B2B Inspired

The Strategic Importance of Singular Focus

BlueOcean | The B2B Agency Season 1 Episode 20

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Episode 20 features Asantha Wijeyeratne, the entrepreneurial force behind PaySauce, as their team navigate the challenges and triumphs of innovating in New Zealand's payroll industry.

This is a tale of sustainable growth, customer empathy, and leveraging third-party tools to elevate the client experience. We delve into the complexities of B2B marketing with Asantha and co-founder Troy Tarrant, who create simple, compliant payroll solutions for SMEs.

The episode uncovers the importance of customer satisfaction and empathetic support for small business owners in a stress-filled environment.

Swayed by numbers? See how the Net Promoter Score (NPS) impacts a company’s financial health and the role of CRM systems in building lasting customer relationships.

Learn about PaySauce’s strategic move from legacy systems to innovative solutions, capturing niche markets through community networking.

Celebrate with us PaySauce's eight-year journey to cash flow breakeven without constant investor funding, and envision the future of AI in enhancing SaaS community interactions.

For more B2B insights, ideas and opportunities, head to www.blueoceanagency.co.nz

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Let’s roll up our sleeves and take on tomorrow together.

Dale Koerner:

Kia Ora, and welcome back to We Do B2B, the podcast by Blue Ocean, where we unpick the ins, outs, ups and downs of B2B marketing here in Aotearoa, new Zealand. I'm your host, Dale Koerner, and I'm a B2B marketer like you. From emerging trends and thinking to inspiring real world stories from smart, good people here in New Zealand, we are here to help the New Zealand B2B marketing community to become one of the best and brightest anywhere in the world. If, like me, you're a B2B marketer looking for a place to connect, learn and be inspired, you have come to the right place. Welcome back to We Do B2B. We are still here at Southern SASS 2024 for the Southern SASS sessions of we Do B2B, really looking forward to our next guest.

Dale Koerner:

For us marketers, it can sometimes be easy to lose sight of the fact that someone else has got their neck on the line and we are serving a greater good and we are working towards supporting somebody who's taken a risk. Our guest today, Asanthe Vijayaratne, is someone who has taken such risks twice over, as a founder and a co-founder. Asantha, welcome to the show. Thank you for being here. Thank you so much. I don't want to overdo your side of the story from my perspective, so take us through your journey. You are now CEO and co-founder of Paysauce. For those who are listening and not watching, you won't be able to see the t-shirt, but for those of us watching, it's plain as day. So take us through Paysource and your journey.

Asantha Wijeyeranthe:

Yeah, so this is my second time back in the payroll space. My first incarnation was with a company called Smart Payroll. I sort of took that business from zero in the space of nine years to being the largest SME payroll business in New Zealand and in 2013, I exited that with no intention of coming back into payroll. I was unhappily retired for a year and I kept thinking you know, the thing I know best is payroll.

Asantha Wijeyeranthe:

The market I understand and have got to know is particularly the SME space is who we serve, and I came back in 2015 with my co-founder, troy Tarrant, and the whole idea was people who run technology allows us to start businesses very easily. Who runs technology allows us to start businesses very easily right now. So if you, if you think about your business, you know 10, 15 years ago you'd heard a team of people there's two of you running the operation here and technology is enabled you to do that. So that has meant that a whole range of people have gone into business, and when you then start employing people, you take on the responsibility for that, and particularly in New Zealand, we have a very complex payroll legislation, particularly around the Holidays Act, and so there are a lot of businesses that will not take on that next employee or their first employee because they're so terrified of getting it wrong.

Asantha Wijeyeranthe:

So the idea was how can we provide a simple solution that ensures that an employer is always compliant and it's as easy as ordering your pizza? That's the standard for us, right? So we're in the business of setting peace of mind and time. That's what we're doing, and if you look at the market in New Zealand, if you look at the market in New Zealand, there are 2,800 businesses that employ more than 100, and there are 100,000 businesses that employ between one and five, which is the market that we are really interested in. That is the least served, and a poorly served market at that, because in order to make a difference in that market space, you need scale and and that takes time and that takes getting that product market fit right sorry, I've gone on there.

Dale Koerner:

No, it's great, we're straight into it. I'm happy to get straight into the guts of it. So your customer base are they here or are they overseas?

