August 15, 2008
Disruption needs trust. SaaS vendors who are attempting to disrupt a traditional incumbent need to do everything to build the credibility that creates trust from customers.
The other day I visited SaaS vendor iPayroll and was pleasantly surprised when I looked up at the entrance to their building. iPayroll decided that their market (payroll services for small/medium businesses) needed to really trust them for their most sensitive of data. iPayroll decided that securing naming rights to a building would give them a level of credibility that would build trust with their customers. It’s a reasonable enough thought and it would seem to work for iPayroll and the market they’re in.
Just up the road in a lovely, but unmarked, building lives the global headquarters of Xero. Xero also deals with SMEs and handles their sensitive financial records. Xero too realised that trust was critical but their approach to gaining this level of trust was to go through an IPO and gain the credibility of being in the public eye. Xero banked on this credibility building trust for their brand. It to is a reasonable enough contention (not to mention other good reasons for IPOing) and it seems to have worked well for Xero thus far.
My point? There’s many ways of doing it, and really it doesn’t matter how you do it, but SaaS businesses have no option but to built a credible story and leverage that credibility to create trust for their customers (and potential customers).