Category: Selling Tax Services

If they’ll meet with you, they’ll hire you

The component of new client acquisition that stresses out most tax practitioners more than anything else is the sales component. I believe that the sales component is actually the easiest part.

Even though a consultative nature tends to be well ingrained in most tax and accounting professionals because of our academic training, putting on a “salesperson” hat makes most professionals cringe.

I’d like to share two realities of sales as a tax professional, however. Both of these realities completely take away the two biggest stressors of the sales component.

Unlike many other sales professions (yes, we’re in a sales profession — this is a fact that every practitioner simply has to accept), there really isn’t a whole lot of sales resistance once we’re actually face to face with a prospect. In fact, most other sales professionals would be envious of the position we’re in.

By the very nature of what we do, our closing ratio is unusually high. While many sales professionals in numerous industries (such as advertising media, household goods, industrial equipment, etc.) are excited to close 1 in 20 prospects, such a closing rate would be abysmal for us. While 100% isn’t to be expected, high double digit percentage is.

Basically, here’s how I sum up the “sales” side of being a tax professional: If they’ll meet with you, they’ll hire you.

With out marketing, we establish ourselves as an expert in our field, and position ourselves on the “right side of the desk” in the eyes of our prospects. By the time they actually come in for a consultation, they’re essentially already sold, otherwise they wouldn’t have met with us.

Again, not every person that meets with us is actually going to hire us on the spot. But, with proper long-term followup via a regular “touch” program, it’s possible to get pretty close to 100%. A 20% to 50% closing rate on the first appointment is not only achievable, but quite common.

I have had clients that hire me on the first meeting. For example, I did a first time consultation with a new prospect over the telephone this morning, and a few hours later I have a signed 2848 in hand and a check is in the mail. However, I have had other clients that I had to keep in touch with for more than a year before they ever hired me.

Most of the job of selling ourselves is done … Continue reading

Setting Expectations: How much does a customer cost to acquire?

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

Closing the sale and getting paid

Closing: The very word strikes fear into the mightiest of professional tax slayers.

The problem is that it doesn’t have to. If done properly, as part of your overall needs-based selling strategy, closing isn’t so much a distinct step of a sales process as it is a natural conclusion to the entire meeting.

I have met far too many tax resolution closers (unlicensed sales staff) that simply believe that the key to closing a sale is to pound the prospect into submission. While this technique does sell a couple hundred million dollars worth of client services each within the tax resolution industry, it is also the type of practice that garners unwanted attention from people such as the Federal Trade Commission and your state attorney general. Just ask Roni Deutch and Patrick Cox (of TaxMasters) if it was worth it.

The reality is that any client gained by coercion will forever resent you for it. Sales tactics like this are where BBB complaints, FTC investigations, lawsuits, and increased legislative regulation of our entire industry all stem from.

So what do you do instead?

Like I said, if you’ve done proper need analysis, layed out a solution with strong benefits to the prospect, the sale basically closes itself. Instead of needing to use a “tactic” or a “line” to close the sale, it simply becomes a very easy question: “Does everything we’ve discussed about the benefits of doing XYZ make sense? Well, great, let’s go ahead and get started on putting this IRS problem behind you.”

That’s it. That’s my entire “closing technique” (although I hate that phrase). It’s called “assuming the sale”. If your prospect doesn’t fully understand your solution, then they will ask questions. If they do fully understand your solution, then you can assume that they’ll do business with you.

I should state something that may seem obvious, but that many people actually miss: You should always be asking for the order. Always ask for your prospect’s business. If you don’t ask for their business, guess what? You’re going to starve. If you don’t ask, you won’t get the sale, and even worse, your prospect’s problem won’t get solved. And wouldn’t that be a travesty? Knowing somebody has a problem that you can help solve, but you don’t offer to?

The consultative, question-based process for closing the sale works like this. Ask your prospect:

“Do you see how bringing us on board would … Continue reading