Asantha Wijeyeranthe:

the majority of our customers are New Zealand. So far, we started the business and we continue to have global ambition. The international customers we have are those that we got via an acquisition that we made. We acquired a small payroll provider called Smoothpay, and so you know we are one of the larger providers of payroll in Samoa, in New Guinea and in the Pacific Island states, and we've got some customers in Australia. So that's the presence that we've got as PaySource. We haven't yet launched outside New Zealand, but that's something that we've signaled that we will do, and we will do when we feel that the timing is right.

Dale Koerner:

When it all makes sense. Yeah, yeah, no, I, I understand that and respect that. So when you exited your first uh, your first venture, um, you said that you were unhappily retired. Yep, is that just that? You are the type of person who needs to be working on something. You just couldn't' sit idle.

Asantha Wijeyeranthe:

What was the yeah, you don't discover these things until you're in it. And all my pretty much all my adult life I had always imagined this day that I would be retired and I had this idyllic image of me being a non-executive director on early stage tech businesses. I had it all planned out and the exit was really good, so I didn't have to work again, made some investments and six months into that journey I realized that I'm just not cut out for that. I don't have the personality where I can be a non-exec on an exciting tech venture. I liken it to being in a badly driven car handcuffed in the backseat, and I thought I can't put up with this. My wife by that time was getting fed up with me sort of mooching around. I rented an office just to go somewhere and I used to read the newspaper and surf the internet and then I kept thinking you know, the thing I know is payroll.

Dale Koerner:

Yeah.

Asantha Wijeyeranthe:

And there's still so much of blue sky both in New Zealand and outside that I just felt compelled to go back into it. I've now become one of the old men of payroll in New Zealand. You know this is coming up 20 years in this sector and I love it because you can see the impact you make. Okay, you meet customers who are delighted to meet you, so one when I started the journey of entrepreneurship for me one of the key criteria because I came from working for large companies and it was for me it was a soulless, unsatisfying way to be because you didn't feel like you were making a difference and I didn't like the way customers were treated generally or employees were treated generally. So I set myself a very simple standard to measure. I said is my customer going to be delighted to see me or do I feel like crossing the road when I see her? That's the criteria.

Asantha Wijeyeranthe:

And now I meet customers and to know that we are making a difference, because it is a hell of a responsibility. We are now paying 75,000 employees in New Zealand. We are paying $2 billion of payroll every year goes through our system, so that 75 000 people and their families who depend on their paycheck being accurately calculated and being paid on time. Yeah, that's, that's a hell of a responsibility. It is, and and we take that really seriously and and we know that you know, if we don't get it, we don't get the money to the person on the day, they're not going to be able to afford or buy the groceries for their family that night. That's how serious and important the task we have. And to be able to do that where the person running payroll you don't go into business to become a payroll expert.

Asantha Wijeyeranthe:

In order to run payroll properly, you need to have a good understanding of payroll. So what we've done is use technology to make it really easy. We think we use a smartphone to book flights, to book hotels, order pizza, open a bank account. You do all of those things. But we think accounting and payroll is hard and it's treated differently. We see there's no difference. It's exactly the same thing, and so we see that there is a very strong relationship between a consumer-type marketing strategy and a business-to-business. So a small business owner is an individual, so it is very similar. What would motivate them to buy from us is no different to what would motivate them to change the brand of pizza they consume or the soap powder they use to wash their clothes. It's the same thing.

Dale Koerner:

They are the decision maker. There's no bigger, complex buying group, and that's why I love the sme piece.

Asantha Wijeyeranthe:

There is no rfp to complete. Yeah, the person who buys it has the authority to do it and they feel the pain yeah, so if they are burdened with the payroll system they've currently got, it's a pain that they feel acutely and they feel personally yeah, yeah, and it impacts them.

Dale Koerner:

You know. It's that moment on Monday night we're like, oh shit, have I released payroll? You know.

Asantha Wijeyeranthe:

Yeah, if you look at the number of people who get penalized by the IRD for late payment of PAYE, it is a significant portion over each year. The reason is not because they didn't have money in the main there might a very small minority but it is because you got to think I've got to get the order out, I've got to do the roster for next week, I've got to get stock, I want to do all of these things, yeah, and then they go. I've got to do apparel, right. So what we want to do is say, like, a business owner can have eight to ten things on a list in their head, right, and if you can help them cross off two things calculate their pay and pay their people, which is what we do yep, and that's two things that they can put. Something more important that actually adds value, that either drives revenue or reduce costs for them, that's that.

