Quick Overview

Plenty of publishers make money by syndicating content to third-party media.  But, Tax Rite, Inc. is one of the very few we know of who syndicate coaching services.   Co-owner Jeremy Boston reveals in our exclusive case study how the company’s TaxHotline.net personal advisory service now reaches more than one million consumers…99.99% sold through syndication deals with organizations ranging from financial institutions and unions to churches.

Includes tips on how to use a/b tests to close big sales, and a link to one of the best subscription sales videos we’ve ever seen.

Company Profile

Founded: Tax Rite, Inc. was founded in 1995 and went online in the late 1990s.
No. of Sites/Services: 3 — TaxHotline.net for expert and independent tax advice, PFAssist.com for personal finance advice, PersonalTechAsst.com for IT support to companies and individuals.
Business Model: 100% subscription-based with a focus on group subscriptions
Subscribers: 15-20 companies through group sales, making TaxHotline’s services available to more than 1 million people. They also have a few hundred individual subscribers.
Location: Arlington Heights, IL
Website: www.TaxHotline.net
www.pfassist.com
www.personaltechassist.com

Target Market

TaxHotline.net’s primary target market consists of companies that offer services in the financial or legal realm. These companies are trying to attract either paying subscribers or members through Internet marketing, and may be looking for ways to increase response and retention rates

Their secondary market is individuals, although co-owner Jeremy Boston admits that this has been more of a challenge to build.

Content

TaxHotline’s content consists of coaching, consulting and expert advice from in-house professionals (supplemented seasonally with remote workers). Users get unlimited access to this coaching service via fax, email and phone. Their services include:

• Unlimited tax assistance for business & personal tax needs;
• reviewing your tax returns from last year;
• advice regarding IRS letters & audits;
• information regarding new tax laws and regulations;  and
• tax planning.

They can also e-file and prepare user’s taxes for an additional fee.

Revenue Streams

TaxHotline has four different revenues.

More than 99% are through syndicated group sales. TaxHotline currently has about 15-20 syndication clients (listed here: http://www.taxhotline.net/s-19-our-clients.aspx). Prices vary greatly but are based on usage and how TaxHotline’s services are positioned in the customer’s pitch to their subscriber base. Revenues are generated after sales of each subscription, of which TaxHotline gets a cut.

A small fraction of revenues come from individual subscriptions sold online, which are priced at $9.95/month or $99.95/year.

A third revenue stream consists of e-filing and tax preparation, which are not subscription-based. Users are charged $100 for federal and state returns than include schedules A, B, and D, and an additional $50 for all other schedules.

Lastly, TaxHotline also makes a fraction of its revenues by acting as a broker for companies with complementary products. After introducing companies with matching needs and services, TaxHotline will receive a commission of any sales made.

Marketing

TaxHotline’s sales staff of six usually generates leads by perusing LinkedIn or doing research on the Internet for online subscription companies they believe can benefit by offering TaxHotline’s services to their customers. They have recently begun attending trade shows as vendors, but limit it to 2-3 times a year so far. TaxHotline also gets some decent Word of Mouth marketing through professionals in the marketing, financial or legal industries. TaxHotline will reward any professional who introduces them to a new group subscription client with a commission off the sales to that client.

The sales staff will begin contacting leads via email (with a “read receipt” request attached) and follow-up with a phone call. The sales pitch includes explaining how the company can differentiate itself by paying for TaxHotline’s service as a premium to the company’s members. Generally, offering TaxHotline services increases client’s subscription rates usually by 20-30% and sometimes as high as 60%. So, companies that pay for TaxHotline’s service for their members end up selling more memberships and being more profitable.

Boston says the biggest challenge of the sales process is closing new customers as the entire sales funnel, from contacting a prospect to closing a deal, takes about a year. He can usually close leads by encouraging potential customers to run an A/B test offering TaxHotline’s services to their members, which usually proves that TaxHotline will increase response and retention rates. The test just includes inserting TaxHotline benefits in the graphics, as seen below and at the end of this article.

The company markets its individual subscriptions via its website, which features a great video explaining their services (http://www.taxhotline.net/s-20-our-product-video.aspx). The crisp, continuous animation and clear, well-paced audio is engaging but doesn’t bombard viewers with jargon. It also makes viewers feel like TaxHotline is in their corner. Once individuals buy subscriptions, they get a receipt email with PDF attachment with details on how to use TaxHotline.

Retention
Boston claims that they usually don’t have any problems retaining their corporate clients and have lost only one or two over the years. TaxHotliine does not try to get user names or credits cards from the companies they sell group subscriptions to, stating that “our clients own their customers.” They don’t market to users directly in any way.

They do provide some free content for companies with group subscriptions, such as a monthly tax tip for a company newsletter. This has been shown to increase retention for the companies by reminding members/subscribers that they have free access to TaxHotline’s services through their subscription with the company.

In terms of individual subscriptions, most have a 4-month lifespan during tax season. However, 50% of individual subscribers return the next year without TaxHotline doing anything.

Cross-sales
When appropriate, TaxHotline will also try to sell the companies they work with their additional services in IT help and a new product to help prevent identity theft.

About Jeremy Boston

Jeremy Boston worked in IT for 13 years at companies such as Kraft, before joining his dad at Tax Rite, Inc. When working at Kraft, Boston was told that “business drives technology, not the other way around.” He tried to live by that code by being the IT guy who solved problems, not the one who told marketing they couldn’t do what they wanted.

Boston claims that his biggest challenge has been from shifting his attitude from one of a cost-saving employee to a revenue-generating co-owner. Despite his extensive IT background, he’ll only spend 15-30 minutes trying to figure out something technical before handing it off to a consultant to solve because he knows this will eat into his time to generate sales and revenue..

Vendors & Technology

Sales and Content are all in house.

Web development  is also done in-house as Jeremy has IT background. He recommends AsptdotnetStorefront as a great shopping cart with customer service portal, CMS and email capabilities.
http://www.aspdotnetstorefront.com/

Creative — Brian Hinterlong and Torque Creative
http://www.briantoddcreative.com
www.torquecreative.com

Payment Processing — Authorize.net for individual subscriptions
www.authorize.net
For group subscriptions, they invoice the company.

Subscription Site Insider Analysis

TaxHotline.net is a great example of how coaching, consulting, and expert advice services can be sold to thousands of individuals rather easily by focusing on group sales to other companies in the online subscription or membership business. We especially like TaxHotline’s eagerness to A/B test the worth of their own service to their customers’ customers.

One area of opportunity is to sell directly to consumers. The quality and independence of their service does make them a compelling consumer purchase. However, TaxHotline would need to hire staff to specialize in business-to-consumer marketing and expand their traditional B2C marketing, such as augmented SEO, search advertising and advertising on independent personal finance sites.

Lastly, we suspect they could optimize their marketing for their cross-sell/upsell for their $100 tax preparation services.

Creative Samples

Below are additional samples of how TaxHotline’s services are included in their client’s marketing collateral.