Formed in 2005 by a couple of childhood friends who trained in accounting, Mazuma (a Yiddish word for ‘money’) is one of a new breed of ‘accounting factories’ that is taking the commoditization of compliance services to an entirely new level.
Earlier today I spoke with co-founder Lucy Cohen, the marketing brains behind Mazuma who said: “I love the commodification of accounting services. It’s like the insurance industry was a few years ago. Who would have thought that comparison websites would replace the traditional insurance salesperson? We have to keep one step ahead in finding new ways to address the market so the more we can commoditize the better it is for our business.”
Mazuma is both a franchise and hub with most of the growth coming at the Bridgend based hub. The firm is adding between 60-100 clients per month who all use its ‘Purpleforce’ service. “We know there is a very large market in the startup and small business world that only wants a bare bones service but wants it easy and cheap. We set out to remove as many of the barriers to getting clients to provide their records. We provide our clients with a distinctive purple envelope into which they simply put all their documents and send to us on a month to month basis. We send back a pack of information that includes their accounts together with all the information they need to keep them compliant. When the Post Office introduced weight and size pricing we went Freepost.”
One problem with a factory style of operation is the potential for the service to become impersonal. “We don’t have that problem. Our clients want to get things done, be in and out as fast as possible. Having a team of people that are monitored for accuracy means that you never know what you’ll be working on from one day to the next. But it does mean there will always be someone who has an understanding of your affairs.”
Unusually for a modern practice, Mazuma doesn’t make any real use of SaaS/cloud solutions. It’s not even experimenting with Skype – yet. Instead it uses VT Software: “We’ve got a portal for client login if they want it but most don’t. We don’t need a saas solution preferring instead to use something that is lightening fast and very easy to use and which gets us to final accounts – that’s our product. We’re bringing in envelopes that are barcoded and then allocated to staff working out of the factory.” For tax, the firm uses Digita. I have to question whether this is viable in the long term. I can easily envisage a situation where remote workers will require over the internet access. However, the factory model can work well provided all the infrastructure parts are in place at minimal cost.
On the marketing front, Lucy is way more advanced than I’ve seen any other firm. In a separate podcast (coming soon) we talk about the firm’s use of social media. This has been a talking point for some time but Lucy is unequivocal: “When the budget came on, it raised topics we could discuss with clients in less than 140 characters. We can use it to test ideas and what we find is that people will be blunt and to the point. If something doesn’t work then fine we can move on to the next idea. One of the things we do for instance is use Twitter to drop discount codes into the conversation. It’s a fantastic way to make connections.”
I pressed Lucy on what might be seen as a disconnect between social media and on-prem production methods: “Many of our clients love iPhone, iPad and that sort of thing. But to them these are fun devices they don’t necessarily associate with their work. We respect that.” Hmm…maybe now but in the future I can see a need for SMS and other alerts.
But if Twitter was the sum total of Mazuma’s model then it would be a one dimensional strategy. The firm uses SEO, pay per click and direct mail marketing. “It sounds so retro but we are get a 10% sign up rate on direct mail.” Overall, the firm spends 15% of revenue on marketing, a number Lucy would like to see rise: “We’re constantly reinvesting and marketing is a big part of that. There’s plenty we can do at low or no cost but then there comes a point where you’ve got to put money into campaigns and the like.” How many small firms do you know that put remotely these kinds of sum into marketing?
During our one hour conversation I could not help but be infected by Lucy’s enthusiasm. She and her team want to change the world. They’ve developed a business model which I understand but which is going so far against the grain of what professionals are used to I wonder how many others can follow. Maybe that’s a good thing. Her plan is simple: an exit in 3-5 years. A classic entrepreneurial approach to professional services that is almost entirely absent in the landscape. But is this too brash? Is this too much of a risk at the clients’ expense? “Not at all, we invite HMRC in to see what we’re doing and talk to us about any significant changes that might impact the way we do things. It’s not a problem.”
It was a real pleasure speaking with Lucy. Provided it keeps relentlessly focused on customer service then Mazuma will be a 21st century success. but it was her closing comment that brought a smile: “Everyday we’re having fun. What’s the point of doing something if it isn’t fun?”
Do you know any other firms that are as progressive? Want to share?