Dale Koerner:

That's that's what we're looking for I love that perspective as I'm growing up back the UK. My folks ran their own business. They were a precision engineering subcontractor, so I grew up in the SME space. I still love it. It's like it's my absolute happy space. It really is, because it's also like you said it's an area where you are intimately connected with what the client is trying to do, what they're trying to achieve, and you know full well that you're actually helping them make progress, get ahead, save time, free up energy, whatever. How do you go about creating that same appreciation across a business with 50 staff?

Asantha Wijeyeranthe:

Yeah, that's a really interesting question as we've evolved. That's something that we've sort of kept at the heart of it is we cannot forget who we serve, and it is that business owner. And so, in everything we do in terms of who we hire, we hire people who have empathy. Without exaggeration, the stress at different times that a small business owner can be under is significant. Yeah, yeah, you know, we it's. It's if you cannot overstate how, how stress people get and and and, therefore that the idea is, if you can, at the end of an interaction, so someone will ring our help desk when they need some help and it'll be time sensitive because they need to finish payroll. There'll be other things going on. At the end of that conversation, the judgment is very, very simple Does that person feel like they have been listened to, heard and supported at the end of it, that they don't feel stupid for asking a question that people think I should know this stuff.

Dale Koerner:

Nobody knows this stuff.

Asantha Wijeyeranthe:

There's no degree in running a small business, no, no, and payroll is a technical space and you cannot be expected to know this stuff. But people have this expectation and so our team, if it's an inbound phone call, is, or an email inquiry or a chat, is we. If you can leave the business owner with the feeling that you know it was not a stupid question, it is a legitimate question and we've answered that, they're happy. Then that manifests itself in a magic number which we call the net promoter score. So we live and die by NPS. Okay Right, so NPS is the most important number for me, probably only second to profitability. Okay, right, but a high NPS will give you profitability and that's something that I've come to love.

Dale Koerner:

We often will talk to the clients in exactly the same language. If you've got good client satisfaction, good staff satisfaction, everything else tends to fall into place, so long as you're not driving an unprofitable business model. What is your NPS score?

Asantha Wijeyeranthe:

We've ranged between. We've had our lowest is 48 and our highest is 70. And so we've ranged in that number. Yeah, we disclosed this as part of our annual return, annual report. We disclosed the number. Yeah, and it's a game we play. You can guess the NPS number because you know what's going on on the floor Because, like you know, no matter what people say, there'll be times that we get things wrong.

Asantha Wijeyeranthe:

It might be, you know, we didn't have enough people on the help desk, it might have been a training issue, someone might have been too early into the role. You get a sense of it and, like I'm, nps time, I'm probably the most nervous time, but also, instinctively, you know roughly where it's going to fall. We just finished one last week and we moved up seven points from the last time. Great, because we've gone with Salesforce, we've put in a new CRM system, we've done some automation, we've built our knowledge base. So we've done all of these things to help the customer answer some of those questions themselves. And that is again reflected in the nps number. Because the nps number is crucial to us, because we believe that the best marketing is the delighted customer, the. We get two-thirds of our work, I would say as a result of a direct referral from a friend neighbor, yeah, or them asking their professional advisor and accountant who should they use for payroll? And if you're not providing that delight factor, you're not gonna get that. So that's why that's so important for us.

Dale Koerner:

It makes complete sense to me, and particularly in an area where I don't know how much motivation there is to switch. I mean that, I guess, is one of the challenges. Right, you've got legacy systems and you've got the oh, it's just better the devil. I know that kind of mindset.

Asantha Wijeyeranthe:

That is the biggest obstacle we face. So someone I've got friends of mine who I've been in payroll and I said, coming up 20 years I've not been able to switch them from the existing system they've got. These are people that have a beer with me but they're so wedded to what they've got they do not want to take a chance in changing. So what do you do? So the decision we took and one of the biggest learnings I had in the early days of the previous business we had a direct sales team that went out and canvassed people and looked to flip. After a number of fruitless years of trying that, I made the decision at that point that we're never going to flip them. So what do we do? When do people buy? They buy when they're absolutely fed up with what they've got or they're new, so they're taking their first person. So how can we be at that point that they take that decision?

