I have had some great customer service interactions this week from the comfort of my home office at incredibly odd hours of the day.

I had mentioned in a previous post awhile back that I used to be concerned about answering email inquiries outside of office hours for the fear of being seen as “unprofessional” or “amateur”, or worse yet, to be uncovered by my customers that I work from home. 

It seems like working from home has worked well for servicing our clients.  We noticed that in our target market, many people sign up and log in outside of normal business hours.  If I can make the assumption that most of our clients are self-employed or small business owners, this would make perfect sense.  The other day, I was doing my own bookkeeping from 10 pm to 3 am on a Saturday night er…morning… and my web analytics are showing me that most of our clients actually prefer to do their bookkeeping at night or on weekends (strangely enough, no one else works at 3 am though).  I also feel that there is more authenticity in my responses because I am in my own element.  I guess there goes the idea of “work life balance” (which I think is a total myth by the way). 

One time, due to pregnancy related heart burn, I got up at 6 am to drink some soy milk.  I thought I would take this perfect opportunity to check my email and how many new sign ups I’ve got (I wake up to new sign ups on a daily basis and this makes interrupted sleep that much more fun) when I noticed an email inquiry from someone in Eastern time.  6 am my time was 9 am their time and their work day has already started.  Needless to say, the person who sent the email was pleasantly surprised and impressed at my “excellent customer service”.  Another time, a client who just signed up wanted to know how to enter multi-currency transactions in our accounting software.  It was around 7 pm at in the evening when I got a help inquiry and I was able to provide a response within 16 minutes of receiving the inquiry.  I even got a reply from this new client saying “You guys rock”.  This could not have been possible if I was working during “normal” business hours.  I have even been responding to email inquiries from Japan at 11 pm with much appreciation from the client.

One thing I am beginning to realize is that our clients do not work during normal business hours and neither should we.  If I could speak to the decision makers of large companies, I would suggest they consider allowing their workforce to work from home.  Give each support staff an iPhone / Blackberry so they would be delighted to receive emails at all hours of the day.  Responding quickly and authentically to client support inquiries seemed to be more useful than looking productive during office hours.

That’s all I have to say for now.

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Let me get the record straight, I do not consider myself and expert in marketing.  The good thing about being the owner of my own business, is that I can give myself whatever title I want. 

Now that we have the disclaimer out of the way, here are some of my thoughts and insights about marketing for SaaS applications - both as a result of working on our small business accounting software as well as observing what other people are doing.

Offline Engagement for Online Software?

The world of operating a business online is relatively new.  While it has been around since the 1990’s, it cannot compare to centuries of merchant activity offline.  Some of the questions we were considering when we first started developing Clarity Accounting was: how are we going to market an accounting software?

This was back at the end of 2007 when we sat down to have a discussion with the possible founders.  When we first started, there were 3 of us, one backed out because he couldn’t see a clear marketing model and didn’t see this project to be worthwhile to commit to (this will have to be discussed in a separate blog post about forming the core team of a startup company).  Initially we thought that the best way to market an accounting software was to go after the accountants and bookkeepers.  This seemed like a really good idea.  We thought, each accountant / accounting agency may have up to 100 clients (or more) and if we can enlicit 10 of these agencies to use Clarity Accounting, we can gain 1000 clients!  Marketing was going to be EASY! 

Until…

The grim reality sets in — Accountants Can’t Sell.

I remember meeting Wayne Zielke, owner of Ledgers Online, and having a discussion with him about the possibility of engaging accountants in the sales process when he broke the news to me.  Surely this could not be true.  Look at Intuit! They have the largest network of “Quickbooks Advisers” actively promoting their software, how can this not work?  Recently in a panel discussion, the person in charge of Quickbooks Online said, “There are 25 million users of Quickbooks, 1 million of which are accounting professionals…”, leaving door open to 24 million other users.

Using the traditional offline approach of establishing sales channels hasn’t really worked that well for us as a startup company so far.  Maybe we just haven’t been around long enough to gain the credibility necessary to secure those sales channels.  What I understand about the offline world is that it is about building relationships — leading to a longer sales cycle.  With our price point of $10 / month, it has become clear to us that this method of gaining customers would not be a good use of our time and resources.

