Wednesday, 06 August 2014 17:42

Intuit takes the accounting software market, and Xero, head on with SMB study Featured

By
Intuit Australia MD Nicolette Maury Intuit Australia MD Nicolette Maury

The major new player in the Australian accounting software market, giant US firm Intuit – makers of Quickbooks - has upped the ante in its quest for marketshare and customer acquisition, with a direct hit on competitor Xero.

Casting aside the market ‘noise’ from the likes of the New Zealand-based Xero, Intuit has gone straight to its primary target market for accounting software, the small business sector, and asked it to compare their first-time use of Quickbooks and Xero’s suite of accounting solutions.

In what Intuit Australia Managing Director Nicolette Maury says was an exercise aimed at getting above all that market noise and ignoring the comments from competitors, the company commissioned an independent research firm to ask 134 small business operators who had never used either product before to give them feedback on their first-time experience.

“As the world’s number one accounting software provider for SMBs we are a ‘challenger brand’ in Australia and we wanted to focus on what we knew about our prospective customers and really gather some impartial feedback on what prospects thought of the different products that are in the market right now,” Maury explains.

“And that basically proved what we hoped and expected,  that Quickbooks comes out on top (ahead of Xero) when it comes to some of the basic business critical tasks that small businesses need to do in the accounting software space.

And, Maury is quick to trot out the key results of the research study to back up the apparent SMB preferences for Quickbooks over the Xero solution, including that eight out of 10 who tried both QuickBooks Online and Xero said it is easy to use QuickBooks Online compared to five out of 10 for Xero.

According to Maury, the results of the research study -  available here  -  show that ease of use and the ability to complete tasks quickly and with confidence are key to QuickBooks Online's status as the “option that Australian small businesses prefer.”

“The numbers were overwhelmingly in favour of QuickBooks Online - particularly for ease of use and speed - all valuable things for a small business owner who wants to focus on running the business, not learning an accounting system.”

Maury says one of the primary reasons for commissioning the research – undertaken last month by local Australian agency Symplicit – is that many of the accounting software product reviews out in the market at the moment are out-of-date. “The technology has moved considerably over the past 12-months, and we wanted to see what small businesses themselves say about our products rather than what competitors or others might say.”

Maury also points to other key findings of the research which she says show the preference for Quickbooks over Xero by participants in the study who trialled both products, including:

•    Twice as many found it extremely easy and were more confident in creating an invoice using QuickBooks Online compared to Xero

•    Nearly twice as many strongly agreed that QuickBooks Online has a modern look and feel and is easier to use compared to Xero

•    Three times as many who tried both QuickBooks Online and Xero had an 'excellent' experience with QuickBooks Online

•    77% agreed it's fast to finish tasks in QuickBooks Online compared to 49 per cent for Xero

The decision by Intuit to undertake comparison research on their own Quickbooks solution and the Xero solution gives some insight into the war of words and competitive pressures in the Australian-New Zealand online accounting software market over the past 12-months or more.

As Maury acknowledges, Intuit sees itself as the ‘challenger’ brand in the ANZ market, and there’s no doubt that the company that stands to potentially lose marketshare to the big American is clearly Xero, the New Zealand firm led by founder and current chairman, Rod Drury.

Drury, a New Zealand entrepreneur, has been on the front foot for many months, spruiking the considerable and impressive success and exponential year-on-year growth of Xero in not only the Australian and New Zealand market, but in overseas markets like the UK and the US. Drury also flagged at Xero’s recent annual meeting a potential listing in Intuit’s home market of the US.

Media reports out of that meeting had Drury commenting that Xero's cloud-based product suite was “outgunning Intuit's attempts to move into the cloud,” and that the company would benefit from establishing strong positions in the Australian and UK markets before embarking on the US.

While Xero has been aggressively marketing itself and its products in the Australian market for over three years now, Intuit is a relative newcomer to the Aussie market in its own right with the Quickbooks brand, which was previously marketed and distributed here by Reckon, which now markets accounting solutions under its own brands.

Intuit has established its own Australian operation, headed up by Maury, and has been actively pursuing small businesses across a broad range of industry sectors with its Quickbooks Online solution, including added enhancements localised for the Australian market.

“We’re super excited about this market (ANZ) and the progress we have made so far,” Maury says.

On the criticisms and public comments by Xero’s Drury, Maury simply says: “Our focus here is really on building the market in Australia and this is why we focused this study on Australian small businesses, and we wanted to hear directly from them about their experience with Quickbooks rather than relying on other opinion and hearsay in this space.”

While Intuit, like its competitors, goes after a share of the market with accounting firms and bookkeepers, Maury makes it clear that the priority target for Intuit is the thousands of small businesses across various market sectors in Australia. The main focus is on small businesses with less than 20 employees and, in addition, the ‘trusted’ accounting advisers that work with these businesses.

“Our focus in on growing small businesses and enabling them to be successful,” Maury says.

“However a big part of that is also focusing on their accounting and bookkeeper adviser who is their trusted partner.

“So, while we have a strong focus on SMBs we also have a very strong partnership with accountants and bookkeepers who use rather than recommend our product.”

Of course, the Quickbooks brand is well known and well used in the Australian market over many years, but it is Intuit’s entry into the market in its own right that adds another layer to the fight for corporate brand recognition, on top of the aggressive competition for product marketshare. And, there's also very stiff competition from other market leaders like MYOB and Reckon, and three or four other firms.

Maury says there is already a growing acceptance of the Intuit brand and it is “getting known” here, although she acknowledges there’s more to be done. “The Intuit brand certainly help. There’s 30 years of history which brings a great deal of trust with it, and the fact that Intuit designs simple products that delight customers, is certainly a strength of having Intuit associated with Quickbooks.”

“The Quickbooks brand is known and loved in Australia and that’s one of our strengths coming into the Australian market…and people understand what Quickbooks is and there’s a lot of great history there.

“And what we are finding is that people are embracing Quickbooks online and are loving what we’re showing them. In some cases there’s an education process about the cloud but once they use Quickbooks they get a real delight from experiencing the cloud. They love the functionality and the ease of use,” Maury concludes.

Intuit has also published the opinions of two of the companies which participated in the research study, trialing both Quickbooks and Xero:

•    Richard McNair, office manager at Bellson Electricin Carringbah NSW, has been using a desktop product for around six years and said as a result of this trial he is planning on moving to the cloud, with QuickBooks Online his pick over Xero.

"Xero was a bit confusing for a first time user. With QuickBooks Online it was quick and easy to get started. I had no problems. I was completely confident with completing key tasks. I had a 'wow' moment when invoicing with QuickBooks Online - it was so much easier than I thought, so simple and quick.

"I found QuickBooks was better than Xero. It was easier to use and more intuitive. I much preferred the interface on QuickBooks too. It was simpler and I liked the colour scheme with the great money bar feature."

•    Emily Johnson, an accountant and owner of Count Em, said she was amazed at how far QuickBooks has come since she tried the desktop version back in 2009.

"QuickBooks Online is faster, easier to use and more client-compatible than Xero. With QuickBooks, I felt like I would be able to save time which I could then spend on other parts of my business.

"As an accountant with more than seven years' experience, I found Xero frustrating and disappointing. If I can't use it from the go-get, how could I recommend it to my clients?"

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