Xero less expensive than a 10-minute support call to QuickBooks.
Xero CEO Rod Drury responded strongly to claims that Xero’s monthly subscription was too expensive for small businesses.
“We have little pushback on price because we provide so much value, no servers, free support, free bank feeds, free mobile app and we save small businesses a lot of time and money. And we’re now adding payroll at no additional cost,” Drury said.
Yesterday Clive Rabie, group CEO of Reckon, the Australian distributor for QuickBooks, said Xero was overpriced for the small business market and would be forced to drop its price when new competitors arrived later this year.
“Today if you run Xero with two databases you’re paying $1,200 a year. And that (Xero’s high price) is what’s going to be dealt with in the market,” Rabie said.
Drury pointed out that businesses received a 25 percent discount on extra licences and that a cheaper, less featured licence was available for $348 a year. Even so, Xero was much more affordable than desktop accounting software, he added.
“We have free email support and call back if required. Our $49 is all in,” Drury said. “We are cheaper than (QuickBooks) Pro and Premier annual support let alone their upfront cost so he is completely wrong.”
The $49 per month charged by Xero for its medium licence was cheaper than a 10-minute call to QuickBooks’ support phone number, which is charged at $4.90 per minute, Drury pointed out.
“We spend millions of dollars on hosting environment so we can be secure and reliable. We invested in a huge team which is providing our customers with rapid innovation. So we believe we are providing ongoing value but others are welcome charge what ever they like,” Drury said.