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Increasing the Utility of Your Federal Tax Lien Lists

Federal tax lien lists are useful for a variety of lead generation purposes. However, far too many firms use these lists for only limited purposes. This article will explore several methods for increasing the utility of those tax lien lists you have.

First, make sure that you are running all tax liens through the National Change of Address (NCOA) database. Numerous companies provide this service, just do a Google search to find one. You can also obtain this service through a local direct mail service provider or list broker in your area, if you prefer to do business with local companies.

Not only is NCOA processing required by the US Postal Service, you’ll discover that it also reduces your returned mail volume substantially. Tax liens are, by definition, filed against companies and individuals that owe money to the government. Chances are, they also owe money to other organizations. As such, it is not uncommon for the businesses to close, and individuals to move. It’s simply the nature of the beast. Since tax liens are filed using the last known address, this is what goes into our database. Returned mail volumes of 15% to 30% are not uncommon when doing mailings to tax lien lists that have not been NCOA processed.

Second, if you are doing telemarketing, run the lists through a telephone data hygiene service …
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Using Federal Tax Lien Leads To Get New Clients

Ever since the launch of this web site, I have had telephone and email conversations with literally hundreds of tax professionals – CPAs, Enrolled Agents, and tax attorneys – and by far the single most common question I am asked is this: How do I use Federal tax lien data for finding new clients?

Since this question comes up so frequently (literally several times every single day), I have put together this marketing tutorial to show you how to use tax lien leads for obtaining new clients.

The Big Picture Idea

There are a couple of core concepts I want to cover before we get into the nitty-gritty how to portion of this tutorial.

First, as a tax practitioner (or any professional service provider, for that matter), you need to realize one very important, fundamental concept: You are a CPA, tax attorney, or Enrolled Agent SECOND, and a sales and marketing professional FIRST. This is a very radical concept to most people, no matter what their line of work. But the bottom line reality is that if you are in a small firm or in private practice, then you need CLIENTS in order to pay the rent and put food on the table. In order to get clients, you have to do marketing (word of mouth and referrals are still “doing marketing”) and be a …
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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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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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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.

Update on Individual (1040) Lien Leads

For those of you that specialize in assisting individual taxpayers instead of businesses, you may have noticed some recent upsets in the leads world. Due to increasing regulation and pressure from the Federal Trade Commission, it’s getting harder and harder to access individual taxpayers through the telephone. One of the largest list brokers in the country recently quit offering tax liens at all due to these issues.

Here at Tax Liens HQ, we are still offering 1040 tax lien leads, but we recently made the decision to no longer offer phone numbers on those leads, and I’d like to explain why that is and what your options are instead.

If you are calling individual consumers at all, the FTC requires that you have what is called a SAN number. This is a subscription number to the national Do Not Call list registry. Even if you purchase phone numbers from a list broker, you are still required to have your own SAN number and remove numbers from your list that are on the Do Not Call List, even if the list broker says they do it for you.

Subscribing to the Do Not Call list is not inconsequential. A SAN number that covers the entire United States costs around $15,000. However, this is nothing compared to the FTC fines for telemarketing to consumers without a SAN …
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Marketing Expectations & Metrics

When a tax professional first enters the world of lists, dials, prospecting, return rates, disconnected numbers, and the like, they are often confused and dismayed by the results. Setting realistic expectations for your results as a marketer is very important to do, but also one of the most difficult concepts for new marketers to grasp.

Let’s begin with direct mail. If you send out a mailing, any mailing, and receive a response rate of 2%, you are kicking butt! If you hit 1%, you’re still doing really well. In the tax resolution sector, breaking 1/2 of 1% is a good target to shoot for. Once you have a mailing piece that can hit that rate, then you have something to tweak.

Before becoming shocked or dismayed at such “low” numbers, bear in mind that these exact number levels have generated billions and billions of dollars in sales for all kinds of products and services from direct mail over the past several decades.

Now let’s look at telemarketing. We are proud to have the most robust telephone number system that we can, combining the best of both automated AND manual phone number lookup and verification. However, the reality is that phone numbers are constantly changing, people move every day, and companies go out of business every single day. In telemarketing, regardless of list source or target …
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