25 May 2012 Jay Shepherd

How to Intuitively alienate your customers

Imagine that you bought a new car. It drives OK. It’s not the sleekest or best-looking thing on the road, but it gets the job done, more or less. It gets you to your destination, if not particularly in style.

Now imagine that three years later, you get a recall notice from the auto maker. The form letter explains that it is discontinuing support for your model year, unless you pay for an upgrade that costs nearly as much as you originally paid (87 percent, in fact). Turns out, if you don’t upgrade, your car’s fuel pump will cease functioning altogether. You can go to the gas station and get your fuel, but the car will not be able to process it. Don’t complain to the gas station, though, because they’ll just tell you that you have to pay for the upgrade from the auto maker.

Here’s the company’s recall notice explaining why this must be:

We are committed to developing easy, straightforward cars that help you today and grow with you tomorrow. But it’s a balancing act – making our automobiles better and easier to use while still supporting older versions. So we offer support for the current version of our automobiles and the two previous versions.

Now here’s the kicker: except for enabling your fuel pump to continue working, the so-called upgrade improves nothing about the car that you care about. All it does is provide you with some tacky decals to put on your rear window and bumper, a new vinyl document case for your glove box, and a new floor mat for your passenger-side footwell. Except for the fuel pump being held hostage, you would never pay for this upgrade.

You wouldn’t tolerate this from a car company, or any other kind of company for that matter. But this exactly what Intuit, the makers of QuickBooks and Quicken accounting software, is doing to its customers.

Three years ago, I bought QuickBooks for Mac 2009 for my law firm. I’ve never liked Intuit, because it has always treated Mac customers like something that got stuck on the bottom of its shoe. The software interface has always been garbage, eschewing most Mac human-interface guidelines.

Now I get word that Intuit is discontinuing support for my version of Quickbooks. OK. I get that. All kinds of companies stop supporting outdated versions of their products. But there’s a huge difference between “discontinuing support” and actively crippling a product. According to the text of Intuit’s discontinuation notice, customers will no longer be able to use online banking:

You will see an error message when you try to download transactions, send online payments, or send online transfers. The error message you see depends on your download method. For example, you may see the message “QuickBooks is unable to verify the Financial Institution Information for this Download.” There is no need to contact your Financial Institution, as they will refer you back to Intuit to upgrade your QuickBooks.

(Now you can see where the post title comes from.) In other words, the software that I paid $220 for a few years ago will suddenly stop working in one vital respect unless I pay a ransom of $183 to “upgrade.” And I use the scare quotes because the so-called upgrade contains no improvements that a user like me would find useful.

I understand the desire to increase revenue from your products, and also the benefits of increasing your share of wallet from existing customers. But don’t sell me something and then make it stop working after a certain period of time. If you want to do that, sell me a subscription-based product (like QuickBooks competitor Xero). That way, I make my purchase decision based on the knowledge that it will work for a certain amount of time before I have to pay again.

Surprising your customers with sudden obsolescence is a great way to alienate them, and send them to your competitors. No takesies-backsies, Intuit!

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Comments (10)

  1. You sir have nailed it!

    As someone that has hated Quickbooks with a passion (having to deal with it for my IT business and rescuing my clients when it screws them over), they further distanced their lead as the most evil, money-grubbing, purveyor of buggiest pos crapware on the planet with this tactic.

    I thought I would be free from the forced obsolescence as I never use Quickbooks to go online and download bank statements, but I was surprised (shouldn’t have been) when today I received a “quickbooks is unable to verify the financial institution information for this download” when I tried to open the .qbo file I manually downloaded from AmEx.

    Seriously, the mob could take lessons in extortion from Intuit…

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  2. Alana Bryant, CPA

    Get used to this. Most accounting software works this way. One way or another you have to pay for updates. It normally includes updates for payroll tax tables, browser updates, operating system updates, etc.

    I’ve seen instances where Google, Firefox, or Safari have done browser updates that have caused problems with online banking access. Whose fault is that?

    During the last 5 or 6 years, the government has done a lot of tax law changes (always at the 11th hour). As a result, companies have to scramble to comply.

    Ever wonder why your tax preparer cannot electronically file before mid-January? Wonder why the IRS is giving you that extra day to file? It’s not because they want to.

    A new law was passed to require that Form 1099-K be issued to anyone that accepts and receives credit card payments. I got my first one last year. If you pay a vendor with a credit card, you have to remember to exclude it from your 1099-MISC because the credit card company will be sending them a 1099-K. Do you have any idea what an accounting hassle this is?

    When Microsoft or Apple introduces new operating systems, eventually they stop supporting older versions. At some point, the user will need to upgrade or gradually begin to see a loss in functionality. Can you say Windows 95?

    Should a software be required to do an unlimited number of “retrofits” for those who are not interested in upgrading indefinitely? If you owned the software company, what kind of budget would you have for this?

    A new version of QuickBooks Pro 2012 runs about $140 on Amazon. To me, it’s dirt cheap considering that you only have to buy it every three years.

    Wave Accounting is FREE, but your name is being sold. Peachtree is a good option. There are many others that I could name.

    With the onset of technology, there are a lot of other options. At least you can choose to go elsewhere.

    I’m just being devil’s advocate.

    • Jay Shepherd

      Thanks for your comment, Alana. But I’m going to have to disagree.

      Yes, charging customers for updates is completely appropriate. If Intuit comes out with new, useful features (for a change) or a better (read: remotely good) user interface and I want to take advantage of that, it’s fair that I have to pay for that privilege. Even if it’s just updating tax forms — fine. But what Intuit did here is to retroactively go back and break the application that I bought and paid for unless I gave in to their ransom demand to buy an update that I neither wanted nor needed. That isn’t remotely the same thing as charging me for an update. I paid for something that Intuit said would work. And it did — barely — until they metaphorically snuck into my house and sabotaged it.

      So no — I’m not going to “get used to this.” Instead, Intuit will have to get used to losing customers. Which it did.

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  3. Glen

    I totally agree with you Jay! I also hate Quickbooks for stuff like this. It’s dirty, greedy, and pisses me off.

  4. HB

    This is not even remotely connected with any “service” – I download a file and my local desktop copy of the software imports the QBO file into my accounts. Except now before it does so, my desktop software is told NOT TO DO SO AND DISPLAY A VAGUE ERROR MESSAGE. There is NO NEED FOR QUICKBOOKS TO VERIFY ANYTHING. I downloaded the file myself for use with my accounts. THERE IS NO NEED FOR ANY “VERIFICATION” unless I ask for it to do so. A check-box (Would yo like to verify this file ?) is all that would be needed. If someone wants to verify it – they can pay Quickbooks an upgrade fee and so be it. I DO NOT NEED THIS VERIFICATION STEP – PLEASE DISABLE THIS STEP.

    I feel this is gross misconduct on the part of a major corporation bordering on extortion and lying.

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