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Battle of the Tax Preparers: New Campaigns Fight for Attention

Tax season is not something we look forward to, largely because the U.S. tax code becomes more burdensome and incomprehensible every year, despite numerous government promises to simplify the code. This annual burden has led to a proliferation of tax services, as well as tax preparation software and related online options. Ever-increasing competition for tax preparation service dollars has led to increased ad spending among the top competitors.

Likeability and Distinction

Early in January 2017, Intuit’s TurboTax pre-Super Bowl campaign launched some highly entertaining ads (Relax There’s TurboTax). The ads feature well known sports figures or celebrities (my favorite so far is home run hitter David Ortiz, with “American Horror Story” star Kathy Bates a close second) seeking advice on tax deductions. The ads are funny and effective, highlighting that TurboTax software includes an option for phone calls to a live TurboTax expert.

While TurboTax is promoting one item that leading competitor H&R Block’s online tax preparation service does not—live phone help—customers may miss that H&R Block does offer chat help, making the claim of distinction purely perceptual. If H&R Block’s ads do not counter its competitor’s claim of distinction, that live help claim could sway some people to switch to TurboTax. Add the fact that their ads are funny and relatable, and the ad campaigns could shift the balance for at least some tax filers.

Experience as Value Proposition

Meanwhile, H&R Block is running a new campaign (Get Your Taxes Won) with celebrity spokesperson Jon Hamm of “Mad Men” fame. The company received some negative publicity and saw a stock decline when then-GOP-candidate Donald Trump said he dreamt that a simplification of the U.S. tax code would “put H&R Block right out of business.” The company denies that the president’s comments were a primary driver for the new campaign. But the 12-ad campaign is the largest in the company’s history.

The choice of Hamm was not entirely based on acting abilities and celebrity status: Hamm hails from St. Louis, MO, the headquarters of H&R Block. Hamm also, it turns out, professes to be a long-time H&R Block customer. The company also liked that Hamm can deliver dry humor and a serious tone; later ads will speak seriously to the firm’s experience and knowledge of the 75,000-page U.S. tax code. Their claim as the most knowledgeable and best at getting customers a maximum return is their value proposition, says Chief Marketing and Strategy Officer Kathy Collins.

In addition to straightforward advertising, the firm is upping the ante (and the risk) by pushing back against TurboTax claims via social media. Some recent exchanges on Twitter have been quite entertaining… but will they sway tax filers? That question has caused H&R Block to promote special offers, including FreeEZ for people using the 1040EZ Form; MoreZero for self-filers using 1040 EZ or 1040 + Schedule A; and RefundAdvance for Earned Income Tax filers whose refunds could be delayed under new IRS rules.

So far, Hamm’s appearances include the actor playing various parts—a mounted policeman, a zombie slayer, a Roman soldier—on set, trying to get film crews to stop spending so much time doing their taxes, while touting H&R Block’s many options and offers. The ads focus on multiple services and offers. Too many messages could reduce ad effectiveness… or capture frustrated tax filers’ attention through Hamm’s repeated appearances on their TV screens.

Advertising Can Be Taxing

Elsewhere, the tax preparer battle has forced Jackson Hewitt to invest in TV advertising. JH is touting their Express Refund Advance service in new ads. That strategy may be their only play in the ad game; their online filing options offer a less user-friendly experience, fewer assistance options, and no cost advantage over the competition.

And another player receives high reviews—TaxAct. TurboTax is the most expensive of the top three, TaxAct the cheapest, with H&R Block and Jackson Hewitt in the mid-price range. Only TurboTax fails to offer direct import of older tax records from top competitors. Maybe H&R Block should do an ad about that….

Most filers can use TurboTax’s free online version, and PC Magazine rates it the best user experience of the top three services. But users needing additional schedules and forms may have to opt for the more expensive version of online tax services. And here’s another problem with online filing—it can be tough to correct errors or get satisfaction if your refund is not returned as promised, or the amount is not what your tax forms said it would be. Many TurboTax users are becoming disgruntled over recent, costly upgrades and filing issues. If the right competitive ads reach those people at the right time (recency) [link 1770], many users could migrate to other services.  

Will the new ad campaigns convince some tax filers to switch, or try an online service for the first time? With both campaigns still unfolding, it remains to be seen whether one or the other will prove dominant. While I’ll probably be heading back to my local H&R Block office (because I hate trying to decipher tax forms, and I like my tax preparer), I’m enjoying TurboTax’s and H&R Block’s campaigns. Expect the campaigns to intensify as filing dates approach. And expect big reveals of new ads during the Super Bowl.

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