DECISION: Should we invest in certain feature capabilities?
(Investing in US Merchant Sales Tax Helper)
Background
In 2018, US merchants are feeling pain in light of the recent SCOTUS decision that states have the right to charge sales tax on online transactions by out-of-state companies with no physical presence in their territory. We wonder if developing an integrated sales tax preparation application would be a worthwhile investment because it would be a valuable tool for merchants to use as they face the complexity of compliance in sales tax filing.
ROLE : Staff Researcher for SaaS Software company that supports small business owners on a merchant platform. Sole researcher for the project. Collaborated with data scientists to get the lists of merchants that met criteria.
STAKEHOLDERS: Product owners; Corporate Development
TIMELINE: 3 weeks total
Challenge:
Decisions about product capability investment needed to be made by the product team of a small business commerce platform. Customers were using a plug in application to help them comply with new US state tax mandates for online sales. That product reported on tax responsibility AND it provided a service to remit taxes on behalf of the customer. The business wanted to know if the app customers were using was a good target for acquisition, or if the business should invest in developing companion capabilities. The questions they were asking were primarily about the use and value of the application - would an investment lead to growth?
Methods:
I approached this starting with in-depth interviews with two groups: customers who had the app installed, and customers who had recently uninstalled the application. The interviews were conducted with the goal of understanding the usage and value of the app. When those interviews were completed and we had a set of value propositions to test, I used a product testing survey with a significant number of customers who had not installed the app to determine the perceived value and likelihood of purchase. Particularly, would they pay a premium to have the platform company file their sales tax remittance for them?
Results:
We learned that once customers understand the impact of the new laws on their business, most did not need to pay to have a company remit for them. The value of the app was perceived to be the reporting. The company decided to proceed with offering reporting build in to the platform and promote the app as a tool for remittance if customers needed that.