eInvoicing & the story of the Third Pound Burger

Not too many people in this part of the world will be familiar with the name A. Alfred Taubman, and of those that are, many will likely associate the name with real estate, auction houses, or the business scandal and subsequent antitrust conviction toward the twilight of Taubman’s career.? However, in his book Threshold Resistance Taubman recounts a particular business anecdote that may be more familiar to people.

Back in the early 1980s, Taubman was the owner of A&W Restaurants in America.? The story goes that in an attempt to compete with the McDonalds Quarter Pounder Burger, A&W launched a Third Pound Burger.? However despite being price competitive, despite investing in premium radio and TV advertising spots, despite their ‘Third is the Word’ marketing campaign, the Third Pound burger just wouldn’t sell.? After engaging a Market Research firm to run focus groups to drill into the issue, they reached the conclusion that many consumers incorrectly believed that because 3 is smaller than 4, that a ? Pound Burger was smaller than a ? Pound Burger. ? People were opting for what they believed to be the bigger burger even though they were actually buying the smaller one.

Reflecting on this experience, Taubman mused that:

“Sometimes the messages we send to our customers through marketing and sales information are not as clear and compelling as we think they are.”

That quote has been bouncing around in my head for the last few months or so and it has me thinking about eInvoicing adoption across Australia and NZ.? Not just from a vendor perspective, but more from a market perspective. While there are various adoption mandates in place and there is no shortage of solutions in the market, and despite being better than traditional invoicing by almost any metric, there still seems to be a disconnect with some industries/businesses taking more of an "if it ain't broken, don't fix it" type mindset. That then begs the question of whether eInvoicing messaging is fully resonating with those industries/businesses.

I read an article about Xero’s research into eInvoicing where nearly half of their survey respondents incorrectly thought that eInvoicing was about emailing PDFs.? I mention this not as a criticism of those respondents, but rather as an observation on how the current messaging, in general, is not clear enough to correct these fundamental misunderstandings of what eInvoicing actually is.??Because of this misunderstanding, those respondents may already believe that they are eInvoicing enabled and are therefore missing out on the benefits that eInvoicing can deliver.

As different vendors with different solutions and interests jostle for position in the market there will of course be degrees of marketing spin that try to focus on the aspects of eInvoicing most important to each vendor.? Some may focus on the sending process while others turn their attention to receiving.? Some may focus on integration while others may be looking more at workflow automation.? The spectrum of solutions that eInvoicing can have an impact on is wider than most initially think.??

This isn’t a problem of “educating the market” so that it better understands this emerging industry.? It’s about using messaging that speaks to the market in terms of what it actually wants.? After all, the market may not know what eInvoicing is, but it knows it wants faster payments from its customers.? The market may not know what Peppol is, but it knows it wants to reduce the risk of 3rd party invoice fraud.? The market may not know what the specs of the Peppol eInvoice format are, but it knows it wants to spend less time on non-revenue generating overheads like inputting Accounts Payable invoices.

While the benefits of eInvoicing may seem obvious to those of us immersed in it every day, to everyone else it may be coming across as more sales noise.? If nearly half of the respondents in the previously mentioned survey don’t correctly know what eInvoicing is, how can anyone reasonably expect them to understand how their business would benefit from using it?? Rather than trying to convince organizations that eInvoicing will bring value, we instead need to help them convince themselves by communicating in terms of what they are actually looking for.?? It's up to us as the Access Points providers, Peppol Authorities, Solution Partners, ERP Vendors and Industry Associations to ensure our messaging is about helping organisations on their eInvoicing journey and not just about our own particular solutions.

If, as an industry, we can’t get the right messaging through then we risk eInvoicing becoming Third Pound Burger.? Even though it is faster, cheaper, more accurate, more secure, etc, people will buy what they believe to be the better burger.