Xero - price increases?! 10% for NZ customers

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22 posts

Geek

#1397750 1-Oct-2015 08:02

It's pretty normal for reporters to get things wrong - accidentally or deliberately - and the NBR does this quite often when reporting about Xero, so I'd take that with a grain / bucket of salt and talk to Rod directly if you want a real quote.

If you want to see what Xero has delivered lately, checkout the feature releases on this blog post. How many other online business platforms can deliver this much new functionality at this rate? Think of it this way. 8 years ago you bought a brand new Toyota Corolla. This morning when you drove to work, you noticed that it's actually changed into a Lexus RC 350 Coupe. Would it be worth paying a little more for that?

Can anyone say how many times their electricity has increased in price in the last 8 years? What new features have you got from your supplier in the same time period? Did you object to each and every price increase?

As for making a profit, Xero will succeed by capturing as much of the market as quickly as it possibly can. It's a race between a young upstart and old incumbents with very deep pockets. Yes, users may 'feel' locked in but there are plenty of other products available, desktop or SAAS and many of them offer free and easy migration from Xero. Xero will only retain customers by innovating and sprinting.

timmmay

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#1397753 1-Oct-2015 08:07

Jonesie: It's pretty normal for reporters to get things wrong - accidentally or deliberately - and the NBR does this quite often when reporting about Xero, so I'd take that with a grain / bucket of salt and talk to Rod directly if you want a real quote.

If you want to see what Xero has delivered lately, checkout the feature releases on this blog post. How many other online business platforms can deliver this much new functionality at this rate? Think of it this way. 8 years ago you bought a brand new Toyota Corolla. This morning when you drove to work, you noticed that it's actually changed into a Lexus RC 350 Coupe. Would it be worth paying a little more for that?

Can anyone say how many times their electricity has increased in price in the last 8 years? What new features have you got from your supplier in the same time period? Did you object to each and every price increase?

As for making a profit, Xero will succeed by capturing as much of the market as quickly as it possibly can. It's a race between a young upstart and old incumbents with very deep pockets. Yes, users may 'feel' locked in but there are plenty of other products available, desktop or SAAS and many of them offer free and easy migration from Xero. Xero will only retain customers by innovating and sprinting.

The thing is this was always planned, and a reason to go with a SAAS offering - regular bug fixes and feature improvements. Xero was already more expensive than buying an accounting package, over time.

Dulouz

883 posts

Ultimate Geek

#1397757 1-Oct-2015 08:17

As a loyal Xero customer for 8 years I find it annoying that US customers have access to a cheaper Xero with more functionality. As Xero is a NZ company I would hope that they would treat their NZ customers at least the same as customers from other countries. Many NZ businesses have supported Xero for the fact that they are a NZ company. Then to see Xero treat customers from other geographic regions better, really is a slap in the face.

Amanon

ockel

2031 posts

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#1397761 1-Oct-2015 08:25

Dulouz: As a loyal Xero customer for 8 years I find it annoying that US customers have access to a cheaper Xero with more functionality. As Xero is a NZ company I would hope that they would treat their NZ customers at least the same as customers from other countries. Many NZ businesses have supported Xero for the fact that they are a NZ company. Then to see Xero treat customers from other geographic regions better, really is a slap in the face.

Exactly. Its no better than finding you can buy an AllBlacks jersey for half the price overseas, or that a local company charges significantly more for something that is virtually identical overseas but users have little alternatives but to wear the higher price (and subsequent price increases).

Sixth Labour Government - "Vision without Execution is just Hallucination"

ockel

2031 posts

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#1397762 1-Oct-2015 08:31

Jonesie: It's pretty normal for reporters to get things wrong - accidentally or deliberately - and the NBR does this quite often when reporting about Xero, so I'd take that with a grain / bucket of salt and talk to Rod directly if you want a real quote.

If you want to see what Xero has delivered lately, checkout the feature releases on this blog post. How many other online business platforms can deliver this much new functionality at this rate? Think of it this way. 8 years ago you bought a brand new Toyota Corolla. This morning when you drove to work, you noticed that it's actually changed into a Lexus RC 350 Coupe. Would it be worth paying a little more for that?

Can anyone say how many times their electricity has increased in price in the last 8 years? What new features have you got from your supplier in the same time period? Did you object to each and every price increase?

As for making a profit, Xero will succeed by capturing as much of the market as quickly as it possibly can. It's a race between a young upstart and old incumbents with very deep pockets. Yes, users may 'feel' locked in but there are plenty of other products available, desktop or SAAS and many of them offer free and easy migration from Xero. Xero will only retain customers by innovating and sprinting.

If I want to move up from my 8 year old Corolla to a Lexus I'm going to go out and test drive and decide that I want to pay extra for a higher spec'd model. I dont expect Toyota to turn up and say we've given you a new car and you need to pay significantly more for it.

