How Much Should You Spend on Advertising for Tax Resolution Clients?
As a tax resolution professional, acquiring new clients is essential for growing your business. While some of these clients may become recurring clients, many do not, which makes it important to have effective advertising methods to obtain new ones consistently. What is the best way to ensure you spend your advertising dollars well? In this article, we will review the concept of return on ad spend (ROAS), provide some actionable tips on optimizing your marketing budget for the best results, and cover target ROAs for tax relief clients. There are many forms of advertising for tax resolution clients. We will walk through what is considered a good target ROAs, how to get there, and how to do better.
What is Return on Ad Spend? (ROAs)
Simply put, ROAs is the revenue generated by the advertising campaign, divided by the advertising costs incurred. It is an excellent marketing metric to measure the effectiveness of advertising campaigns. For tax resolution professionals, having this metric can help determine which advertising channels are the most effective allowing you to allocate resources optimally.
Some companies get caught in the trap of only looking at the cost to acquire each new client without considering the revenue generated from those clients obtained from different marketing sources. While the cost per deal is important, it is essential to consider the revenue generated from each client to understand the effectiveness of a campaign better.
What is a Good ROAs for Tax Resolution Clients?
At TaxCure, we have been in this industry since 2007, from owning our own tax resolution business to working with some of the largest resolution firms and smaller one-person shops. In the many years in this business, a standard target ROAs is 3.0 or 3:1. This means for every $1 spent on advertising, $3 in revenue is expected. For example, if you spend $2,000 on an advertising campaign each month, you should expect about $6,000 in monthly revenue. While a 3 ROAs is considered good, there are ways to improve this, which we will go into more detail below.
This metric is important because when you compete against others, they optimize the various aspects of their campaigns to achieve this result. This could mean they are bidding a certain price to obtain impressions, with the cost per click translating into a certain contact rate, which results in a certain close rate, and each closed deal results in an average price that yields a 3.0 ROAs.
What Should You Spend to Aquire a New Client?
Many factors go into this question because an average client that goes into a standard installment agreement is way different than an average client with years of unfiled tax returns and qualifies for things like a PPIA, OIC, or CNC. So, there are better questions to ask when you are looking to acquire new tax clients. It can be more precise, like, “What should I spend to acquire a new tax resolution client when the campaign yields potential clients willing to pay up to $5,000 on average for resolution services?”. So for this example, based on industry averages, you should target to pay around $1,666.67 per new client in advertising spend. If the average fees are around $3,500, the target should be around $1,166.67.
These metrics can vary significantly depending on how your business operates. Many solo practitioners have lower overhead than larger companies, which makes them way more competitive in the field. The fact is, even though the industry average is a 3.0 ROAs, local tax professionals and smaller practices, without the overhead, can achieve a much lower ROAs than the national firms on average. Smaller firms don’t need 50 new clients a month to keep the business growing. This makes more precise advertising options much more effective. Being more precise with advertising will limit your total potential clients, but limiting your total potential clients can help limit your spending on a narrow market that meets your specific qualifications and people most likely to convert.
Even with smaller tax relief companies that mainly target local taxpayers, it is important that they meet the industry average of a 3.0 ROAs first and then continue to optimize. It is likely for a local firm with precise targeting to obtain upwards of 5.0 ROAs.
How to Improve your ROAs?
Many pieces go into how your return on ad spend ends with each campaign. Our TaxCure Pro membership goes into more detail with various webinars & content articles on the granular aspects that go into increasing your ROAS. For this article, we will be broader.
- Precise targeting: Targeting a specific audience vs. a broad audience can increase your chances of achieving a great return on investment. For example, targeting taxes broadly to obtain new tax resolution clients will result in unnecessary spending on clients that don’t meet your requirements. You can likely spend less on a more restrictive audience and get better returns.
- Compelling ad creative: Your ad creative needs to be engaging and stand out from competitors. Ensure you’re hitting the emotion that will convince potential clients to reach out to you. This will result in more inquiries for your ad spend.
- Optimize your website or landing page: Your website or landing page needs to be optimized for conversions to reduce bounce rates and increase inquiries. Test everything from the color of your button to the copy of your landing page.
- Competitive pricing: Finding the right balance of value and price is crucial in this industry. Being too cheap or too expensive can be detrimental to your close rates and overall ROAS.
