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Intuit Moving to Usage-based Pricing

Neil Williams, IntuitIntuit will increasingly shift its software pricing towards a usage-based model. That approach will show up across the board in the company's payments, payroll and accounting products, according to Neil Williams, Intuit's CFO. The shift is in line with trends brought about by web-based software products.

Williams made the comments this week during a presentation at the 31st Nasdaq Investor Program in London. In a webcast, Williams noted users like this kind of pricing and it is appropriate for pricing based on volume for payments processing, number of employees for payroll. That switch will also be made with QuickBooks Online.

Users will experience "actually having the pricing of their QuickBooks more driven by how many users they have, how many accounts they have set up and things like that." Williams said. "That's a trend you are going to see going forward."

Even though in the October quarter the number of QuickBooks Online subscribers exceeded Intuit's forecast, those are largely new customers for Intuit, not desktop users migrating. Williams admitted, "The desktop migration has been a little slower than we expected at this point." This fall, Intuit increased the price of the desktop version, aimed at steering more users to the web-based product.

Intuit has helped the move by adding features to the online product, making it simpler to use to convert files, he said. But Williams said there is not much left Intuit can do in this area. Instead, the company is putting its bet on the accountant community. "We are making our QB Online application strong and rich and getting accountants familiar with using QuickBooks Online and getting them to convince and persuade their clients to convert."

Williams predicts accountants will be a "big catalyst" to adoption of QuickBooks Online by desktop users.

Williams also briefly addressed the possible impact of TurboTax Pro, formerly known as CPA Select, in which TurboTax users can be matched with professional preparers who can assist them with completing tax returns. Intuit tested CPA Select in the last two tax seasons.

Initially, Intuit thought the program would enable it to improve retention of TurboTax customers. But he said, "Testing has shown us there are some great opportunities to attract customer, who are accountant assisted and who never would have thought of doing it on their own."

Bob Scott
Bob Scott has provided information to the tax and accounting community since 1991, first as technology editor of Accounting Today, and from 1997 through 2009 as editor of its sister publication, Accounting Technology. He is known throughout the industry for his depth of knowledge and for his high journalistic standards.  Scott has made frequent appearances as a speaker, moderator and panelist and events serving tax and accounting professionals. He  has a strong background in computer journalism as an editor with two former trade publications, Computer+Software News and MIS Week and spent several years with weekly and daily newspapers in Morris County New Jersey prior to that.  A graduate of Indiana University with a degree in journalism, Bob is a native of Madison, Ind
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