I've resolved to ditch Xero before 1 December and go back to a desktop solution. My accountant can deal with a flat file like they used to - and in 10 years time when I find the functionality of my software is no longer suitable I'll re-evaluate packages again.
Switching to Xero was a mistake I regret already.

Sixth Labour Government - "Vision without Execution is just Hallucination"

Jonesie

22 posts

Geek

#1397764 1-Oct-2015 08:42

10 years? Do you really expect any software to stay relevant for 10 years without some changes?

Jonesie

22 posts

Geek

#1397766 1-Oct-2015 08:48

I would assume the US price is heavily discounted to capture the market. Different markets have different marketing strategies applied. The USA is DEFINITELY different! Some people might say it's retarded - ie they still use paper cheques, have thousands of different tax authorities - it's really 50 countries not 1. My point is, it's not a fair comparison.

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graemeh

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#1397772 1-Oct-2015 09:06

Jonesie: 10 years? Do you really expect any software to stay relevant for 10 years without some changes?

That is not unreasonable for something like basic accounting.

My desktop version of MYOB was relevant for 10 years. The only that broke was the GST report due to the way they coded it not coping with a change in GST rate. There was an easy workaround though.

ajobbins

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#1397917 1-Oct-2015 12:43

Jonesie: It's pretty normal for reporters to get things wrong - accidentally or deliberately - and the NBR does this quite often when reporting about Xero, so I'd take that with a grain / bucket of salt and talk to Rod directly if you want a real quote.

I get the impression from the wording in your post you may have an affiliation with Xero?

Twitter: ajobbins

wsnz

649 posts

Ultimate Geek

#1397998 1-Oct-2015 13:55

bigreddog:

And who pays for the Accounting firms to train and upskill their staff in Xero? Would you rather that clients were charged for that time directly?

It could be argued that their margins already include those costs.

wsnz

649 posts

Ultimate Geek

#1398007 1-Oct-2015 14:00

Jonesie: I would assume the US price is heavily discounted to capture the market. Different markets have different marketing strategies applied. The USA is DEFINITELY different! Some people might say it's retarded - ie they still use paper cheques, have thousands of different tax authorities - it's really 50 countries not 1. My point is, it's not a fair comparison.

Exactly. There are even differences between counties in the US, let alone tax deduction rates. etc. which all impact on pricing. It's a very complicated country.

mattwnz

20141 posts

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#1398011 1-Oct-2015 14:02

timmmay:
The thing is this was always planned, and a reason to go with a SAAS offering - regular bug fixes and feature improvements. Xero was already more expensive than buying an accounting package, over time.

That is the reason I am still using MYOB, think it was about 1k about 10 years ago, but it has worked out at about $100 a year which is quite good over the long term. But if I was a big business user, who needed ongoing support and the most upto date features from the supplier, I can see the advantage in a SaaS offering, and something under $100 per month most medium businesses is cheap IMO.

mattwnz

20141 posts

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#1398014 1-Oct-2015 14:04

wsnz:
Jonesie: I would assume the US price is heavily discounted to capture the market. Different markets have different marketing strategies applied. The USA is DEFINITELY different! Some people might say it's retarded - ie they still use paper cheques, have thousands of different tax authorities - it's really 50 countries not 1. My point is, it's not a fair comparison.

Exactly. There are even differences between counties in the US, let alone tax deduction rates. etc. which all impact on pricing. It's a very complicated country.

Also you get a lot of people in the US wanting to support homegrown systems, so they are very patriotic to the US. Unlike in NZ, where we tend to make our decisions based on price no matter where it comes from.

Jonesie

22 posts

Geek

#1398030 1-Oct-2015 14:15

ajobbins:
Jonesie: It's pretty normal for reporters to get things wrong - accidentally or deliberately - and the NBR does this quite often when reporting about Xero, so I'd take that with a grain / bucket of salt and talk to Rod directly if you want a real quote.

I get the impression from the wording in your post you may have an affiliation with Xero?

At the risk of getting in trouble at work, yes, I do work for Xero. But I assure you, I'm not in the slightest bit prejudiced

I'm using personal opinions and logic to counter some of the strange arguments I see. At least you guys dont get rediculous with conspiracy theories.

Disruptive

3 posts

Wannabe Geek

#1398093 1-Oct-2015 15:40

wsnz:
bigreddog:

And who pays for the Accounting firms to train and upskill their staff in Xero? Would you rather that clients were charged for that time directly?

It could be argued that their margins already include those costs.

There is no argument, they mostly work off margins of between 70 and 85%.They partly justify those margins on training (and rightly so to a degree) but mostly on office and IT overheads. But Xero provides everything for free!
A highly experienced (8 years +) Senior Accountant average salary rate per hour is $40 an hour which on average is charged out at $200 an hour

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