Real Tax Business Success
Lesson - 14
Real Media ROI Tips:
Author: Chauncey Hutter Jr.
If you own a small tax business, located in a small town, and you had $100,000 to spend on advertising, do you think you could get your message seen, read or heard by your target market?
(I’m confident, if you spend six figures advertising your marketing message to a small town, you could definitely reach your target market.)
The problem is you would NEVER make any money!
Number one, the market size wouldn’t justify spending that kind of money anyway.
And number two, since you would be wasting 90% of your advertising dollars on prospects NOT interested in your tax services, you wouldn’t be able to prepare enough tax returns to offset the expenses.
The bottom line is: “You gotta turn a profit if you're gonna stay in business!” (and as an accountant, I’m sure you understand this! ☺)
But the same holds true for your MEDIA selection. It is NOT about “response rates”, despite what you may think!
So the “math” or your sales to expense “numbers” plays a very important role in your overall marketing equation. Like Dan Kennedy says, “Your numbers don’t lie. If you’ve got bad numbers, you’ve got bad numbers.”
(Sounds like something Yogi Berra would say, doesn’t it?)
The point being, your market and your message may be right, BUT IF YOUR MEDIA IS NOT AFFORDABLE (MEANING IT’S NOT PROFITABLE), EVERYTHING IS STILL WRONG!
Check out the example…
(Round numbers were chosen in this example to help you see that the role of MATH in all ad media is vitally important.)
Does Your Media Actually REACH Your Target Market?
What good is a quality target market for your tax services if you CAN’T reach them? (Not much.)
You could have the “hungriest market” in the United States, but if you can’t REACH ’EM with your sales message, you probably need to consider looking for a new target market.
OK, let’s say you’ve found a “hungry market” in your town. It happens to be the city police department and “other community police forces” like them in the surrounding area.
(We have a Member that specializes in this target market and she ends up getting even higher word of mouth referrals than normal tax businesses because cops KNOW EVERYBODY and they talk up her office accordingly!)
Anyway, the message is:
- “We specialize in police and other ‘professional service’ occupations within a 25 mile radius of our office”
- “My husband is a police officer, I understand the problems people in ‘professional occupations’ have” etc. (affinity)
- “20% new clients in a local ‘professional service’ occupation, plus LARGE cash rewards for referring their co-workers” etc.
(ARE YOU SEEING THE WAY TO GO AFTER A NICHE MARKET HERE?)
All right, she’s got the first two Ms right (market & message); now what about MEDIA?
She found this group was REACHABLE in a few different ways. (She tried all of them as you should if you can afford it.)
First, she advertised in the quarterly “professional” journal that hit the streets right before tax season started and right at the end before April 15th.
Second, she passed out fliers and coupons at the annual Christmas party in December with “early bird” incentives.
And third, she was able to get her hands on a mailing list that she mailed multiple times during tax season.
I don’t know her latest numbers, but when she last checked in, this little “niche” market had become extremely profitable for her in just three tax seasons. (High word of mouth within the departments, too.)
The point is she was able to REACH her target market effectively and her “numbers” speak for themselves!
So how are YOU going to use this simple example to increase your tax business this year? (The formula is easy to follow!)
Example:
Reach
Cost per
Total exp.
Unit sales
Total Sales
Gross Profit (@$100 each)
Val - Pak Coupon
- 10,000 homes
- .05
- $500
- 10
- $1,000
- $500
Direct Mail Sales Letter
- 10,000 homes
-.42 postage; .18 printing; piece including misc. = .60 TOTAL
- $6,000
-25
- $2,500
- ($3,500)
In this particular scenario, I’d choose the Val-Pak coupon over the direct mail sales letter. That doesn’t mean I’d always choose an ad in a coupon mailing to a direct mail piece. What it means is, if I’m checking my numbers properly, I’m going to lean towards trying the media that made me a net profit on the front end first.
I’ve kept some media running at a loss (on purpose) knowing I’ll make it up in profit on the back end. (ie. Referrals, “lifetime value” of a client etc.)
For now, just remember: If the media you choose can’t make money (or it’s not affordable) then look elsewhere for one that is!
Chauncey Hutter Jr.
Tax Marketing Expert
Chauncey Hutter, Jr, is a best-selling author and leading marketing consultant and success coach to the tax industry. Mr. Hutter grew his father’s $50,000 per year tax preparation business to a multi-million dollar empire with 24 locations, 400+ employees and over 27,000 tax clients all coming from his marketing campaigns.
For more info on Real Tax Business Success, go to www.taxmarketing.com
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Real Tax Business Success
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