But once you are into the Standard and Premium plans, payroll becomes the main differentiating feature of choice. The Starter plan doesn't run payroll, so people looking for just invoices and basic features have a plan for them. Here, payroll is in the top right of the top right, showing that it is ideal for a differentiating feature. This could be a problem for QBO, as our data shows that payroll is a highly valued, high WTP feature: In fact, once you throw payroll into the mix, all QBO plans are outside of the willingness to pay. “For someone using Xero, that design aspect, that user experience, that focus on beautiful accounting, at least in what we are seeing in this data, is actually paying off quite swimmingly.”įor their Plus plan, QBO is actually outside of the range for willingness to pay. The design of the pricing page is more intuitive, more modern, attracting customers that have a higher willingness to pay. Why are people more willing to pay for Xero? For the same reason they will pay more for Squarespace than Wix. Which is weird because our data from 16,434 current, former, or prospective Xero and QBO customers shows that Xero has the higher willingness to pay: So the final price on QBO for a similar plan is $119/month. If we switch off the 50% off on QBO, we can see that the Plus plan there is $99/month even before we've added the extra $2/employee/month: The Premium 10 plan at Xero, giving users the accounting features push running payroll for 10 employees is $70/month. They even shout this out at the bottom of the pricing page, saying “Xero is a great fit for most small businesses.” This plays to their target market-the smaller end of the SMB spectrum. It does the math for you when deciding your payroll needs. You also have to do plenty of math to figure out the right price for you, especially when choosing the “50% off for 3 months” option in lieu of a free trial. Long feature lists and plenty of information for any accounting professional to make the right choice of plan. It is designed for the higher end of the market. You can see this in practice when you look at the pricing pages of QBO and Xero. It is an important part of your pricing strategy.īut you also have to differentiate yourself from your competitors.

You have to differentiate your packages internally so that your prospective customers can choose the right plan and pricing for them.

Differentiation is two-fold for SaaS companies.

Xero accounting software vs quickbooks