This is my 40th year in the tax business. I built one business and sold it to one of the national companies in 1995, worked for them for 5 years due to a non-compete agreement, and then bought a business from a friend who was retiring in 2001.
Over my years in business I hate to think of the many thousands of dollars I have wasted on marketing and advertising. I could write a book. At the same time that I was wasting that money, however, I was learning the hard way how to make my marketing more effective. I’ll share a few things I learned and provide a couple of successful strategies I have used.
The first and most important thing in building your business is to ask yourself this question, “What do I offer that makes me so different from the others out there; so much different that a new client would want to come to me instead of the others?” Unless one can provide a compelling answer to that question, one will ALWAYS have difficulty building a business. The experts in this business call that a “Unique Selling Proposition” or a USP. What makes you different from all the rest?
It is not enough to make generic statements such as “I am better” or” I am cheaper”. USP’s are always very specific and must scream to the world in no uncertain terms, “This is why you should absolutely choose my business”.
Once you determine your USP, then and only then, should you think about how you are going to market your business.
It is my belief that all of the traditional means of advertising are pretty much a waste of money. I include in that newspapers, radio, TV, billboards, yellow pages and so on. As many have said long before me, the best results come from referrals. So I would recommend spending you time, efforts, and funds in finding ways to increase referrals. So the question becomes, “How do I get people talking about me in such a way that it will make others want to come to me?”
Another important principal in marketing is to think of the lifetime value of the client instead of just what the client pays just the first year. I assume you’re in this for the long haul, so think of advertising expenditures and result for the long haul. For example, I have heard business owners say many times that they quit advertising in a certain way because it only brought in twice what they paid for the advertising. In my opinion, for a tax business getting $2 for every $1 you spend would be fantastic results. I’ll even go further, I’m not even particularly unhappy when advertising brings in $1 for every $1 I spend. Obviously, this is only appropriate for those who expect that client to stick around for the next 5, 10, 15, 20 years or so. Furthermore, a mature business could not and should not consider a $1 to $1 ratio, but what does a growing business have to lose?
The point here is to not be so guilty of short term thinking that you lose the opportunity to build your business.
Here are a couple of ideas for developing referrals:
1. Many years ago, I purchased 500 magnetic 6″ rulers imprinted with my name on them. They cost 37 cents each for a total of $185. That was over 20 years ago and they are still on refrigerator doors and I still get referrals from them even though the phone number was disconnected in 1995 when I sold my business!
This year I finally bought 2000 more, this time in full color, this time with a current phone number.
These things paid for themselves in the very first year and have paid for themselves many times over and over as the years have gone by.
These work because people are constantly in and out of their friends kitchens. They see the ruler. They read the Unique Selling Proposition. They ask their friend about it and then you get a referral.
Some people have said to me that they thought they would just get a magnetic business card. Certainly that would work but a ruler is more likely to be kept since it is something they can use, as opposed to a business card that is just advertising. Further the cost really is not that much different. You can see a copy of my ruler here: https://heritagetax.com/wp-content/uploads/2012/03/Ruler.jpg
2. The main benefit to the next is that it will increase referrals by getting people talking about your business. But it can also be used for generating interest with other prospects as well. The best part is that it is dirt cheap. We have used it very successfully for at least nine years.
I work with a local Chick-fil-A restaurant to give away totally FREE Chick-fil-A sandwiches to my clients. No purchase is required by the client. Clients would normally have to pay $3.09 for the sandwich and, at least around here, everybody loves them. If they have a Chick-fil-A in your area, it is an incredibly inexpensive way to create significant goodwill and get your clients to talking about you.
While it may be different from franchise to franchise, my local Chick-fil-A only makes me pay for the cost of printing the coupons. Since they are custom printed, I have my own business information printed on them as well as the Chick-fil-A coupon. Even this cost is not as much as it might otherwise be because they have already pre-printed the back in 2 colors in large volume. The cost for me has worked out to only about a nickel per coupon. That creates some dirt cheap goodwill. I usually give away about 4000 coupons per year.
I not only give them to clients but I go around to nearby businesses and ask if I can give them to their employees. I attach a small flyer to them with a coupon for my services. I also go to the nearby nursing homes and give one to every employee with the same coupon attached. At a nickel apiece, I can afford to be pretty free with how I give them away. They really do create incredible goodwill.
The only negative is that the clients have now come to expect them.
Incidentally, if there is not a Chick-fil-A in your area, I suspect one of the other sandwich chains might work out a similar deal with you. It benefits them by bringing traffic into their business and that traffic will usually buy a drink and fries to go with their FREE sandwich.
You can see a copy of my Chick-fil-A coupon here: https://heritagetax.com/wp-content/uploads/2012/03/Chick-fil-A-Coupon.pdf
I also want to stress the importance of having a website. Our website has become one of our biggest and most cost effective sources of new business. One problem with a website is that you must be careful not to waste a lot of money. There are companies out there who would have you spending thousands just on your website and still not provide you with much of a product. In fact, about the minimum I ever see quoted anywhere is around $50 per month.
We only spent about $400 developing our website initially and the ongoing cost is only about $50 per YEAR + plus whatever I may decide to spend on minor modifications. Our total spending on the website for ALL of 2012 was less than $100.
In spite of low spending, we get constant positive feedback from both old and new clients about how much they like our website.
You can view our website at www.HeritageTax.com. Actually, you’re on my website right now.
The point here is – “DON’T GET CAUGHT UP IN ALL THE SALES PITCHES SO THAT YOU OVERSPEND ON A WEBSITE!”
Finally, I will tell you about a new program I have just instituted so I cannot provide results yet. There is a small Mom & Pop restaurant just a couple of doors down from my office. There were using menus they typed up on standard 8.5” X 11” plain paper and took to a copy shop to have black and white copies made. These didn’t look attractive at all and quickly started looking even worse as things got spilled on them. I asked them if I could furnish some nice color menus in exchange for placing my ad on the menu. Since this saved them copying cost, they immediately agreed. I added a little stock clip art and used a lot of color and printed them in color on heavier paper. Finally, I purchased some nice professional menu covers to keep them clean. The restaurant owner LOVED them. My total cost was less than $100 and that will keep my ad in their restaurant for at least a year. Will it work? That is yet to be seen, but even if it only brings me one new customer, it has been worth it.
Well, those are just a few of my thoughts. I hope they may be of value.
