FreeAgent Central takes the crunch pulse: startling results

FreeAgent Central has published the results of a survey it conducted among users and others to assess the impact of the credit crunch in its target customer group. They achieved 535 responses, a healthy number and one that should lend statistical credibility to the findings.  FreeAgent concludes:

They conclude:

It’s of course inadvisable to draw any direct causal relationships between the results above, but we can certainly say that the results suggest you are likely to feel less affected by the credit crunch, and be more optimistic, if you:

• Work in Graphic Design and Multimedia, or to a lesser degree in Web Development and Design.
• Structure yourself as a small business rather than a solo-worker.
• Have set up fairly recently.
• Use online software to manage your accounts.

The flip side is that those in journalism, programming or consultancy are less optimistic (see graphic above.) As always, the devil is in the detail and there is much to consider. For instance, consider the next graphic:

Although around two thirds of respondents report no change in business volume, 38% believe that income will be down from last year. That suggests to me that those who are prepared to be flexible will be fine but they have to accept that income will suffer. the next graphic provides some of the more interesting insights from the technology vendor sell side.

Despite enthusiasm for all things saas/on-demand, 87% of this group have no plans to make changes to the way they manage their financial affairs. However, of those who are looking 64% do their own research and only 9% take the advice of friends while 8% would consult their accountant. This tells me several things.

At this stage, peer recommendations are not the big draw that social marketing pundits would have you believe. At least not for this class of application. I often see social marketing offerd as a panacea to past failed methods in a broad and undifferentiated way. These results suggest marketers will have to think again. In addition, I’d like to see more of this style of analysis to assess which business segments are more or less likely to benefit from the social marketing approach.

Sage, which has a significant number of accountants under its Accountants’ Club wing should be very worried. If this group is representative of buying trends then it seems untrue that accountants are prime influencers. There is a slight problem with this analysis because it is not clear whether the large majority that researched themselves also took other advice. However, aligning a solution to a firm may provide extra kudos to vendors.

This result also tells me that vendors need to make sure their online efforts are the best they can be and clearly differentiated from the get go. You’re only going to get one shot at getting it right and first impressions count. Get it wrong and even though your solution may be excellent in every way, you’ll lose out to better, smarter presentation. One good example I’ve seen is 30 Megs, which draws up on a combination of humour, a clear statement of issues and resolution plus a very well defined and explained value proposition. In speaking with the site owner, fellow Irregular Sig Rinde, I’m aware that his solution is getting close attention at some very large companies.

Looking sideways, I’d say the same goes for professional accounting online presence. Over the last few years, I’ve looked at hundreds of professional sites. Many are wholly predictable, telling the world how gorgeous THEY are and providing little more than cookie cutter information you could otherwise find with a simple Google search. Few firms get it even barely right and only a tiny fraction hit the mark in terms of getting potential clients to click through from the home page to find out more.

There is much to digest, interpret and think about. I’d recommend that anyone with an interest into the impact of technology on business and who are looking for saas trend data consider this report as an interesting addition to the published research.

Tagged as: credit crunch, FreeAgent