A black hole can draw things into itself, and items that enter the black hole can seem forgotten forever — especially if it’s the middle of tax season.
You may lead your own firm, and you may know where each client’s tax files are in your office. But, if you are honest, it’s common to leave a client hanging when they’ve brought you their tax information, causing them to wonder when they will ever hear about their return again. Almost every firm experiences this service conundrum.
Clients can experience the ‘black hole’ phenomenon when they drop off their tax information and seem to never hear from the firm again. It gets sucked into the firm’s processes, and the business of tax season eliminates the communication clients thrive on. The black hole unknowingly hurts many firms from helping clients receive the care and attention they are willing to pay for. It’s like telling the dentist that it hurts to have a root canal, and the dentist disagrees with you because they are performing the root canal, not experiencing it.
Firm owners overlook the confusion of the black hole experience their clients feel simply because the firm owners aren’t the ones experiencing it. But it is truly a pain for most clients of professional tax preparers.
Here are some insights that can guide you through eliminating the black hole of professional tax preparation services:
- The more technical members of the firm should be explaining and reviewing tax info, not preparing returns. This can free up the more technical members to lead in the communication that can eliminate the black hole effect.
- Simply sharing updates with a client on a weekly basis throughout the process can drive such value that firms could price their service experience higher if they could figure out how to do this.
- Prepare fewer returns by focusing on particular types of returns, or particular types of clients. Less returns will create space to increase your value (and thus your price) and serve clients better.
- Humans make up stories about their life to make sense of their world. So, when they experience the black hole, it causes anxiety, frustration, and a poor experience they wonder why they pay for each year. Some clients leave firms because of the stories they tell themselves.
- Tax returns aren’t the product you sell. You sell an experience. The experience is helping a human navigate the complex tax laws and feeling comfortable that you have done the best job possible to eliminate the client’s fear around this confusing requirement in their lives.
Here is a mock experiment to help you see the value in eliminating the black hole experience of most clients. For next tax season, offer a new experience with three different options for clients to choose from:
- Highest option: 50% higher than the client’s prior year tax fee. Guarantee that they will receive an update every week at the same time on the status of their return with a personal explanation of their tax results when the return is complete.
- Middle option: 33% higher than the client’s prior year tax fee. The client will receive an update on the status of their tax return when it has gone to the review phase of the process (theoretically, the middle point of the process), with a personal explanation of their tax results when the return is complete.
- Lowest option: for the same price as the client’s prior year tax fee, with no updates on the progress of the preparation, and only a pick-up option when the return is complete.
You may not choose to offer these options, but if you did you would be surprised how many would pick the highest option. It’s really just an experiment to highlight the fact that clients are willing to pay for more value if you are creative enough to offer more of what the client wants. And our profession is ripe to capture this value since most firm experiences are all the same. If you offer the above three options to a new client, they would be blown away as to how starkly different your firm was from the last firm they worked with.
Of course, offering new value to clients means you have to implement new processes to do what you said you would when you made the offer. But clients paying your firm more funds the changes to the team, the addition of new necessary software, and potentially disruptive tweaks to your business model to support the new higher offering. This is exactly where you want to be; in the place where clients expect more from their firm, and are willing to pay for it.
What new value are you NOT being paid for by allowing your clients to experience the common black hole of professional tax preparation? There are clients willing to give you more money to take this pain away. You just have to offer it to them.