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Follow up marketing to your prospect database

To put it bluntly, if you’re not actively marketing to your prospect database on a regular basis, then you wasted the money you spent to obtain those prospects in the first place.

One amazing fact has held true in the sales world for nearly a century: The majority of sales are closed after the 5th contact with a prospect. This fact holds true for any industry, and the number of contacts required to close a sale increases as the price point of the product or service increases.

What does this mean for your prospect database? It means that you should have an automated, pre-set follow up sequence that your prospects get entered into. This follow up sequence should last for an absolute minimum of three months, although 6 months to a year is ideal.

Who gets assigned to this follow up campaign? A legitimate prospect is anybody that has:

personally met with you been given a telephone consultation requested information, such as a special report, from you visited your web site or called you

Basically, I consider a prospect to be anybody that has taken some action to express interest in tax services.

Has mentioned earlier, these prospects deserve special marketing attention. If they have requested information from you via the web, you should always at least request their email address and add them to …
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Setting Expectations: How much does a customer cost to acquire?

If you ask 99.9% of American small business owners how much they spend to acquire a customer, they’ll either give you a blank look or simply tell you how much they spend on marketing. Knowing your cost to acquire an individual customer is one of the most fundamental business metrics that anybody operating a business should be able to tell you off the top of their head.

The cost to acquire a client is of particular importance to those of us that are professional practitioners. Why? Because a client for us isn’t a one-off transaction. Once we acquire a client, our objective is to keep that client for life, which means that client is providing us with revenue for years on end. There’s a metric for this, also: Lifetime Customer Value.

We are fortunate to be in a business where the investment we make to acquire a client can be quite large, since the payback to us in revenue is quite large, often from the very first transaction. Let’s run some numbers…

Let’s say we send 1,000 postcards to tax lien debtors. These are raw liens, in no way previously contacted by us. Our goal is to convert as many of these 1,000 tax liens into prospects that have actually contacted us.

Out of these 1,000 postcards, let’s say we get a below-average response rate …
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Why one-shot direct mail is marketing suicide

Here’s how most people do marketing, particularly their direct mail.

They get a list, such as our tax lien lists. They print a flyer, brochure, postcard, coupon, etc. They send it to this list ONCE. Then, no matter what happens, good, bad, or ugly, they never touch this list again.

I received an email last week from a reader saying that direct mail doesn’t work. He went on to explain that last year, he had obtained 2,000 tax liens from us, then sent them all a letter. He got ZERO responses.

For one, getting absolutely zero responses out of 2,000 letters definitely tells me there was something wrong with whatever he sent them (which I happily would have critiqued for him at no cost if he had attached a copy to his email). But secondly, the biggest problem was that he only sent them something ONCE. It simply doesn’t work like that. You can’t send something to a group of people one time and one time only and then say, “Direct mail doesn’t work.” Direct mail DOES work…you’re just doing it wrong (sorry to be blunt, but the truth hurts sometimes).

Woody Allen is quoted as saying that “80% of success is showing up”. This is just as true for marketing as it is for performing artists. Statistically speaking, study after study shows that …
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Closing the sale and getting paid

Closing: The very word strikes fear into the mightiest of professional tax slayers.

The problem is that it doesn’t have to. If done properly, as part of your overall needs-based selling strategy, closing isn’t so much a distinct step of a sales process as it is a natural conclusion to the entire meeting.

I have met far too many tax resolution closers (unlicensed sales staff) that simply believe that the key to closing a sale is to pound the prospect into submission. While this technique does sell a couple hundred million dollars worth of client services each within the tax resolution industry, it is also the type of practice that garners unwanted attention from people such as the Federal Trade Commission and your state attorney general. Just ask Roni Deutch and Patrick Cox (of TaxMasters) if it was worth it.

The reality is that any client gained by coercion will forever resent you for it. Sales tactics like this are where BBB complaints, FTC investigations, lawsuits, and increased legislative regulation of our entire industry all stem from.

So what do you do instead?

Like I said, if you’ve done proper need analysis, layed out a solution with strong benefits to the prospect, the sale basically closes itself. Instead of needing to use a “tactic” or a “line” to close the sale, it simply becomes a …
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Offering real solutions that benefit your tax prospects

A tax debt always has an underlying cause. Through your Q&A session, you were able to identify that cause. It’s not uncommon for it to be something that is difficult for the prospect to talk about, especially when there is a family member involved. As a tax professional, once you understand the real problem, you are already several steps ahead of your prospect in regards to solutions. In most cases, your solution is going to consist of three components:

1. Fix the underlying problem. 2. Get into current compliance with tax laws. 3. Fix the tax debt.

Fixing the underlying problem is actually the most difficult. If it’s a family owned business and one employee/family member is embezzling money, that employee needs to be fired immediately and legal action taken in order to create a reasonable cause basis with the IRS. If the family is unwilling to take these measures, then there is actually very little lasting recourse for resolving the tax liability. If the problem is a complete lack of a bookkeeping system, then this can be easily remedied.

