Category: Selling Tax Services

Chances are you’ve already heard of this offering, but perhaps never given much thought to it. It goes by various names, such as “Audit Defense Service”, “Audit Protection Plan”, and probably the worst possible name, “Audit Insurance”.

Quick tip: Do NOT call it insurance. State insurance regulators will have a field day with you.

Pricing for this service can range all the map, from as little as $30 through services that Block and TurboTax offer, to $200 and up from bigger audit protection plan companies and bigger CPA firms.

What exactly are we talking about? Audit Protection Plans.

Firms have been offering some variation of audit defense, either packaged and sold directly with tax return preparation or as an add-on, since at least the early 90’s. Typically, an audit protection service offered along with return preparation applies to that return only, and provides a certain amount of work that will be done on the client’s behalf in the event they are chosen for an IRS or state examination of the return. Plans typically impose one or more limitations, such as to the number of hours of representation that are included, or excluding certain credits such as EITC.

By offering audit protection plans to all or most of your tax preparation clients, you are essentially spreading the cost of audit representation for whomever needs it across a large number of people, akin to an insurance program (but again, never call it insurance!). Since the IRS audits less than 0.5% of all tax returns, the overall odds of being selected for examination are about 1 in 200. Additionally, over 70% of examinations are correspondence audits, meaning that the representation work is actually done asynchronously (not in real time with an IRS employee), making it far easier to schedule such work around the rest of your day.

If you have 200 tax prep clients that each paid $99 for an audit protection plan, just as an example, that’s an extra $19,800 coming in to your practice from your existing clients. If only 1 in 200 requires audit representation, on average, then you can easily see that just offering the protection plan becomes ones of the most profitable services within your practice. In addition, you can charge different prices based actual audit risk. For example, since Schedule C filers get audited at a higher rate, your audit protection plan rate for that kind of return … Continue reading

The past few weeks I’ve touched on quite a few aspects of what you should do to close more sales, particularly within the tax resolution space.

It’s such a big topic, with so many details and intricacies that I can’t possibly cover in this newsletter, that I decided to create a new course covering the topic in depth. If you have in-depth questions about the tax resolution sales process, then this course is for you.

This course will walk you through the complete tax resolution sales cycle, beginning when a new prospect contacts you from your lead generation marketing. You will gain a better understanding of the consultation stage, learn how to simply and effectively close sales, and how to increase sales closing rates over time via effective post-consultation followup.

The needs-analysis based, consultative selling system taught in this course removes all sales pressure from the interaction, both for yourself and your prospective client. You will not only give more consultations, but close more of them, and each consultation will be more effective for both yourself and your prospect.

In addition, you’re going to get an “outside the industry” perspective on sales techniques. While our services don’t really require any of the “old school” sales techniques that are taught by the most well known sales trainers, I think it’s important for you to understand them and have them available to you. When you are wearing your sales hat, it is better to be prepared and have all available tools at your disposal, should you ever need them.

To recap, here is what you will you receive in this comprehensive tax resolutions sales course:

1. Nearly two hours of video sales training that walks you step-by-step through each phase of the sales cycle, from initial prospects to collecting payment.
2. Access to the 1-hour audio presentation titled “Timeless Face To Face Sales Strategies”, which gives you insights into the sales process from outside the tax universe.

Whether you need a comprehensive closer training program for your firm, or are a solo practitioner wanting to learn how to close the deal, then this course is for you.

Update: This course is now part of the comprehensive tax resolution marketing program.

In the past, we’ve discussed setting response rate expectations, and some of the metrics you should use to track your marketing and business in general. Today, we’re going to focus further on one particular metric.

If you ask 99.9% of American small business owners how much they spend to acquire a customer, they’ll either give you a blank look or simply tell you how much they spend on marketing. Knowing your cost to acquire an individual customer is one of the most fundamental business metrics that anybody operating a business should be able to tell you off the top of their head.

The cost to acquire a client is of particular importance to those of us that are professional practitioners. Why? Because a client for us isn’t a one-off transaction. Once we acquire a client, our objective is to keep that client for life, which means that client is providing us with revenue for years on end. There’s a metric for this, also: Lifetime Customer Value.

We are fortunate to be in a business where the investment we make to acquire a client can be quite large, since the payback to us in revenue is quite large, often from the very first transaction. Let’s run some numbers…

Let’s say we send 1,000 postcards to tax lien debtors. These are raw liens, in no way previously contacted by us. Our goal is to convert as many of these 1,000 tax liens into prospects that have actually contacted us.

Out of these 1,000 postcards, let’s say we get a below-average response rate of 0.5%, meaning we now have 5 prospects to work with. If we spent $1 each to send those postcards (about average for mailing lists, design, printing, and postage for “jumbo” postcards), then each lead cost us $200. Now that we have these leads, we obviously need to convert them to clients — this is the turn from marketing to sales, and is an important pivot point we will cover in depth in the future.

If we can then convert 2 of those 5 prospects into paying clients, then our $1,000 investment in marketing turns into $500 to acquire each new client. Since these are tax resolution clients in this example, the initial fee paid by each client will be several thousand dollars, meaning that our ROI per client is 5x to 20x, depending on your fee structure.

$500 to acquire a client that will … Continue reading