Do you lose tax preparation clients each year?
Some tax offices experience a higher rate of client turnover than others. Depending upon your target market, business model, and fee structure, your turnover rate can vary quite widely. There are offices out there that experience turn rates in excess of 20%. For some of you reading this, that might sound insane. For some others reading this, you might love to have the problem of “only” experiencing 20% client turnover.
Never forget that acquiring a NEW client is the most expensive thing you can do in terms of marketing your professional tax services. While marketing to acquire new clients is definitely my primary focus on this blog, never forget that it’s far easier to obtain future revenue from current and past clients.
If you don’t have an active client retention marketing program, then you’re committing a cardinal sin of running a business. You should never simply expect your clients to keep coming back year after year, especially if you are only in contact with them once per year.
But even if you have an active client retention marketing program, you’re still going to lose clients. It’s inevitable that you’ll have some turnover rate, no matter how small. Since those clients have already developed some sort of working relationship with you in the past, however, it’s easier to win those clients back than it is to obtain a brand new client.
As we enter the holiday season, most service businesses literally give up on marketing. They incorrectly think that people are 100% focused on the holiday season. The reality is that they are still living there lives, and plenty of other things are going on that are reminding them about the upcoming tax season. For example, open enrollment for the health care exchanges is right around the corner (Nov. 15), and this is on the mind’s of some folks. For others, last week’s mid-term elections and the shake up in the Senate has others concerned — and tax provisions may be among those concerns. Also, the mass media is doing us all a favor by reminding people about tax extenders and the potential for delays in the filing season.
Even without all this going on, you should still have an annual Lost Client Reactivation Campaign. Basically, go through your tax office CRM system (you do have one, right?) or through your old return files and look for those people that didn’t come back in 2014. Make a list, check it twice, and let’s get some of them back.
Before I delve into the mechanics of your Lost Client Reactivation Campaign, I want you to consider the value of each of those clients. What is your average tax prep fee? You should be willing to pay that amount, or more, in order to acquire a client.
Why should you be willing to invest so much to acquire a client? Because that client should not just represent one year’s worth of tax prep revenue. You need to think about the future revenue value of that client. What are they going to spend with you over the course of five, ten, or 20 years? What is the value of that one client when it comes time to sell your practice?
The lost client you gain back this year isn’t just worth $200 or $300. Nay, nay. That client is worth THOUSANDS of dollars to you over the course of your working relationship with them. For some clients, it could be in the tens of thousands of dollars.
Enough of my rambling, here’s what you’re really reading this for…
Tax Season Lost Client Reactivation Marketing Campaign
From CRM software or via manual review of past returns, compile list of clients from the past that did not return in 2014. Go back at least 3 years, but optimally to the beginning of your practice. Mail all contacts a …