FreshBooks in this year’s PICK 20 top spot   |  July 27, 2009  

It takes a community to win first place

Tweets, dinners and live phone support landed FreshBooks in this year’s PICK 20 top spot 

If your phone rings and the call display reads “Michael McDerment,” you should answer. He may be offering to buy you dinner.

McDerment is CEO of FreshBooks, a Toronto-based online invoicing and time-tracking company that launched publicly in 2004 and now boasts more than 900,000 users and double-digit month-over-month growth since opening.

That success, McDerment said, comes from customer service. “We are in the experience business. Every time someone uses our application, that’s an experience. Every time someone needs help and they phone us and get a real, live person, that’s an experience. And every time we reach someone through social media, that’s an experience.”

Social media is critical to the company, but let’s cover dinner first. When McDerment travels, he calls customers and invites them to dinner. Last year, for example, company execs were attending the Future of Web Apps show in Miami and the South by Southwest Interactive Festival in Austin. About 2,200 kilometres separate the cities, but instead of flying the company rented an RV and drove from Florida to Texas, making 10 stops and inviting 10 customers to dinner each time. While there’s hardly a less Web-2.0 approach than phone calls and food, the story is important because McDerment believes the online efforts are only successful as an outgrowth of an overall customer-friendly philosophy.

…and social networking
In our article on Twitter, Thornley Fallis’ Dave Fleet advises companies not to “ditch old tools that do their particular job better” in favour of social media. McDerment would agree. “Someone Twittering you or someone phoning you is the same, it’s just that one is new and one is not. And smart companies are going to begin to learn that” and adopt blended approaches.

But within that blend he is passionate about online tools.

On blogging: McDerment learned to ignore “you must post daily” advocates. “If you don’t have something to write, don’t write anything. Our readership grows faster when we only write when we need to. Our traffic is great, and people read our blog who are not even our customers.”

On Twitter: “Twitter is fantastic. The (time) investment you need to make is so small, and it encourages direct feedback from people. With the blog, I still don’t know why some posts generate feedback and others don’t. But with Twitter you get people chatting back with you. And you get that with less than a minute of effort (to write a tweet).”

Measuring results
One downside is that “it’s tough to calculate the ROI” from Web 2.0 tools, so McDerment relies on Net Promoter, a system designed to objectively assess customer satisfaction. According to Net Promoter, the average score in the financial services field is 15 per cent, while in the consumer software segment, Adobe scored the highest with 46 per cent.

FreshBooks, according to its CEO, scored 69.9 per cent, a number generated in part by its use of Web 2.0 tools. “The currency of our business is relationships. If you don’t believe in customer service, if you want to automate everything and not respond to individuals, then these tools are probably not for you. But if you are genuinely interested in developing relationships, then there can be real value” in Web 2.0 technologies.

Backbone congratulates FreshBooks on scoring the win in this year’s PICK 20. 
 

Peter Wolchak
Editor
pwolchak@backbonemag.com