The Perils of Success

When a small business grows, that growth creates potential for successes and failures. Sometimes, success can bring about some failure. We experienced some of that this January at Tax1099.com.

First, I want to talk about how we measure success. We have been growing our number of 1099 forms e-filed and the customers we file them for by around 100% annually prior to this year. Our expectation for the 2013 filing season was to exceed that rate by another 100% given some of our new partnerships. So we were expecting to grow by about 200% from the 2012 filing season. More important than the numbers, we measure success in customer interactions. Any failure there, whether in site performance or chat/phone/email interaction, negates any positive gain in the numbers.

With that in mind, I want to look at how we performed in those two measures.

• Numbers – We experienced 295% growth in the number of forms filed in January 2014 compared to January 2013. We also saw 105% growth in the number of submissions (“submissions” is anytime someone clicks Submit, whether that is one form or hundreds of forms). That means a significant number of filers were filing higher forms per submission than in previous years. A higher number of forms per submission points to a growing base of accountant/bookkeeper users, who may e-File 1099s for many clients. While some of those clients may have only 1-3 forms, others will have dozens, hundreds, or thousands of forms to file. In other words, the numbers were significantly higher than we planned for. Higher numbers is a success, but the dramatic increase led to site performance issues, mostly during the afternoons of January 28-31.

• Customer Support – While we received many glowing compliments regarding our site and service, we also heard from too many (and one is “too many”) dissatisfied customers. Some had issues with the site slowness that was attributable to the terrific volume we experienced. Others felt some of our integrations, particularly with Bill.com, were too cumbersome to work through in a timely manner. Still others received poor customer support when they contacted our team with an issue. Any one of these instances is enough for me to give the entire season a failing grade. The combination of them makes me sick thinking of the failed opportunities to support our customers.

So, where do we go from here? First, we boost our infrastructure to overcome the site performance issues. We will be doing that after the filing season ends to avoid any complications from making those changes while customers are still e-filing 1099s. At the same time, we are expanding our support offerings. One thing that you will see before filing season next year is a searchable Knowledge Base to answer “How do I…?” questions. While some customers prefer to speak or chat with someone, others would like to find the answer themselves; the Knowledge Base will help with that. Another improvement will be the creation of Quick Reference Cards (QRC) to supplement certain Knowledge Base items and the 1099 e-File youtube videos we posted this year; the QRCs will mostly assist with integration and import topics. Third, we hire and train more support personnel. Those three items will go a long way toward removing the obstacles that kept us from growing as much as we could have this year. They will also help us to provide much better customer service in the future and help sustain our growth.

Overall, it was a valuable, if not successful, January filing season. We learned a lot of lessons that we will incorporate into our planning to improve our site and service. We will have better expectations of the tremendous volume that will come from our integrated partners next year. We will also incorporate many user feedback suggestions into our updates of the system between now and the end of 2014 for the next 1099 e-File season. Next year at this time, with these improvements, we hope to report a truly successful January.

Thanks for your time.

Ed Pratt
Vice President of Business Development
Tax1099.com