The Truth About Tax Resolution Fees

Within the tax resolution industry, there are a variety of fee models that you should be aware of. Different fee models have different potentials for abuse by the firm offering the services, and it is important to do your due diligence and fully understand what you are paying for, how much, and when, before ever paying a single dime to a tax resolution firm.

One of the most common fee models is a retainer model, which is a carryover from the world of legal and CPA firms from which many tax practitioners come. Under this model, you pay an up front amount, which the firm holds on to and then bills against on an hourly basis. Close to the time when the retainer is all used up, you will  get a bill showing what was done, how long it took, and the hourly rate it was billed at. This bill will usually also include a request for additional retainer. The key thing to remember here is that if you don’t keep paying, they don’t keep working.

If you’ve been researching particular companies online, you may already have come across BBB, forum, Attorney General, and other complaints against some firms that aggressively bill down retainers, and are constantly asking their clients for more money, without making much significant progress on a client’s actual tax case. It is important that you thoroughly vet a company before giving them money, in order to avoid becoming another victim of a devious company.

Another common fee model is a flat fee-for-service model. This fee model has a large number of variations, from a flat fee for a specific package of quoted services, to a “menu of services” model where each service you can order off the menu has a specific fee. This latter method is very akin to the most common pricing model used in tax return preparation, where each specific tax form has a particular fee for preparing it. You’ll see this fee model used at many CPA firms and most retail tax preparation outlets.

When you are speaking with any tax firm regarding a package of services, it is very, very important that you understand exactly what services you are being quoted for, and what the company’s policy is regarding fees for additional services. When it comes to tax matters, it is not uncommon for additional services to be required, which will require additional fees if they are … Continue reading

Close more tax resolution sales today

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.

… 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