Part of what we’re about at Xero is sharing our experience in growing a global business. I saw this video today which is an interesting marketing case study.
Anyone who knows us knows we compete pretty hard against MYOB. MYOB is one of three incumbent winners of the Windows generation of installed desktop software. In Australasia MYOB won, in the UK Sage and Intuit in the US. We have nothing personal against MYOB, Sage or Intuit. They have nice people working there and they no doubt mean well, but as business owners ourselves we found that using their desktop software in the early to mid 2000’s was sapping productivity and made the administration side of running a business too hard. We thought we could do a lot better.
We also saw a fundamental shift to web based applications where business owners and accountants could collaborate on a single copy of the clients financial data.
MYOB, Sage or Intuit have done a lot of growth by acquisition. By the early 2000’s they all had a broad set of acquired products with different code bases and teams. Having a lot of experience in the software industry, and having sold businesses into public companies our hypothesis was that the incumbents in small business desktop software had lost their ability to innovate and would find it hard to move into the next generation of web based software. So far that assumption has been proven correct – though we expect to see new web offerings this year.Writing software is what we do. It’s still a challenge. But our biggest challenge is getting known. It’s marketing.
One of the many things I learned when involved with TradeMe, was the strategy of attaching yourself to a competitor. TradeMe, led by the master MOD, was sensational at this as they challenged new markets. Whenever the incumbent got press, TradeMe got a mention. Already some new companies are attaching to Xero as well which I quite like as it’s an indicator of success and builds our credibility.
Therefore a marketing strategy for Xero has been to link ourselves to MYOB. It’s been useful to have a direct competitor to sell against. Over the last few months we’ve made a few inroads into the Australian market. One of the best things that MYOB did for us was conduct a survey to all of their partners mentioning Xero. Then a couple of days ago the CEO of MYOB did this video interview for BRW magazine.
These examples show the power of the ‘attach to your competitor’ strategy. We could not have paid for a better targeted message.