneak Peak at 1.51/Tax Time!
As we gaze into our crystal ball for the new year, we are sorry to point out that it’s tax time. But, to help make tax time easier and maybe a wee bit more fun, our upcoming release – release 1.51 – will be related to tax time.

Jessica Routier, IAC-EZ