Darryl Stewart
By Darryl Stewart
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Loss Aversion and Medicine Hat Alberta

 

By Darryl Stewart, Head of the Herd

We have tried many things over the past year to deal with our somewhat unique situation.

Because of our partnership with Protegra, one of Canada’s leading IT companies, IBEX has an online payroll system on par (we say better, but I digress) with the likes of multi-national companies like ADP and Ceridian.  Because we are a small employee owned company, free of large overheads, legacy infrastructure costs and the need to make large quarterly profits, we can provide our great system and service for far less fees and do just fine.

This is our unique situation.  We can do it better for less.  We have a true cost advantage based on the latest technology and a strong company culture focused on doing more with less and having fun doing it.

Back to the drawing board!

Thankfully for us, our local Winnipeg and Manitoba market continues to support us and allow us to grow.  Our special system for Developmental Service Agencies gets us out across Canada and provides strong growth for us as well.

We have tried many things over the past year to try and stimulate growth outside the areas mentioned above.  Outbound sales to medium sized companies across Canada, Google adwords advertising, direct email appeals to major Canadian cities, a viral video campaign and my favorite, the “Why Not Medicine Hat” campaign.

None of these campaigns proved very successful.  In the final analysis we think loss aversion is the culprit.  That is the unique human tendency to fear a loss twice as much as we want a gain.

Basically, we are asking a company in Medicine Hat Alberta with 30 employees and 3 million in sales to give access to their bank account to a company in Winnipeg with 20 employees and less than 2 million in sales.  Further, we are asking that Medicine Hat Company to trust us to perform a critical business function every two weeks forever that will have a major impact if we screw up.   And we ask all this in return for saving a thousand bucks per year in fees.  Put in this context, the fear of us making a mistake is more powerful than the gain of saving on service fees.  The exception to this is in Manitoba and in Winnipeg in particular.  Hundreds and hundreds of happy local companies help new customers over the fear and give them comfort to proceed.  How can we make this work on a national level?

For now we are regrouping, figuring out how to best deal with this reality.  We made some friends across Canada through all this, especially in Medicine Hat and for that we are thankful.  We are also thankful for our wonderful local customer base that inspires us to get better every day and in the end have made us what we are.  Thanks Winnipeg!