H&R Block Hopes New Services And Tactics Will Pay ReturnsOne of the few companies looking forward to the tax season, H&R Block Inc. next month will launch its first affiliate program and e-mail marketing efforts for customer acquisition and retention.
Meant to introduce the company's new offerings at www.hrblock.com, which relaunches this week with a new look and feel, the marketing tactics will kick off just as taxpayers receive their W-2 forms Jan. 31.
"These programs are really designed to create awareness and trial in the new category of services and, basically, we're targeting Middle America and consumers that are interested in financial services or have a strong interest in hearing about financial services," said Pat Crorkin, assistant vice president of e-commerce at Block, Kansas City, MO.
The new services are an extension of Block's offerings, and integrate its offline and online channels. Last year, the firm allowed consumers to prepare and file their own taxes online for $19.95, including federal and state returns.
This year, consumers can opt for the professional preparation option. Accountants from more than 9,000 Block offices nationwide will complete tax filing online for a fixed fee of $99.95, including federal and state returns.
Consumers who file their own tax returns at hrblock.com but still have doubts about whether they included all the deductions can have their form reviewed and returned by a Block accountant for an extra $29.95 over the standard $19.95 fee for self-preparation.
And do-it-yourselfers at hrblock.com can clear their doubts with Block under the Ask a Tax Advisor service for a fixed fee of $19.95 per solution.
Getting the word out on these expanded services in a cost-effective manner is critical for Block. The affiliate program, brokered by LinkShare, New York, is a distribution deal, while the e-mails are a direct-to-consumer effort.
Crorkin said Block expects more than 10,000 affiliated Web sites to market the tax preparation and financial services firm's products. Affiliates include iwon.com, Pharmore.com, LookSmart.com, AllAdvantage.com, RealNames.com, Spedia.com and SchoolCash.com.
Ranging from online brokerages to mom-and-pop sites, these affiliates will be paid a percentage of the business they generate.
"Our best guess, and we're being conservative, is that they're going to drive roughly 10 percent of our overall traffic," Crorkin said, adding that this will translate to anywhere from "500,000 to 1 million visitors."
Last year, nearly 215,000 taxpayers filed returns at hrblock.com - the first time Block accepted forms online. Overall, an estimated 2 million U. S. residents filed taxes online last year, up from 400,000 in 1999.
Projections for this year are for 3 million to 5 million online tax filers, in line with the Internal Revenue Service's objectives to migrate most tax return filing electronically.
Aware that retaining existing customers is much cheaper and more lucrative than acquiring new ones, Block soon will e-mail the 215,000 people who last year filed returns online.
This group, along with an unspecified number of consumers that registered to receive news from hrblock.com, soon will receive invitations to try out the new offerings and again file returns online.
E-mails will coincide with the W-2's mailing to taxpayers and as the April 15 filing deadline looms. During this time, Block will test various unspecified online promotions and offers. Block's monthly e-mail newsletter, e-wire, will support this push.
Block, however, has put its e-mail retention account under review, with incumbent BigFoot Interactive participating.
"In the past we've looked at e-mail as an e-commerce effort, and we're really trying to expand that to cover the enterprise," said Kim Verhoeven, manager of e-commerce marketing at Block. "We're looking at several different vendors and trying to make a decision in terms of who can really provide the services for the enterprise."
In another first, Block soon will rent outside lists to acquire new customers. The profile matches Block's online target: consumers that have opted in, have transacted online and are open to buying financial services on the Internet.
"This is for our programs that are launching in the next couple of weeks," Crorkin said.
Block is in final negotiations with a list broker whose name Crorkin or Verhoeven would not specify.
But while the $2.4 billion Block is the offline market leader in tax filings, online it still trails Intuit, whose Turbo Tax online software accounts for three-fourths of all tax returns filed on the Internet.
Block hopes to increase its market share with its new suite of online offerings that is supported by aggressive online marketing activity. And Block stores are more of an asset than a liability, with no rivalry between channels, according to the company.
"We believe our strategy of integrating our clicks-and-mortar initiatives or products and services is the right one for us," Crorkin said, "and we don't believe anybody, including Intuit, is going to be able to match that. Intuit is a software company. They don't have the physical retail network of experienced professionals that we do."