- Effective sales process: Give your potential clients the confidence to move forward with your service by identifying a methodology that resonates well with them. Avoid using tax jargon and communicate your value proposition clearly.
- Create strong brand support: Claim relevant listings across the web to showcase your company’s strengths and customers. Many people overlook this step, but it is essential for reinforcing your brand and building consumer confidence. There generally are many touch points across the web before a customer makes a decision to move forward with a certain professional, so a strong brand presence on the web can assist in closing more clients.
- Analytics and tracking: To effectively measure the return on investment of a marketing campaign, you must be able to attribute potential client clients to that campaign.
- Reviews & Testimonials: Do you have external reviews about you or your business? These sites may not lead to direct conversions but greatly assist new clients signing up for services.
Based on these factors, it is important to prioritize where to start with your marketing efforts. To get in front of those taxpayers most likely to propel your business forward, we’ve put together some suggestions on what to target next.
Gain your Local Presence
Allocating your budget first to local presence can be the most effective return on investment in tax resolution services. When given the option of going local vs. a national company, people will choose local most of the time, even without the big national branding campaigns. Below are some ways to increase your local presence.
- Google Business Profile
- Referral Marketing
- Local partnerships
- Local SEO
- Local pay-per-click marketing using Adwords and/or Microsoft Advertising
- TaxCure Profile
Optimize Your Website
Having a professional-looking website is essential in this digital age. Having a low-quality site with poor navigation and look and feel can hurt your brand. Below are some tips to optimize your website to enhance user experience, content quality, and conversion rates.
- Ensure you have these pages on your site:
- About Us: Show your professionals, be real, and make sure you don’t look like a lead generation site, and people can see your photos. A nice about us section goes a long way with clients viewing your site and choosing to use you as a professional.
- Services offered: Have a page dedicated to services offered—even better, a detailed page on each for local SEO benefits. If someone wants a specific service and they get to your site and don’t see it listed, they will likely go elsewhere, and you may lose a client because you didn’t mention it.
- Tax Problems Page: Mention the tax problems you help with. Many taxpayers have yet to learn about the solution to their problem, so it s good to talk about the problems you have experience handling to give the potential clients confidence you can help.
- Clear call to action: Easy navigation with clear calls-to-action.
- Optimize page load speed to ensure it loads fast for people visiting on mobile browsers
- Responsive design for mobile viewers
- Create engaging content: Have a variety of content that is good for SEO purposes, showcase client success stories, display videos and infographics, and engaging blog posts that can be shareable on social media.
- Implement conversion rate optimization. Be sure to test various elements of the website, including headlines, images, and forms. Track and analyze user behavior to inform future optimizations.
Reinforce Your Brand
It is important to reinforce your brand by claiming valuable listings that are easy to find by someone searching about your company.
- Strengthen your company listings. Ensure you have consistent information across the platforms. Update them regularly if that option is available. Monitor and respond to customer inquiries.
- Encourage reviews and testimonials: Having reviews and testimonials on third-party sites can go a long way to assist potential clients with choosing to move forward with your services. Be sure to respond to both positive and negative feedback. Be sure to showcase your standout reviews on your own website and marketing materials.
Optimize Your Sales Tactics
Implementing lead torturing strategies and utilizing CRM software can help keep consistency in close rates and ensure you stay on top of your prospects.
With the TaxCure pro membership, you will gain access to webinars on sales tactics and how to use your local presence to close even better than the leading national tax resolution companies.
How Can TaxCure Help With Your ROAs?
TaxCure was designed with the taxpayer’s perspective in mind, making it easier for them to find and hire the best local professionals who are qualified and trusted by other taxpayers. By promoting local professionals, showcasing actual reviews from taxpayers, and providing solid brand reinforcement, TaxCure has helped many tax professionals achieve a ROAs of over 10 with their membership. With TaxCure, taxpayers can rest assured that they will receive quality tax resolution services, while professionals can leverage the platform’s tools to attract more local clients (national as well, depending upon search filters) and achieve a better ROAs.
Don't have a TaxCure account? You can create your free account here. The free account comes with many benefits that include getting some visibility for local taxpayers and a very strong platform for brand reinforcement. We recommend upgrading to the pro membership to help your company grow. With the Pro membership, TaxCure members receive on average 1045% more inquiries from taxpayers than the free account. We look forward to having you as part of our community to make this industry a better place for taxpayers and tax professionals.