Asantha Wijeyeranthe:

And the maxim that I work to is I hate the sale that I lose. When someone didn't know about me and they went with a competing product, yeah, they never even considered us. They didn't know who the heck we were. Yep, I hate that. I hate losing that sale. They stink. Yeah, if they looked at us and looked at someone else and pick someone else because they offered XYZ feature, I can live with that. Yeah, that's that and and and. We are not. We are not for everybody. There's a certain type of customer that that we're appropriate for, yeah, and there are some things that we don't do, yeah, and so I can understand that.

Asantha Wijeyeranthe:

So so then it became how do we create that awareness? Um, which is what's led us to to doing things. We've we've picked niches and and, and we've gone out and owned them. So the first niche that we really focused on was new zealand dairy farmers. Okay, 65 of new zealand dairy farmers that employ use us whoa, right, that didn't happen all night, no, that, that happened over a period of time. So we, for a number of reasons, we picked that sector. It's one of the neglected sectors, but we also know that amongst industry groups, they are a consistent group, yep, and they talk to their fellow farmers Super tight network.

Dale Koerner:

Super tight network.

Asantha Wijeyeranthe:

So you know, if you get it right, it works for you, if you get it wrong, it works against you as well. Well, the same way. Um, so we initially started off and said who are the most influential dairy farmers? And we, we, we targeted that group and and they were our first customers. So andrew hoggard, who is now a minister in in in parliament uh, he was the, he was the head of feds at that time for dirty and he was one of our first customers because he's got a voice and so, the same way, I think pretty much all of the board of federated farmers are customers. So that then gave us people who had a social profile and that allowed us.

Asantha Wijeyeranthe:

So if you go on to a farming group and say what pet oil should, should, I use, you'll find that you know, that's the predominant, predominant name that comes up. So it meant that we went to field days. So we are that's. That's one of the one of the traditional things we do and we go to, we support the industry and we do, uh, we, we run as an award for the best farm boss. So these are the things that we've done that see us as part of that industry. Now, our payroll is not specifically geared for the dairy sector. It's not a technical thing, but we're seen as the payroll solution for that industry.

Dale Koerner:

What resonates with me and what you're saying there is that when you talked about those moments in time when you should have your hat in the ring, when people should put PaySauce in their list, when they're fed up or when they're scaling and they're bringing their first staff up, that's a moment in time I'm dialing this back to marketing speak and lexicon here so I'm like, okay, cool Category entry points, that's what we're talking about there. So I'm like, okay, cool Category entry points, that's what we're talking about there. Then, when you're talking about how you've infiltrated, you know, the farming community, what stands out to me is that you've had to build an amount of brand awareness there. You've had to focus on that awareness piece and double down on brand without, you know, really targeting so tightly on that acquisition piece. But you've lived it and you've actually demonstrated the value of the brand through your actions rather than just your words.

Dale Koerner:

You're there, you're present, you're at field days. Case in point that speaks strongly to that audience that says we actually back this industry. We can run ads all day long on Newstalk ZB with Mike Hosking, but when we actually turn up and take up a stand at Field Days, we're putting money back into the industry. So hats off to you guys for actually going and doing that. I mean particularly, like you said, a traditional industry. When you're selling cloud-based tech service, that's fantastic. What other industries have you gone after?

Asantha Wijeyeranthe:

So if you look at our customer profile coming up with the last two years ago, so we had a very strong Dairy farming, obviously yeah, but on the back of that we had Rural businesses.

Asantha Wijeyeranthe:

Yeah, that had nothing to do with dairy farm, mm-hmm. So you'd find a medical center that is in Invercargill will sign up and say how did that happen? We don't run any ads in Invercargill, we don't run any promotions. How did that happen? It happened because a dairy farmer went into the medical center, met with the doctor or whoever ran the payroll and who was complaining about what they were doing in their payroll system, and they said you should give these guys a go and we pick up clients in the most obscure parts of New Zealand. So the stat that really got me sort of thinking is we had more clients in Wakago than we have in Auckland, right, fantastic, I love that. So the change in focus has been on Auckland, right, fantastic, I love that. So the change in focus is being on Auckland. So that's, we've started. We've got two people full-time based in Auckland, yeah, and on top of that we've gone for the trades. So we're talking about builders, electricians, plumbers.

