Home / BAS Agent's Blog / IMHO – Xero’s business model stinks! (but their software is cool)

IMHO – Xero’s business model stinks! (but their software is cool)

I recently read an article about blogging which claimed that the best blogs are written by people who write about their own opinions. Apparently those blogs are more interesting to readers than blogs about facts and how-to’s etc. So I thought I’d try this theory out and start off this blogging phenomenon (which I’m calling IMHO –how original!) by telling everyone about my opinion of Xero’s business model. Here goes………

Firstly, let me say that this blog is in no way meant to be an attack on the Xero platform. I really like the platform itself and think that as far as accounting software goes, it is a fantastic tool providing many benefits to business owners. I think it has room for improvement but then, so do most other accounting platforms so it’s not alone there. Basically, what I’m saying is, I am a fan of the software itself however, when it comes to the company, well that’s another story……..

The Xero Company business model makes me cringe. The most important thing to Xero is to sell subscriptions and sell them by the truck-load. It is so important to them in fact that they have created an army of sales persons in the guise of accounting professionals to do the selling for them. The “soldiers” are drawn into this sales web by way of the Xero Partner Program, a cleverly constructed ruse that has them starting at the bottom and as they sell more and more subscriptions, sees them climbing their way up the Xero ladder of fame. They are motivated to sell subscriptions by the promise of commissions on sales, free software, free resources and even financial assistance to make attending Xero events more affordable. In fact, the more the soldiers sell, the larger the list of freebies grows. Actually, now that I think about it, these soldiers are more like puppets with Xero being a very clever puppeteer!

I find this disturbing to say the least. Again I say it makes me cringe. Why does this situation get under my skin so much?

This is why:

Xero have intentionally created a hard-sell culture which affects their personnel and partners’ behaviour at every level. Their business model is all about SELL, SELL, SELL so you (the partner) can get MORE, MORE, MORE! Yuck! I hate that model and I don’t want to be a part of it. I’m not into becoming a partner with an entity just so I can selfishly gain from it and I don’t understand those who do. Xero’s sales-push model has unfortunately created an army of self-serving accounting professionals who have made their clients’ needs secondary. This is both sad and disgusting. Suddenly it’s all about what they can get rather than what they can give. For me, my clients’ needs will always come first. If I partner with a software company it will be because I believe in the software and its potential and that by being a partner I can best assist those clients who have chosen to use that software. That’s the only reason. I certainly won’t become a partner so I can better my own personal situation (and get free stuff). That’s just plain wrong and unethical in my book. Things need to change Xero and quickly before it’s too late – I’m losing faith!

Change, it seems, may be coming! I am pleased to read in the post by Sholto Macpherson that this August Xero are looking to change the partner program to one that “would reduce the emphasis on the number of registered clients and focus on on-going training and certification, attendance at Xero events and other factors”. I really hope this is true. I believe all partner programs should be based on partners’ knowledge of, and years of experience with, the software itself and nothing else. By basing its partner program on sales targets alone, Xero has unwittingly encouraged the unethical behaviour of some unruly partners (reports are floating around of partners poaching subscriptions from each other and even locking clients out of their own files). Some partners are so brain-washed in regards to the sales target thing that they are prepared to go over each others’ heads in order to snap up subscriptions. What the? Yeah that’s really professional guys – not!

Xero’s current sales-crazy mentality really urks me – actually it really pisses me off to put it bluntly. Hearing stories of professionals behaving badly just cements for me that my opinion is justified.

I am glad Xero is looking to review their partner program. I hope they follow through.

Who knows, a new partner program may even make me like them again 😉