A Modest Post-Tax Season Marketing Suggestion

I have extolled the virtues of personalized marketing on numerous prior posts. I define “personalized marketing” as an approach that is focused upon an individual prospect instead of, for example, a print ad in the Elks Club newsletter, a radio spot or post cards to a given zip code.

So, here’s a simple process with proven effectiveness that is both easy to do and very appropriate right after tax season. To set the scene – it’s just after April 15th you will have just been involved in prep work for dozens of client returns. Now that they are fresh in your mind, the first step is to think about which of these clients you could be doing more work for.

Are you doing a business return for someone but not their personal returns? How about the flip side: the owner of a business who only has you doing their personal returns? Or, the client who has the temp help business, but you don’t do any work at all for his wife who is a doctor with a thriving medical group just down the street? And maybe you’re doing the returns for the owner of the local theater who is close to retirement … what are his plans for funding his retirement, etc.? Is he taking advantage of all the options available to set aside pre-tax money for later years? How might he minimize his tax exposure if he wants to get rid of the theater? The potential examples are endless.

There are a lot of billable hours hiding in the files of your present clients.

Your present clients are your easiest source of additive business. There’s an existing relationship; they like you, they have nothing but good will for you, they trust you and believe you are competent. There’s no reason why you shouldn’t be doing all their work.

The second step is a simple procedure. First, scan through your files and set aside all those that fall into the, “there might be more business in here” category. The third step is to grab the file on top of the pile, open it and look for some opportunity to, a) increase their income, b) cut their expenses/costs or, c) reduce tax liability.

Opportunities are everywhere. If they have a business it usually is not difficult to scan the numbers and pick up something, e.g. the client has a reasonable amount of AR but too much of it is 90+ days out, while at the same time he is experiencing a cash squeeze. Or, a client’s business is profitable but his bank line that was put in place years ago is now too small … maybe he’d better raise the limit while he still can. Or, a client mentioned she wanted to expand her warehouse and storage area … what’s the best way for her to do this? Lease? Purchase? Sublet? And, what about taking title … should she, for example, acquire it personally and then lease it to her business?

Another way to isolate issues is to look at one or more prior years and look for trends. Perhaps the pretax percentage has been declining, or certain cost categories have risen faster than expected.

If you are only preparing personal returns for a client the opportunities are fewer, but if a client mentions that they are looking into the possibility of starting a business, buying a franchise, selling a major asset, etc. there is certainly the suggestion that some planning or “what-if” projection would be in order.

Here’s the fourth step: You have selected a file (“Laura’s), found the a), b) or c) hot spot, and now, e.g. you make a copy of her Schedule C’s from TY 2008 and 2009 and put yellow highlight on lines 7 and 28. You then take a regular 3M stickie and hand write, “Laura, check out the highlighted lines. Your expenses have risen much faster than your revenue. I think you are leaving some money on the table. Let’s talk. Please give me a call.” And, you sign it with your first name. The fifth step is to tri-fold the two Schedule C’s with your stickie affixed so she sees it when she unfolds the envelope’s contents, and then mail it.

What’s her reaction when she sees what you’ve sent? First of all, the two copies are highlighted, so she knows immediately what to look at. She reads the stickie and has several conscious and unconscious impressions. They include noting the personal touch communicated by the handwritten note, that you have a personal interest in her situation, that you didn’t treat her like a number and instead noticed – and took the time – to put this together and write her, that you care about her success and welfare, that you have taken the time to make it simple for her to understand the issue, that your note conveys concern, that you are trying to help her, etc. etc. Even if Laura never calls you, she will retain all these positive impressions. If nothing else, the likelihood of her referring you to a prospective client is higher than it has ever been. As my son says, “It’s all good.”

My clients who have taken these steps report they get calls back from about half of the clients. Each one represents a marvelous business opportunity for more billable hours. Planning, project work (e.g. running what-if projections for the client contemplating acquiring more warehouse/storage space), advice, consulting are all on the table.

The percentage of responders you convert into additional work will be maximized if you meet with them personally, but if you have a strong relationship with the client you can do well on the telephone. The positive result isn’t just more short term billings. For example, it is axiomatic that the more different things you work on for a given client, the greater the probability they’ll remain loyal, less fee sensitive and stay with you long term. Another bonus is the more proactive you are for a client, the more apt they are to refer business to you.

Elliot told me that in 2008 he spent part of the Saturday following April 15th reviewing files and writing stickies. He put together 22 that afternoon; had 13 return calls and he converted 7 to project or consulting work.

Not bad for an afternoon’s work.