Cloud accounting company Xero has angered loyal customers with the decision to discontinue its personal accounting app, Xero Personal. Xero Personal would continue to operate until November 2014, the company said in a blog post.
“Extremely disappointing. The blend of business and personal Xero on an integrated platform was very useful and now what? I am very concerned that the users were not consulted at all,” wrote one commenter called “Glen”.
The app would be terminated because it was not financially viable and the company wanted to focus on accounting software for businesses, accountants and bookkeepers, Xero CEO Rod Drury said on the blog.
“Unfortunately, only a small number of people are prepared to pay for an independent personal financial management tool,” Drury said.
Xero increased the operational cost of Xero Personal after it added bank feeds, a popular feature among its business users. However, Xero could not convince users to pay the cost of maintaining the feeds, Drury said.
“Ironically, as we added automated feeds, banks and our aggregation service want to charge us. It’s also a big investment to implement those feeds. The already low to no margin business is simply killed,” Drury said in a comment on the blog. “So PFM really is an impossible category.”
Several commenters on the blog announcing the closure were supportive of the decision but not everyone was pleased.
“As a personal and business user I’m pretty fed up about this. The functionality was still good enough IMHO to make Xero personal worth the time and effort,” wrote a commenter called “Amanda”. “And it’s the time I spent setting it up, learning it, sorting my goals, budgets etc that’s really hacked me off.”
Drury rejected claims that Xero Personal had not been marketed sufficiently to attract more customers.
“We marketed XP direct and targeted. The response rate was very low and we learnt that without having go and do a big splash,” Drury wrote in the blog comments.
Xero added a mobile app and bank feeds because it considered them key aspects of online accounting software. However, Xero Personal may not recover the cost of establishing the bank feeds, Drury added.
“Regardless of how many users there is little margin in the service – if any. The commercial reality is that Personal Financial Management is an an unattractive business,” Drury said.
Xero Personal Users would receive extended subscriptions to November 2014 at no additional charge, the blog said. Xero would send more details on the wind-down plan and information on how to remove data from Xero Personal before it shut down.