Asantha Wijeyeranthe:

That sector again has very similar profiles. And again, again, we know that we're not going to win that overnight. You know, again, we've got to turn up at the event that that they'll be at. You know, we've got to go to the award dinner and and that's the other piece, it's, it's really really tempting and and that's where I think a lot of people get this wrong is that once you get presence, then should you stop doing that.

Asantha Wijeyeranthe:

Do we? Do we go to do? What's the point in going to field? Is this year, there is. Every point to going to field is there because there are people entering that sector all the time and the people leaving that sector all the time, and and if you are genuinely committed to it, then you will stay the distance. Yep, and you know people spot a fair with a friend very quickly and so you know it's a, it's a friend very quickly, and so you know that commitment is really, really important. So for us, the one that we are after now is the, the tradie sector, and understanding the pain points there, and how do we reach that and how do we start again? It's just using the knowledge that we've gained in dairy. So it is. Crossing the Chasm was a book that motivated me and it talked about finding a niche and owning it essentially, and we just keep repeating that. It has been the path for us.

Dale Koerner:

I really like your analogy around around the staying the course and people spotting a, you know, a fair weather friend. Um, I remember one of my early business lectures. I would have been 17 at college and it was, I think the guy was.

Dale Koerner:

The guy's name was josh josh something. He was cool, great later, but he was talking about maintaining brand um, and his analogy all the way back then was it's like asking a pilot or the second officer of a 747 why there are two of them and an autopilot. It's like, well, so the autopilot switches off. We need hands, we need to be there, we need to make sure that this thing stays flying. So good on you for maintaining that investment in that brand piece in those different markets, because that's it's. It's very easy in the software as a service space, which is very acquisition focused. You know it's very much mqo, sql, it's very much like that funnel, yep. But to actually hear you talking about doing a good job of brand and maintaining it and continuing to invest even when you've got 66%, 65% market share in that space, that just tells me everything actually, to be honest.

Asantha Wijeyeranthe:

Yeah right. And here's the strange thing the financial results support that. So we are acquiring customers for six months of revenue, so we've got one of the lowest customer acquisition costs in the SaaS sector. An average customer is costing us six, maybe seven months, depending on what we're doing. That's pretty damn good. That's yeah Right. So, and I know what others pay to acquire a customer, but it's like so will I get a sugar head of getting a whole bunch of tradies signing up in the next six months in Auckland? The answer to that is no. Those results I'm gonna see next year. It is the work we do today that will give the results, which is why being an older founder helps. You've seen these cycles before In terms of, again, as a business we elected to get to breakeven. We decided that we're not going to be raising round after round. We have cash flow breakeven. We've made sure that we are not dependent on shareholder funds. We depend on real revenue that our customers are paying us to support the business that we've built.

Dale Koerner:

Which, funnily enough, is this remarkable thing called a sustainable business.

Asantha Wijeyeranthe:

I learned about that at business school. The aim is to make a profit. Yes, and that's not a bad thing, it's not a dirty word.

Dale Koerner:

I have to say, as a marketer who, from the B2B agency side of things we work with clients in a lot of different spaces Paysauce sounds like a great place to be a marketer. Honestly, I hear what you're saying here and I'm like, wow, you guys have got the long-term view that just about every marketer aspires to have and to have supported.

Asantha Wijeyeranthe:

We've done everything with a lean team and we're leaning more and more on the technology that we're seeing in Salesforce. It is how do we create those moments at scale? It's how do you translate. It's easy when it's people, but how do you do that at scale and how do you provide a sense that in the end, if you boil it right down, the emotion that we are looking for in either a potential customer or an existing customer is that we care because we do, yep, right. So how do we communicate the fact that we care?

Asantha Wijeyeranthe:

So you know, when we put in, when, when we had to put in a phone system, I said one of the things that people hate is going on hold or not knowing what's happening. So let's put control into that. So so we've through that journey. We spend a lot of time thinking through that of how do we put the power in the hands of our customers saying you know you, if you don't want to wait till someone can get to you, here are some options you can do.

