Competing In The Age Of DIY Tax Preparation Services

Competing In The Age Of DIY Tax Preparation Services

Do-it-yourself’ing has become quite the trend over the past 5 years or so. With so much information available from so many different sources, consumers are feeling more empowered, more informed, and more capable. This leads to a natural increase in the desire for DIY solutions. Afterall, there is a certain fulfilment factor that comes into play. When an individual is able to accomplish for themselves, rather than rely on an external system or service there is an innate feeling of accomplishment. The same could be said for DIY tax preparation services.

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In America specifically, it’s important to understand the context of individuality. Being a country formed by groups of entrepreneurs and risk-takers - the United States society promotes and rewards individuality. Understanding this cultural context in developing a strategy to compete with DIY tax software is extremely valuable. Providing deep insight into societal inner-workings that can be leveraged from a marketing stance. 

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While DIY tax preparation services offer consumers the option to file their own taxes independently, and have an impressive set of capabilities - there are still plenty of consumers choosing to file through tax-prep offices. 

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DIY tax preparation services can be an excellent and convenient option for consumers who want to own the process from start-to-finish, and often offer a lot of the same services that traditional tax-offices offer as well. However, they offer these services without the assistance of a human tax-expert ready to answer questions, and deliver personalized services. This is one of the many benefits to filing with a tax-prep office vs. a self-serve DIY tax preparation service.

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In addition to the lack of personalization, most DIY tax preparation services will require an upfront fee, or a subscription fee in order to access more robust features beyond  a normal w-4 tax filing. These fees may seem relatively small. However, considering individuals filing through DIY software shoulder the responsibility of the entire filing process makes paying the fee much less appealing. 

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Whereas when a fee is applied at an in person tax-prep office, the client receives individualized support, and can select to pay for the services through a refund-transfer. This payment method effectively eliminates the upfront fees associated with filing, and ultimately delivers an elevated customer experience. 

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Competing with DIY Tax Preparation Services

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Remaining competitive in the market doesn’t only apply to competing against other tax-firms. In the age of technology and information, traditional tax-prep offices need to consider DIY tax softwares as main-stream competitors as well. There is plenty of opportunity for more traditional tax-prep offices to compete with DIY tax softwares. However, approaching this competition takes some savvy and understanding of how to best leverage the office's position in the marketplace, and emphasize areas in which they can realistically win.

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Understanding the marketplace position helps a company emphasize areas they can realistically win. It also helps identify specific marketing tactics that a traditional tax-office is capable of leveraging at a level above the capability of tax-software. 

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For example - a traditional tax-office is likely not going to achieve a greater sense of convenience in competing with DIY tax-filing software. 

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This doesn’t mean that a tax-office shouldn’t emphasize convenience factors within their product-suite, rather that in marketplace communications and presentation; a traditional tax-office isn’t going to boast higher convenience than DIY software. A few of the tactics traditional tax-prep offices can implement to compete with DIY tax preparation services are: 

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Personalized Service: Personalized service is likely the strongest argument a traditional tax-prep office can make. With human-to-human interaction, there is a natural sense of community that can be established. Staffing tax-professionals that are capable of delivering personalized service is extremely valuable to a firm, and the clients they serve. If clients feel heard, catered to, and leave the transaction with a positive experience, they will likely return as repeat-customers, and provide positive word-of-mouth referrals.

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Referrals are one of the strongest and most potent marketing tactics that exist. While DIY tax preparation services might boast a level of personalization, it’s hard for a computer to compete with a real human being capable of learning the full profile of their individual clients, and catering to them individually. 

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Client Relationships: Client relationships are sort of a result from personalized service. These relationships can extend for years and years - especially in the tax-prep industry. Customers want to feel comfortable with their financial wellbeing, and using the same tax-office year-after-year provides a sense of normalcy and security regarding the tax-filing process. 

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Two vital aspects in creating a strong client-relationship that could last well into the future. Building these client relationships is much easier in person, than through a software, which also achieves a greater level of a customers emotional investment. This means it’s harder for a regular client of a traditional tax-prep office to walk away from their tax-professionals, than it is for a DIY customer to transition away from using DIY softwares.  

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Industry Expertise: Industry expertise is another invaluable aspect that tax-professionals bring to the equation. While DIY tax preparation softwares can be built with all the tax-information in the world, that doesn’t mean it’s delivered in a digestible or effective way. Not only that, but there is often a disconnect between the knowledge that is informing the softwares ‘work-flow’ and the information software presents to the client. 

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This can make the DIY filing process frustrating, overwhelming, and extremely confusing. That said, with a tax-industry-expert there to digest financials, and guide clients through the filing process, there is much more room for step-by-step explanation. 

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Tax professionals that act as sort of personal-guides to their clients will always hold a slight edge against DIY softwares that doesn't know the best tax-codes to leverage for each individual case. This is another place industry expertise can be leveraged. Tax-prep professionals can leverage their own personal knowledge and experience to employ more effective tax-filing strategies that maximize client returns.

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As technology becomes more robust and more powerful, DIY tax preparation services are growing in popularity. However, Refundo offers a full suite of tax-software and tax products for your office to employ and maintain a competitive edge in today’s growing marketplace. Refundo’s tax softwares takes the pressure of complex tax-filing off your office staff, allowing them to focus on delivering the highest standard of customer service, leaving each and every client ready to deliver glowing reviews.