As an agency, PAN is focused on two broad categories: B2B technology and healthcare. Within the world of B2B tech, a category that I’ve always found alluring is SMB (small-to-medium business) solutions. It’s tempting because it’s big (there are more than 29 million small businesses in the U.S. alone). And it’s interesting because it’s complex and diverse. From law firms to IT consultancies, from your local real estate firm to your neighborhood investment advisor, all are SMBs … yet these businesses are extremely different from one another.
Despite the contrasts between them, all of these companies share at least one thing in common: the need for an accounting solution. And while one company – Intuit – has traditionally dominated the small business accounting segment, the rapid adoption of the cloud by emerging businesses has brought new competition to the space, shifting it from staid to spicy.
So, who is sparring for success in the SMB accounting category? Intuit’s QuickBooks online is the big kahuna. But a growing number of start-ups are taking a run at the space, gunning to outfox QuickBooks with services that are even simpler to use and by providing features that QuickBooks lacks.
For example, not only is Xero extraordinarily easy to use, it can also handle expense reporting and multiple currencies and supports several different payment processors (QuickBooks supports only QB Payments, which is pricier than other alternatives). Zoho Books (another Silicon Valley player) offers similar goodies and is also less expensive than QuickBooks. And for SMBs that are both very small and very thrifty, Wave Accounting offers a simple accounting solution that is free (the service is ad-supported).
Taking on a behemoth is no easy task. So how could these newcomers supplement their product strategy with marketing that helps them take a bite out of Intuit’s hide? Below are three major areas that these emerging accounting software platforms should consider before making their next move:
Challenger brands should focus on specific segments that Intuit hasn’t yet targeted and push to develop both visibility and credibility within them.
For example, if Intuit has focused on building contractors, Xero could pursue general freight trucking, a category posting 25 percent YOY growth according to financial information company Sageworks. Rather than fish in the same pond with Intuit and spend money fighting over customers, the upstarts can focus on entirely different ponds.
Up-and-comers should also double down on content marketing. Having selected target segments different than those emphasized by Intuit, challengers should delve deeply into the creation of content that is helpful to entrepreneurs in their chosen verticals. Blog posts, video tutorials, podcasts … such useful, targeted content will not only help companies like Xero and Zoho to build credibility within specific categories, it will also drive targeted search engine traffic from companies within those categories that are searching for small business accounting solutions.
The challenge with the SMB segment is that there are few “general purpose” media outlets that appeal to businesses across a wide variety of categories. Apart from Inc. and Entrepeneur, the pickings are slim. And this makes good sense. Most entrepreneurs are particularly interested in reading about other small business owners who are having success in their sector. If I run a frozen yogurt shop, it’s probable that I’ll learn more from others who are doing the same than by reading a publication for morticians. So, I’m reading The National Dipper … and not American Funeral Director.
The explosion of targeted business media makes for a plethora of opportunities for the cloud accounting contenders. With their segmentation strategy as their guide, these companies should be identifying and courting editorial coverage from hyper-targeted media. I can guarantee you that Intuit doesn’t have time to be pursuing journalists from Overdrive and Keep on Truckin’ News. But writers from these outlets would be pleasantly surprised to hear from a Xero or Zoho. And resulting coverage would be ideally focused.