H&R Block Promotes Financial Services

H&R Block, Kansas City, MO, this week launched a $100 million integrated marketing campaign, including $7 million for direct mail, to tout its expanded financial services capability beyond the reputation built in mass-market tax preparation.

And although the company has a history of using direct mail to communicate with its customers, the new effort via Wunderman Cato Johnson, Chicago, the direct marketing division of Young & Rubicam Inc., is more elaborate and customized than any previous one.

“We’ve done fairly traditional direct marketing in the past,” said David Byers, senior vice president and chief marketing officer at H&R Block.

WCJ formed a significant segmentation analysis to identify Block’s most profitable customers and developed specific, targeted messages to existing customers.

“H&R Block has identified eight different customer segments in the past two years,” said Ellen O’Connor, account supervisor at WCJ. “This is the first year we’re incorporating that segmentation data and using it to guide us in versioning our direct mail copy to include copy that’s more relevant to each segment. It gives us a way to really go after our most profitable customers and aggressively retain the ones that have the most value potential.”

The 12.5 million-piece direct mail package, which focuses primarily on retention of H&R Block’s existing customers and upselling other financial services to them, will work with more than 20 newly created TV spots through its general advertising agency, Y&R. The TV spots debuted last week, along with radio, print and outdoor advertising. H&R Block’s U.S. database includes 16 million customers; worldwide that number is just less than 20 million.

The 5-by-7 mailing piece, which includes a letter, brochure, lift note and, in some cases, a discount coupon for tax preparation services, is encased in a shiny red Mylar envelope.

H&R Block made these announcements in an aggressive marketing splash that includes opening 94 new H&R Block retail financial centers, the launch of www.hrblock.com, its redesigned Web site and the introduction of Refund Rewards, a refund option. Agreements made with retail partners, including Sears, Roebuck & Co.; General Motors; and Northwest Airlines, offer discounts to consumers who use that option.

The 45-year-old company also established 1-800-HRBLOCK, a call center to support its new range of mortgage, investment and insurance services. Wunderman Cato Johnson, New York, which has specific expertise in teleservices, was instrumental in setting up the call center in Kansas City.

In addition to the retention strategy, the mail effort targets about 3 million new prospects. “[The acquisition portion] is significantly scaled back from the past,” O’Connor said.

The mailing is divided into five stages, staggered to drop about every other week until the end of February. It has been timed, where possible, to coincide with customers’ anniversary dates, since customers have been historically consistent in filing tax returns around the same date every year. “We used the database information to target the arrival date of the direct mail piece to be approximately two to three weeks prior to the anniversary date of the customer’s tax preparation from the prior years,” O’Connor said.

Advertising will continue throughout the year to support the company’s new services. “We’ve announced that we’re moving from a seasonal tax services business to a year-round financial services company,” said Byers. “This is not business as usual.”

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