I have seen several companies attempting to use offline strategies to distribute online software and I find that these companies simply ended up spending too much time and resources trying to build those offline relationships.  The online world is a place where people go to “skip the middle man” and clients appreciate having a direct connection with the vendors who are providing the products and services.

There is no doubt that there is a market for offline products and services.  When I go to networking events, most people have never heard of the idea of using accounting software that is hosted online.  Almost all the small business owners I have met have not even thought this was possible or available in Canada.  Software as a Service is still a relatively new phenomenon, most users are still considered to be “early adopters”.  Trying to convince them to use online software to deal with their financial matters is like trying to pull off an arm or a leg.  However, I do think there is hope as people are becoming more and more comfortable with banking and purchasing products and services online.

Online Engagement for Online Software

This is the path many software as a service companies have taken in an effort to increase subscribers and users.  Based on the success of some of the companies I have seen so far such as Salesforce and Freshbooks, many businesses are jumping on the online bandwagon.  Social media tools have the astonishing effect of pulling together people with similar interests who otherwise would have been strangers.  People who are actively engaged online are more likely to utilize products and services that are hosted online.  I do find the online world to be increasing saturated, but i don’t think it is nearly as saturated as the offline world.  Someone approached me today about the possibility of doing “print advertising” to promote our online accounting software and I thought to myself, “are they joking?”.  I replied saying, “if you can give me some compelling reasons why I should consider print advertising over spending my marketing budget on internet marketing, I’m all ears!”.

Once upon a time I thought most of these people who are actively engaged online are young people (3 to 25 years of age — that’s what I would consider young), but now I am seeing a much older crowd being interested in online applications — people in their late 30s to mid 40s.  If you feel offended by this statement, please try to understand that I am 28, therefore, people who are older than 35 are “old” and younger than 25 are “young”. 

Long story short, I still think online engagement is where online businesses should focus their attention.  This is especially true for startups on a limited marketing budget.  Offline engagement should be considered when some level of brand recognition and credibility have been established.  Even then, I still think leveraging the power of the internet provides the best bank for the marketing buck.

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Last month, I wrote a blog post about doing the bookkeeping for Habitsoft, Inc (creator of Clarity Accounting) using our own small business accounting software. It has been a scary thought for me since I wasn’t the accounting brain behind Clarity Accounting.  My business partner has been doing all the bookkeeping for our company ever since we first started.  However, I was determined to try because I really believe I am very similar to 80% of business owners who dread bookkeeping.  Doing this will help me gain a better understanding of those we serve.

Our fiscal year started in October 1st, 2008 and I began to do the preparations for being the best bookkeeper the planet has ever seen.  I went to the local office supply store and got myself a huge accordion file with 21 pockets (the usual size is 13 pockets).

I labelled the different pockets of the accordion file with different expense and income categories as well as separate pockets where I keep our bank and credit card statements. I also added an envelope in each pocket for smaller receipts so that everything can be neatly kept.

Then, I felt I couldn’t do ANY bookkeeping until I got myself a Stapleless Stapler. 

If you have never seen one of those, you are missing out!  They come in all shapes and sizes and ideally used to staple credit card receipts and purchase receipts together.  I always wished I can just get one receipt for everything, but the reality in my part of the world is that I often get two receipts when I purchase things with my business credit card or debit / charge card.

The way the stapleless stapler works is that it makes a whole through two pieces of light weight paper and clip it together without ever using a single staple.  I had so much fun with stapling my receipts that my bookkeeping was done in no time at all

I also got a car mileage log book that I keep in my car.  I think that really is the best place to track car mileages because it is easier for one to record how many miles or kilometres driven for business while still sitting in the car.  I don’t think we will ever add a mileage tracking feature on Clarity Accounting for that very same reason.  While it may be nice to do EVERYTHING online, there are certain things that are better done “offline”.  Of course, there might be a possibility of doing a blackberry / iphone integration that will allow one to track mileages “online” from anywhere…

Now the challenge will be keeping up with my bookkeeping on a semi monthly basis.  Bookkeeping is one of those tasks that if one ever falls behind, it is such a headache to get back in the game.  I think this works for most things in life. 

