TaxCoach Briefs:    November 13, 2008

Volume 3, Number 45

• Marketing Minute: Lessons From Obama's Victory
• Client Alert: Mutual Fund Buyer Beware
• Member Q & A: Presentations and Mailings

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TAX STRATEGIES FOR MEDICAL EXPENSES =====================================================

Are you showing your self-employed clients how to use a Section 105 Medical Expense Reimbursement Plan to deduct family medical costs as business expenses? If not, they may be leaving thousands in tax dollars on the table. And you may be losing even more in referrals! Your TaxCoach membership includes template plan documents, enrollment and reimbursement forms, and even a 'due diligence' kit with IRS guidance. If you're not already a member, click here for your 30-day trial.

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MARKETING MINUTE (EAL)
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LESSONS FROM OBAMA'S VICTORY

Politicians will be digesting lessons from President-elect Barack Obama's victory until long after we're all dead. But I wanted to start this week's Briefs with a quick lesson from the recent campaign that we can use to grow our businesses.

Final campaign spending figures aren't yet available. But it appears that Obama's campaign spent over $250 million on advertising -- shattering previous records and rewriting the rules for future campaigns. Obama didn't just outspend McCain, Obama crushed McCain by more than $100 million. Obama outspent McCain by as much as 3-to-1 in crucial swing states like Florida. For October as a whole, he spent over $293,000 per hour. Obama even advertised in video games.

Obama explicitly engineered his campaign (by refusing federal funding and hauling in record donations) so he could afford to spend more per voter. (For the record, Obama spent about $3.79 per vote, versus $2.25 for McCain.) And it worked -- big time!

In light of that victory, here's the question you should be asking:

How can I structure my practice so I can spend more to acquire (and keep) clients?

Last week I attended Dan Kennedy's annual Info-Summit, a national gathering of information marketers. Kennedy spoke at length on the new breed of high-fee territory-exclusive programs, some of which sell for $40,000 and up. Kennedy made the very valid point that when you charge customers a lot for your service, you can afford to spend a lot to get them in the door!

You're probably not charging clients that much for the privilege of doing business with you. (If you are, please share your story with the rest of us!) But at the very least this suggests you should target higher-value clients for your marketing. Why look for $400 tax returns when you can target $800 returns? (It's not twice as hard to find them or close them.) Why settle for once-a-year transactions when you can charge monthly retainers? Why target new businesses with no money when you can target established businesses with lots of money and potential financial planning needs?

Today's tough economy is an even better time to target those affluent clients than in a boom. That's because your competitors aren't marketing like they were when they felt flush. This leaves the field more open for your message than ever before.

Campaign spending works, whether you're running for President or "running" to be a new client's accountant. Target that spending on the clients who are worth the most and you'll find yourself succeeding in an economy where others will fail.

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CLIENT ALERT (EAL)
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MUTUAL FUND BUYER BEWARE

Keith and I have talked quite a lot about our experiences with the PowerUser Roundtables we hosted last month. I think we learned as much about you as you did about TaxCoach, and we're looking forward to using what we learned to make the system even more valuable. And one thing we learned is that you'd like more Client Alerts.

As I write these words, the Dow is flirting with 8,000. General Motors is flirting with bankruptcy. And your clients with stock portfolios may still feel shell-shocked. But with markets down, there are always bargain hunters looking for opportunity. (Warren Buffett is buying -- that's good enough for me!)

Clients can find bargains in beaten-down mutual funds. But they should be careful before buying this time of year in taxable accounts. That's because most funds distribute taxable capital gains in December. And, while most funds are down for the year, many of them took profits earlier this year. Those profits can leave clients with a nasty tax surprise!

We've created a new Client Alert warning fund buyers to be aware of this issue. When you click on the 'Client Alerts' button in TaxCoach, you'll see a list of alerts, with this latest on top. The file 'mutualfund.doc' contains letters addressed to each of your clients whose TaxCoach records indicate they own taxable stocks or mutual funds.

You can download the file to your computer, and print on your letterhead using MS Word, or any word processor which supports Rich Text Format ('RTF'). You'll find instructions on the Client Alerts page.

Those of you with securities licenses will probably want to check with your broker-dealer's compliance department before using this Client Alert. Those of you who don't offer securities can still score points by sounding a warning in your area of expertise.

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MEMBER Q & A (KAV)
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Q: My wife knows of one of the couples I gave a presentation to. She said they were too overwhelmed with the information, asked other people what to do, and so have not done anything or gone to someone else. My wife said she believes I should not give a presentation and just tell them what to do. Have you run into this problem with other members?

A: You ask a great question about how much information to give a client.

We find, as do most of our members, that too much information can be an intimidating thing. Most people who would attend a seminar or meet with you really don't want information nearly as much as they want solutions. If they just wanted information, they could get it at a library or from TurboTax.

The key, then, is to use a presentation to educate your audience about the mistakes and missed opportunities that cost them wasted taxes. Give them information they can use to understand the problem -- but most importantly, motivate them to come to you to solve it!

I think your wife is a smart lady!

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Q: I keep getting emails from companies that do post cards or sell mailing lists. I believe I should be doing something as the year ends. What do you suggest?

A: As for the postcards and mailing lists, yes, this is a great time to send out year-end planning information. We have a number of year-end sample mailings in the Playbook, and we've just added a wealth of new items capitalizing on the election results and anxiety over potential tax hikes. Take a look in the Playbook and let us know what you think.

As with all mailings, the key is to target the list as specifically as possible for the type of clients you want to attract, and not just go with a "mass" list. We also hear reports of success with new homeowner lists.

Finally, you'll boost your response from any mailing tremendously if you follow up with repeat mailings or phone calls.

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We're happy to answer your questions on TaxCoach content, features, or marketing. While we give first priority to our All-Star and Hall of Fame members, we work to answer all questions. For best response, email support@taxcoachsoftware.com. If we think the answer will be useful to all of our members, we'll publish it (anonymously) here in the 'Member Q & A' section of TaxCoach Briefs.

Regards,

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