Mazuma is a UK firm that goes against a lot of conventional wisdom in the accounting world. Rather than trying to avoid being a commodity, they have embraced it and taken a high volume, low margin approach aimed at capturing the individual and small business market. I was initially taken by their model and wrote a blog post about their business strategy. I decided it was worth a closer look. Co-founder, Lucy Cohen, handles most of the marketing and business side of the firm. I recently caught up with her for a one on one interview.
Q: How did you come up with the idea for Mazuma?
It all started with the tax panic we saw all of our friends and family go through. My partner, Sophie Hughes, and I saw that everyone had great difficulty with tax time. We looked around and asked ourselves, “what is the simplest way to do this from the customer’s perspective?” And it grew from there.
Q: Your approach is very different from the typical accountant’s. How did you develop it and what gave you confidence to move forward?
We looked around and found out that there was really no one else who was doing anything like this. The whole accountancy profession was very stuffy — the old men in gray suits image — and not very entrepreneurial. We kept asking ourselves “why isn’t anyone doing it?” I suppose it’s very difficult to change.
So we started testing on a small scale and refined the process as we went along. That’s where we developed the “purple envelope system.” Each month our clients simply pop all of their tax-related information in a big purple envelope and send it in. It couldn’t be easier. Shortly after we got started, we won a business competition based on our business model. This gave us a lot of publicity and really boosted us on our way.
Q: Why do you call your firm Mazuma?
Mazuma is an old Yiddish term for ‘money.’ We didn’t want to call it Cohen & Hughes and be like every other firm. We wanted something that would stand out, be relevant to what we do and not tie it to us as individuals. Mazuma seemed to work.
Q: I notice that your basic package prices are fixed and published right on your website and seem quite affordable. What makes this business model work?
We’ve studied the process very carefully and keep refining it. It’s like a factory system. We are focused on high volume and low margins. We know the average number of bits of paper in each envelope, exactly how long it takes to process them, etc… down to the penny. Sophie is really on top of that aspect of the business. Each client is assigned a team consisting of 1-3 accountants and about 6 bookkeepers. This allows for cross-checks and also keeps our response time to any inquiries down to less than one business day. We know the model works well. We have a 92% return [client renewal rate]. In the UK a 75-85% rate is considered very good, so we know the model is sound.
Q: One thing that most professionals believe is that client loyalty belongs to the individual provider and not the firm. Your experience seems to be different.
We’ve worked hard to build client loyalty to the brand and not the client relationship. Everything we do from the look and feel and personality reinforces the brand. It really seems to have taken hold. Our chief envelope (Mr. P) has taken on a personality of his own. People seem to really enjoy it and they develop sort of a fan club. It’s really quite remarkable.
Q: I notice you’ve built your brand around the color purple. Why purple?
Why not! [She laughs.] We wanted something that would stand out, that’s really quite different than the image of the rest of the accountancy profession. We were also two women, so we didn’t want to use pink or anything that was too “girly.” Purple is regal, it’s happy and it stands out. It’s worked well.
Q: How do you promote the brand?
In addition to the standard ways of promotion such as PR and the like, we have relied heavily on social media and the website. We are active on twitter, Facebook and LinkedIn — all where we profile the brand and have our blog. We also do a lot on pay-per-click advertising and SEO. We like those because they can show direct business results for us. We encourage people to ask tax related questions and we respond to all of them, even if they are not a client. It helps build our brand.
Q: What is your exit strategy?
We built the firm to sell. Everything we have done has always been with an exit strategy in mind. We’ve asked ourselves “how much can we do and how far can we take it?” We see opportunities to expand and are thinking about taking it to other countries, including the US.