I feel somewhat guilty for not boasting about our small business accounting software as one of my favourite bookkeeping tools.  I figure this should be something that is obvious.  Once upon a time, I tried other forms of self-employment and got Quickbooks to keep track of my income and expenses, I probably set up everything wrong and ended up abandoning it all together within 2 months.  Long enough that I could no longer return it to the store.  That’s why I think a subscription model for accounting software is great, you can cancel at any time.

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Recently I wrote an email to Ben Kepes, one of the editors on Cloud Ave – a blog dedicated to writing about the phenomenon of cloud computing.  He had mentioned on his blog posts he was interested in reviewing a few online accounting software applications and I thought I would just write him an email and see what becomes of it. 

What resulted from our interaction was my first guest post ever.  I wrote a post about what I really think about SaaS (software as a service) and where I think this industry is going.  Before entering into the blog world with my personal blog Manifestation Stories (which has been long neglected since I started working on Clarity Accounting), I never thought of myself as much of a writer.  Less than a year after I started blogging, I am now writing for other blogs. 

Here is a quote on what I think about SaaS:

It is unclear at this point if any SaaS player will ever reach significant market share in their target market. Probably not in the way Intuit (creator of Quickbooks) can capture 90% of the US market share in the small to medium sized accounting software space. Interestingly enough, even Quickbooks Online struggles to get the kind of market share in the SaaS business accounting space, reaching 100,000 users online in 2007. This is nowhere near the numbers they are used to in comparison to their offline distribution.

Consumers are increasingly looking for SaaS solutions that can precisely meet their needs. One great example is Freshbooks - an online invoicing software that began by addressing only the pain of invoicing. They have since attracted more than 500,000 users worldwide. While there have been some grumbles within their online forum for them to add additional features to become an accounting software, it seems like Freshbooks is sticking to their plan of being the best online invoicing software possible for the time being.

It really seems like the most successful SaaS players are the ones who take on one or two pains and address them extremely well. Companies who create SaaS solutions with more features do not seem to win over those who focus on just a few features.

I also offered my crystal ball rendition of the SaaS market:

I have seen this as an increasing trend in the SaaS market place. In fact, our online accounting software has been approached by many of our customers and SaaS vendors to consider “integrating” with other SaaS applications. We couldn’t agree more. It doesn’t serve us or our clients for us to be the “jack of all trades and master of none”. It would be a lot better if we can just focus on what we do best and let others focus on what they do best. At the end of the day, we all win when customers get the best of all worlds.

As I am writing this blog post, Dobes is in the process of finishing and releasing our first working API.  If anyone is interested in testing it out, please let us know!  We already had 2 requests yesterday alone for a working API.

I think only time will tell if my opinion about the SaaS market has any merit. I certainly hope I am right — that way, I can be viewed as an expert. :P 

Where do you think the SaaS market is going?  Any thoughts?

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Less than 12 hours ago, I received an email sent through our contact form from a potential client who wanted to know more about our company.  He wanted to know how long we have been in business and how big our firm is.  He noted that our mailing address looked like a small business running out of some one’s apartment.  He wanted to know if the business he is dealing with is a big, fail-proof company. 

At first I was worried about how best to respond to this inquiry. After all, we are a small company that is run virtually.  Everyone who has ever worked on this project has been contracted virtually.  In the spirit of being an online accounting software, we conduct our business using as many “online tools” as possible.

