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Tax Resolution Marketing Letter: Why it works

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In marketing parlance, your most successful marketing piece, the one that becomes your lead generation workhorse, is called a control.

Over the past couple hundred years, there have been a number of marketing controls that have had incredibly impressive runs. Two of the most famous examples from recent times:

  1. The Wall Street Journal’s “Two Young Men” letter, generated nearly $2 billion dollars in sales for the Journal during it’s 29 year run. It was mailed continuously by the Journal to select household mailing lists from 1974 to 2003. It is considered the single most successful direct mail sales letter in history, and is well worth studying.
  2. Self-help guru Tony Robbins has one infomercial that ran continuously in English speaking countries around the world for 18 years. It was literally broadcast 24 hours per day, always available on at least one basic cable channel or over the air broadcast network. Although at much lower volume, that infomercial still runs today. The infomercial sells his flagship “Unleash The Power Within” program, and to this day sales from that program generate $9 million per year in net profit for him.

ControlLetter-1 The power of a control piece cannot be underestimated. Having a solid control, along with a well-defined target market to send or broadcast it to, is almost like an ATM that prints free money.
In 2012, I wrote what would become my direct mail control piece. I affectionately refer to it as the mug shot letter. This letter was the workhorse of my practice, across multiple niche tax resolution markets and a variety of different offers. It worked well for me in the western US, and it’s worked well for coaching clients from Texas to Florida to Chicago in it’s original form. Other practitioners have created heavily modified derivatives that work very well for them, including a CPA in Maine that created a version that has helped take his tax resolution business from just a few thousand dollars in 2013 to over $250,000 in 2015.

Last year, when my postcard sequence to drive people to a webinar wasn’t delivering the results I wanted, I went back to this letter, and results immediately improved.

The obvious question is: Why does this letter work?

Let’s step through it to see why. Tax Resolution Academy® members can download the letter from the tax resolution marketing library.

1. It shows a real human being.

The first thing most … Continue reading

IRS Releases 2015 Collections Data

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Today brings one of my absolute favorite days of the year: The release of the annual IRS Data Book for the preceding fiscal year.

As always, I jump directly to the most precious tidbit in the entire data book: Table 16. If you’re not familiar, this is the table that summarizes IRS Collections enforcement activities for the year.

This year’s table illustrates two key things that are important for you to know from a tax resolution marketing standpoint.

First, the number of open Collections cases continues to increase. FY15 saw a net increase of 961,000 open Collections cases in inventory. As of the end of the fiscal year in September, there were 13.3 million active Collections cases. That means increased tax resolution opportunities for you.

Second, the number of new tax lien filings continues to decrease, a trend we’ve seen continuously for a number of years. In FY15, the IRS filed over 30,000 *fewer* new NTFLs than in FY14. This trend has progressively made tax lien marketing more difficult, in terms of the “low hanging fruit” and decreasing response rates. This means that, while tax lien marketing is getting progressively more difficult every year, you should be getting higher quality clients from the tax lien marketing you are doing. Be more selective, as the IRS obviously is when it comes to filing the liens. Also, you really should be shifting more of your marketing budget to digital marketing.

It should also be noted that levy activity dropped by about a quarter, despite the fact that monies collected actually went up by about $1.3 billion.

Another thing that’s obvious from this year’s report is that the IRS crackdown on unfiled returns is paying off. FY15 ended with almost half a million fewer open delinquent return investigations than in ’14, and the number of new investigations was also substantially lower. I think this tells us that the IRS is relying more on computerized data matching to help close out delinquent return investigations, and those systems are working.

The Offer in Compromise program never has been and never will be your primary tax resolution tool, but practitioners are inevitably curious about it, so I’ll make a brief mention about it here. The number of offers received and accepted didn’t really change (it hardly ever does year to year). However, the amount of revenue collected by the government through the OIC program went up about 14%.… Continue reading

Making a million bucks, by the numbers

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One of the tasks I’ll be embarking on after settling down in Washington state next month is the updating, revision, expansion, and editing of all of my published books. Before the end of the year, I’ll have new editions of each book done.

The first of these to get the update treatment will be my book about building a million dollar taxpayer representation firm. A lot has changed in the 18 months or so since I last revised that particular work, and I need to update it to reflect the ever changing realities of doing tax resolution marketing.

One of those realities is that the cost of client acquisition has gone up a little bit. The primary reason for this has to do with the efficacy of small, cheap postcards. For years, these regular sized postcards were the workhorse of my direct mail lead generation efforts. Today, those same postcards just don’t yield the results they used to.

In general, we’re seeing about 1/4 of the response rate from SIMPLE direct mail compared to what we used to get. By “simple” direct mail, I’m referring to basic postcards and machine addressed letters with postage permits. What’s the reason?

Direct mail is still a great way to generate clients. In fact, since fewer companies use direct mail, there is less clutter in the mailbox to compete against. However, what I think is happening (and this is purely conjecture, by the way) is that mail recipients are more discerning when it comes to sorting there mail — in other words, they are more quick to discard anything that looks like “junk mail”.

My rationale behind this assumption is that dimensional mail and heavily personalized mail are working great. Most readers know by now that I heavily advocate sending 3-letter sequences in sync with the IRS notice cycle following a lien filing, and that these letters should be hand addressed and use real stamps.

Hand addressed? Real stamps? Geesh, that sounds like WORK! And yes…yes it is.

So with that said, what’s it going to take to hit the seven figure mark now?

One of the nice things is that, while marketing costs have increased, so have average fees. In fact, average tax resolution fees nationwide are up nearly $1,000 since I last wrote about this topic here on the blog over two years ago.

Assuming an average fee of $3,500 per client, we need 286 … Continue reading