Yesterday dividend announcement. Today interim results announcement. We'll see how this is going. Stock has rebounded over 40% from low and been positive the last week or so. I'm sure many, many free returns but we'll see revenue number s also.
Florida, I'm more than happy to hear you had a winning experience with a free return.
My 30+ years in this business tells me clients will return if the price is right. NO matter what marketing tool is used, it's all about clients believing they got the best product at the best price.
Your experience differs from most Liberty franchisees. Let me offer an anecdotal example. I donated a free tax return gift certificate for a silent auction at a local private school. A local doctor donated $20 to get the certificate. He's been my client for 7 years and I'm more than happy not to have been paid that first year.
None of this has anything to do with Liberty free return program, the workings of which I don't intend to discuss here. But it does work if it is done properly. It is nothing like Block's 1040EZ program this year, which I don't believe will help them in the long run. But if it does, I'll copy it and improve on it and be happy!
Certainly for this year the goal was to get 'numbers' in the door. As for advertising during peak that is the 'season'. If you wait to March, that is too late. Probably 95% of the EZ are gone by then. They'll just have to see down the road how many become payers. I think they WILL give it a serious commitment by continuing in the next few years and maybe longer than that
Free has to be done correctly to work.
Many free promotions are very tough to transition into a paid return. I think HRB will have trouble monetizing the EZ free program and probably generated some ill will with people who were disappointed they didn't qualify.
I have seen business increase due to free returns but it usually takes a year or two for it to happen. It is only a small percentage that return to being a paid return.
Free is used in a lot of online programs because the cost to deliver is so small. Monetizing it to get a nice ROI is not that hard to do.
I was pretty shocked to see them spend so much time advertising it during peak season. I can understand during March when things are slow and you are looking to find a few extra returns to keep people busy.
During peak when it competes directly with your paying customers? While they may truly be taking the longer term approach here most public companies look 1Qtr out at the most. To think in terms of 2 to 3 tax filling seasons to see results will take some serious commitment to the program.
It appears to have met one criteria which was to stop decrease in returns.
Now to see if that actually translated into current year revenue and future year results as well.
Free returns for family and friends, and tax payers’ dependents, and a few working seniors who don't have to file, but qualify for the Make Work Pay Credit is a lot of labor cost with zero income. Had a young man in this week, needing his 2009 done to get his $80 withholdings back. I charged him $10. He came back for me to do his 2010.
He KNEW he had a 1040EZ and he knew Block was doing them for free.
I think what frightens me the most is FREE seldom has value. People love FREE stuff; it’s why sales of buy one get one free are such a success.
During our first year of business, we had a radio DJ in front of store, while we handed out free hot dogs and soda. One lady drove up in an expensive SUV, let 3 kids out of the car to get food and drink, never shutting the car off. The kids climbed back into the car with their little hands full, and she drove off. I think we fed a lot of homeless people that day. Some stood around actually asking a tax question, while they ate, and never entered the store.
Clients who wanted their tax return done did not stop for the free stuff.
It was an eye opening for us. We never did that again.
The 2nd year we gave certificates to a radio station, where people could call in and get a free return at our office. NOT one of them came back the following year.
Again we learned our lesson.
I think about my own shopping habits. If I get an item on sale, the next time I shop and it’s NOT on sale, I’ll wait till it’s on sale again, because I know it will be. I easily change brands to take advantage of sales. Palmolive or Dawn, what’s on sale? What do I have a coupon for? Both good products that do the same job.
I’m beginning to think Block shot themselves in the foot with the freebie. Next year these folks will look for free again. It’s human nature!
What I am REALLY not understanding is why you are putting so much importance on what I am saying. I am not a company spokesperson. I am not posting FACTS that need to be defended. I am not trying to spin ANYTHING. If I am inconsistant or change my mind, or observe different things--SO WHAT! . All I was doing was posting some observations and opinions and hoping others would post likewise. I was hoping people would say-'I observed this and my opinion is that'. If it is the same or the exact opposite- great. So we could discuss them. JUST for the sake of discussion OF THE TOPIC. But instead you cut and paste my words and try to analyze me and instead of the topic. So basically I have been unsuccessful in this attempt. No matter how I try to articulate this you go back and cut and paste some comment to 'prove' otherwise. Of course I am not the list monitor and you can post whatever you want. But SOMEHOW once again I am trying to explain the nature of my posts.
So I said Block would report it as being a success. And You said that Block would report it as being a success. So that sounds the same to me. And then Block comes out and reports it as being a success. Yes we are doing a lot of free returns. Block wants to do a lot of free returns so now they can report that as being a success.
Blocks stated goal is to turn them into paying returns. I don't know how many will convert to paying. So that part remains to be determined in the future.
It's interesting, because hardly anyone in my office cited the free return offer at HRB. I did get a couple of them who mentioned the $39 offer from JTX, but they were both EIC folks and when I explained the "bait and switch" approach my competitors were taking to their type of return, they were appreciative. In the long run I think I'll be better served than if I had to manipulate numbers to make some analyst happy.
And no matter what they will be calling this season a success, despite the revenue . Because the plan is a long term one that starts with the free EZ. So if they get 1 million new free customers (or whatever number) then the plan is on target and in the future the revenue will grow (so they say)