I wrote back telling only the truth:

• we are a small company
• we operate from home and allow our contractors to operate from home
• when customers write or call, the founders are the ones who answers the emails and the phone – sometimes at very interesting hours (make sure you turn your email notifications off on your blackberry or iphone while you sleep at night)
• when people from Europe and Asia contact us, they get the same quick response as people contacting us from North America
• we don’t have to abide by certain office hours that are restricted to location and timezone
• when there is a quick feature request like adding multiple currencies or fixing software bugs, it is fixed within days (if not immediately).  Some bigger desktop software vendors will require you to wait for a whole year before they release a new version of the software
• we hire the best security and hosting experts with 24/7 security and support to ensure all client data is safe, even while we sleep

I wasn’t sure if it would be ok for me to be so transparent about how we operate.  After all, some of our competitors spend millions of dollars a year running their businesses.  They have offices in multiple locations all over the world.  Recently I found out that a company providing similar services as us burns 6 million dollars a year.  I thought to myself, “wow, give me 6 million dollars and I would only spend a fraction of that amount”.  In fact, within 1 month of our full launch, the business is already paying its own bills. 

Maybe there are many people who have the misconception that small businesses are more likely to fail.  While this is not my belief, I didn’t have any famous people to back me up until this morning when I ran across Seth Godin’s blog where he spoke about how “small is the new big“.  I think Seth is famous enough for me to quote him on this matter:

Small means the founder makes a far greater percentage of the customer interactions. Small means the founder is close to the decisions that matter and can make them, quickly.

Small is the new big because small gives you the flexibility to change the business model when your competition changes theirs.

Small means you can tell the truth on your blog.

Small means that you can answer email from your customers.

Small means that you will outsource the boring, low-impact stuff like manufacturing and shipping and billing and packing to others, while you keep the power because you invent the remarkable and tell stories to people who want to hear them.

A small law firm or accounting firm or ad agency is succeeding because they’re good, not because they’re big. So smart small companies are happy to hire them.

Needless to say, I was relieved.  We are doing something right after all and there is no shame in being small and telling the truth on my blog.  A R&D team of 50 software engineers may not be as effective as one software engineer who created Clarity Accounting within one year.  Talk about real ingenuity and effectiveness…

Seth Godin wrote this blog post in 2005 and I just happen to come across it when he referred to it in his newest blog post “Too small to fail“.  While this post was written 3 years ago, there is really an element of timelessness in his writing. 

Some things will never change…

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It is amazing how hard it is to get back in the game of blogging after an extended absence.  For some people, a 10 day absence might not seem like a big deal.  But I am starting to realize that the longer I don’t write, the harder it is to get back to the groove of writing.  In my defense however, I must say that I have been working very hard on the help files for our online accounting software.  The help file section is created like a whole other blog on our website.  We found this method to be useful in organizing help information as well generating consistent relevant content and SEO credits.

Many interesting things are happening on the Clarity Accounting front.  We are now being contacted by people from all over the world.  Today, we had a phone conversation with people over in Singapore (a place I used to call home for 3 years of my life) and we are getting requests from people all over the world to tweak Clarity Accounting to support their accounting needs.

One of the most important features we have to support international users is our strong multi-currency feature.  From our research so far, I can honestly say that Clarity Accounting has some of the best multi-currency support out there.  We now support currencies in the following countries: United States, Canada, Mexico, Britain, Switzerland, Japan, Dubai, India, Pakistan, Japan and of course, the Euro for countries in the European Union. 

If you would like your currency to be included in Clarity Accounting, simply contact us and make your request known.

To record multi-currency transactions, you would have to use the “Enter Invoice” tab under the Income section or the “Enter Bill” tab under the Expense section. 

Recent requests from our international customers for multi-currency support also made us realize a wonderful vision for Clarity Accounting.  We are the accounting software that can connect small businesses together all around the world by providing a tool that faciliates doing business with each other.  This is a very exciting vision and we are looking forward to serving people from all over the world.

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My business partner and I are constantly being asked this question: “How are you different from Quickbooks?”. 

For a long time I struggled with this question.  After all, we are providing accounting software for small businesses like Quickbooks and many other players.  There are so many different accounting software applications out there and everyone says they are “easy to use”.  Some even say they are the “easiest accounting software ever”.  So, what really makes Clarity Accounting different from everyone else?

And what does this have to do with coffee?

