Background: Xero is the ASX-listed accounting software giant used by small businesses, accountants and bookkeepers around the world. Xero's been listed on the ASX since 2012... but over the past 12 months, its share price has plummeted more than 57% as fears grow that AI could replace parts of its software.

What happened: Now, Xero has landed itself in a bit of a pickle. Last week, a UK influencer posted a sponsored Xero ad showing how she connected Xero to Anthropic's Claude. In the ad, she says she used AI to build a management account spreadsheet herself...something she used to pay an accountant to do. The kicker? Xero paid for that ad.

What else: Accountants weren't stoked. The post was pulled, and Xero's UK boss publicly apologised. The awkward part? Accountants and bookkeepers are actually key referral partners for Xero, yet it funded an ad showing customers how AI could replace some of their work.

What's the key learning?

💡 Selling to your customer's customer can turn your biggest partners into your biggest enemies. In Xero-talk, don't accidentally turn your biggest asset into a liability.

💡Xero's most effective sales channel runs on a B2B2B model. It sells to accountants and bookkeepers, who then on-charge the software to the small businesses they advise. With more than 100,000 partners globally, they're effectively Xero's unpaid sales force.

💡 Xero's direct-channel customers churn at higher rates than partner-led ones, meaning customers who join because their accountant recommended Xero... actually stick around longer. So, the advisor channel is one of Xero's best tools for keeping customers. And it's exactly why the influencer ad landed so badly.