Asantha Wijeyeranthe:

If you want to try and sort this problem yourself, here's what you can do. And If you want to try and sort this problem yourself, here's what you can do If you really, really, really want to get a hold of us, then we'll give you a means of getting a hold of us". And that came from. I ran a cinema in Wellington and it takes you through an automated thing and it says at any point in time, if you want to talk to a human being, press zero. I've never pressed zero, but the fact that it gave me the power to do that, I don't mind going through the automated thing.

Dale Koerner:

Because you know where you're at in the process and you know that there's an escape hatch. Yeah, it speaks to an enormous amount of customer empathy and actually genuinely feeling everything that I hear from you. It's about feeling the pain that your customer is up against and, at the end of the day, that problem-solving space. I mean, how long did it take you guys to get to where you are now? How old is PaySauce? Eight years, eight years, yeah, I mean that's a relatively fast acceleration curve in a pretty small market to get to a point that's, you know, a solid, stable business.

Asantha Wijeyeranthe:

It's um and that has to have come from understanding the customer and having a good product. Market fit Is that isn't. Isn't that what business is about? Is understanding the problem that your customer has and fixing it and and being paid a fair price for doing that.

Dale Koerner:

It is. I paid a fair price for doing that it is. I mean, it feels like it feels like it feels like the 101, but I think you often see for the sake of it, because we can't, rather than actually saying, is this a thing that the the market needs? Um, it's actually so refreshing to hear you say that, to be honest and I know that that might sound, it might sound trite at the end of a conference which is all about software as a service and solving problems, but it's so refreshing to actually hear you say it's grounded in solving problems for people and being paid fairly for it.

Asantha Wijeyeranthe:

Yep yeah, now we, we, that again, that's a really, really important um, it's, it's, it's been. One of the failings in the payroll sector, particularly in New Zealand, is the undervalued nature of that service. So, you know, someone will pay happily, they'll pay $500 a month for an HR system and they'll quibble about paying $3 a pay slip for a payroll solution. And we do so much more and that's a historic thing. And again, we set out right from the get-go of not being price-driven and at times we've led the market on that Yep, because if we can make a dollar, we'll reinvest that back and that improves what we can do. We can get the better Salesforce subscription, we can do some of these tech things.

Asantha Wijeyeranthe:

And you know, again, ai is a really interesting thing, which now this conference again has a lot of AI elements in that, and we were talking amongst ourselves. It's how do you use that to enhance the human interaction rather than replace the human interaction? Yeah, yeah, and in the end, I think that's the more important piece. I don't know. I don't believe that humans can be replaced by a machine. I honestly don't think so.

Dale Koerner:

I think there are areas that they can eat a load of work really, really well, but human intuition, excuse me, human intuition, human empathy, that's actually one of the things that makes the difference. It really is, yeah, yeah. Do you have any final thoughts to share with the audience? I mean anything on the role of community within software as a service, any advice to B2B marketers. Closing remarks and thoughts.

Asantha Wijeyeranthe:

Yeah, I think that community piece is really, really important and, again, looking back and reflecting, for us that has been a really important piece and it's being, like you know, we do two sponsorships we do Taranaki Rugby Football Club Again, we picked a provincial team, um and and we do some of the the wellington women's teams and and it's about again giving back to the community that is supporting you and and and that creates that bond where people associate your brand not just with the solution but you, but they recognize the people behind it and for us that has been a big factor of success.

Dale Koerner:

It's connecting with people on a much deeper level and it's a fantastic place to end the conversation. Asanto, thank you so much for the discussion, really really have enjoyed it. It's actually been a really refreshing conversation for me. So thank you so much. Thank you, I really appreciate this opportunity. That's that. Thanks for listening to. We Do B2B by Blue Ocean, now brace for CTAs. If you want to join and grow the community, make sure to subscribe. Wherever your eyes and ears absorb information, don't forget to switch on notifications so you know when the latest episodes drop. And for more B2B goodness, be sure to follow Blue ocean, the b2b agency, on linkedin. Now look, you know how this next piece works. The more reviews we get, the faster this thing grows. So please do for us what you hope your customers would do for you leave a review and share your thoughts. Let's stay connected and keep the b2b marketing conversation going.