I had an epiphany this morning when I got up uncharacteristically early at 6 am.  Instead of my normal routine of walking to a local coffee shop a block away to get some coffee and muffins, I decided to get in my car and drove a few extra miles to “the best coffee shop in town” called 49th Parallel Coffee Roasters.  Two people in my life has recommended this coffee shop in the last week and I thought I should really check it out. 

In order to park right in front of 49th Parallel, I had to turn around and face the opposite side of the street.  This morning, I decided to use the parking lot of another coffee shop few doors down from 49th Parallel called Kits Coffee.  Kits Coffee has been in the neighbourhood for many years.  I remember going by Kits coffee whenever I got off my classes while I attended university and there were always loads of people inside the shop.  This morning, I didn’t see a single soul in Kits Coffee.  As I was turning around in the Kits Coffee parking lot, I stopped for a young man crossing the street before turning my car and parking right in front of 49th Parallel.  At 6:30 am, 49th Parallel had a line up, including the young man I had stopped my car for a few minutes before arriving at the coffee shop.

Both the young man and I had walked / driven passed Kits Coffee, the coffee shop that has been in the community for years in favour of the new coffee shop 49th Parallel.  What makes 49th Parallel unique is that they roast their own coffee beans in town. Upon entering the store, the rich aroma of freshly roasted coffee fills the well lit environment.  There were only 3 types of pastries available, but they were all freshly baked and immaculately presented.  The latte I ordered was presented with coffee art — the foam part on top of my drink looked like a picture of a leaf.  The prices are the same as all the other coffee shops in town, but this coffee shop had a line up, while others remained empty.  Even the Starbucks nearby did not have a line up at 6:30 am.

This was a very interesting experience for me to watch others, like myself, walking / driving past a well established coffee shop (Kits Coffee) and lining up for a new coffee shop instead.

This experience allowed me to realize what makes Clarity Accounting different from Quickbooks.  Quickbooks is the well established coffee shop that has been in the community for years.  The features and usability of the software has been previously established, all the features are presented in similar formats and data is entered the same way.  It is like the coffee and the wide variety pastries at Kits Coffee that are pre-delivered from a supplier every morning.  Clarity Accounting is like 49th Parallel, the people making the software are also small business owners doing their bookkeeping on their own online accounting software – much like the owner of 49th Parallel, who brew and drink the coffee he roasts every day.  The 3 types of delicious freshly baked pastries offered at 49th Parallel are like the simple feature set Clarity Accounting offers.  Apparently they have the best chocolate croissant in town.  While we do not try to do everything there is to do with accounting (like detailed inventory tracking), we had carefully crafted the usability and functionality of existing features such as financial reporting and income and expense tracking to be the best of our abilities.  One customer called me this morning and couldn’t stop saying “wow” as he was navigating through Clarity Accounting.  This customer happened to have researched many accounting software packages before finding Clarity Accounting.

Here is my lesson from the coffee run I did this morning:

If a company strives to do everything to the best of its abilities and providing superior quality in its products and services, customers will come (and stay).  While it is not necessary for Clarity Accounting to have all the features available like larger software packages, it is important to provide the best usability and functionality for the features we do have.

This left me wondering, “what would I do if I was the owner of Kits Coffee?”

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It is almost impossible to turn on the news today without being bombarded by the reality that the economy is going through the exciting part of the rollercoaster ride — the part where the rollercoaster goes DOWN. Small businesses and self-employed professionals are particularly vulnerable during these tough times because they do not have the financial backbone of larger companies to weather this storm. However, there are several things you can do to as a small business owner to ensure your prosperity during a recession:

• Identify your most profitable clients and service them well.
• Cut costs by keeping track of your expenses by category — so that you can identify any unnecessary expenses and where you are spending the most money.
• Update your financial records frequently and diligently (preferably on a weekly basis); this will help you make important decisions regarding your business quickly and effectively. For example, if you are starting to notice that your expenses are exceeding your income; or if there are outstanding invoices, you will need to act quickly to decrease your expenses and track down the payments on your invoices.

It is a well known fact that many small businesses and self-employed professionals do not have an accounting system to keep track of their income and expenses. While many people have survived in the past by putting their receipts