This starts to create what I call the problem -> solution-> benefit sales chain. Here is how that works:

1. With a thorough understanding of the prospect’s problem, you can now repeat the problem back to the prospect in a summarized form: “Based on what …
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You don’t get paid until you close a tax service sale

None of us want to think about it, let alone admit it, but each and every one of us is a salesperson. If you are professional service provider, then you must first sell your services to a new client before you can ever put on your CPA, EA, or attorney hat.

This is why I always say that that most successful tax professionals study marketing and sales just as much, if not more, than they study their actual profession. Your Masters in Taxation or your LLM Tax is all and good, but to be quite honest, it doesn’t matter one bit if you’re in private practice and a high school dropout is outmarketing and outselling you. And yes, this happens. In fact, it could be happening to you without you realizing this.

This week I’m going to be talking about sales every day. We talk a lot about marketing to generate leads, and marketing to those leads over time to build a relationship with your prospects. But this week we’re going to delve into what happens after they actually come to visit you or they contact you on the phone.

Due to the fact that I consider tax resolution services to be the most difficult thing to sell within the tax and accounting sphere, I’ll be using that as the example.

There are dozens of …
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Expanded OIC Criteria Create Incredible Marketing Opportunity

Just in case you don’t keep up with IRS regulatory changes on a day to day basis, yesterday was a momentous day. After 15 years, the IRS finally fixed the single greatest problem with the Offer in Compromise program, and reduced the remaining income multiplier from 48 or 60 down to 12 or 24 when calculating the Reasonable Collection Potential (RCP).

In addition, the IRS is now allowing Federal student loan payments and delinquent state and local taxes as an allowable expense, and has expanded the national standards under the miscellaneous category to allow room for minimum credit card payments.

What does this mean for you? It creates an incredible marketing opportunity, as the minimum acceptable Offer amount for prospective clients just dropped by as much as 80%. This will drastically increase the number of people that can (and will) file processable Offers.

In particular, I see this as an opportunity to tackle two distinct target markets:

1. High dollar Trust Fund Recovery Penalty (IRC 6672) cases, particularly those with lien amounts between about $100,000 and $250,000. 2. Mid-range 1040 debtors (those that owe approximately $15,000 to $50,000) that have traditionally been blocked from the Offer program because of the remaining income multiplier.

This kind of marketing opportunity has been handed to us on a silver platter by the IRS approximately once per year for …
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Why Are There Only X Number of Liens For My Criteria Available?

We get a lot of questions pertaining to why only so many leads are available for a given set of selection criteria. This is a very good question, and I will attempt to answer it here.

First and foremost, one must understand that liens are a finite resource. In other words, there are only a limited number of them. In 2010, the IRS filed 1.1 million Notices of Federal Tax Lien (NFTL). The vast majority of these liens were against individuals owing less than $10,000.

In Fiscal Year 2012, the IRS only filed 707,000 tax liens. That’s for the entire United States.

In 2013, the IRS only filed 602,005 tax liens.

So, the number of lien filings is going down. As of March 2012, the IRS changed the threshold for filing a lien, raising it from $5,000 to $10,000. Anybody with a lien filing less than that amount is a repeat offender, and is pyramiding their tax debt liability.

Let’s go back to that 707,000 liens filed in 2012. Keep in mind that, under most circumstances, we don’t collect lien data on liens less than $5,000. Therefore, those smaller liens won’t even be in our system, and those liens (for repeat offenders that are growing their tax debt) are usually only a couple thousand dollars.

Last year (2012), we collected data on about 250,000 federal …
» Continue Reading: Why Are There Only X Number of Liens For My Criteria Available?

Transferring Telephone Sales Calls To Closers

Some tax resolution organizations will choose to use a sales model in which a team of 3 or 4 telemarketers are making the initial contact with tax debtors, and then transferring the calls of people that are actually interested to a sales closer or the licensed person on staff. This is a highly efficient sales model that ensures that the closer or licensed person is only talking to interested people and doing actual consultations, making better use of their time. The telemarketers in this case can be minimum wage employees with some sort of bonus/commission structure for sales made, or even just straight hourly.

Transfers to the closer or licensed professional can be handled one of two ways. The first way is to transfer the call LIVE, which is often more effective. The other option is to have the telemarketer set telephone consultation appointments for the closer. The latter method is often preferential for very small firms and solo practitioners. In the case of a solo practitioner operating only in their local area, these appointments can be physical, in-office appointments to discuss the tax problem, and the telemarketer must screen the prospect using a set of questions developed for that purpose, to ensure that the licensed professional can actually help them and their time is being used most efficiently.

Live Transfers

The transfer from Opener …
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JK Harris Closes Doors, Creates Market Opportunity

The largest tax resolution firm in the United States, JK Harris, has closed it’s doors.

They had filed for Chapter 11 protection back in October, but their largest creditor opposed the reorganization plan, and seized assets on Friday.

What does this mean for you? With the single largest national competitor gone, there is suddenly a tremendous vacuum in the tax resolution marketplace. You, as a local tax professional, can step in to fill that void.

JK Harris had thousands of clients across the country, and those clients are suddenly left without any representation. that means now is a great time to step up your marketing and take advantage of the situation.