TaxCoach Briefs:    June 18, 2009

Volume 4, Number 27

TaxCoach Briefs archives.

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MARKETING MINUTE (EAL)
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A LESSON FROM TIGER WOODS

Are you a golfer, hoping we're running some sort of contest to give away a lesson from PGA great Tiger Woods?

Keith and I sure wish we could do that. Sorry, we can't. But we can draw a marketing lesson from a recent study that will be worth far more than anything Tiger can do for your swing.

Earlier this week, the New York Times ("All the news that fits, we print") published an article titled Settling for Par: Pros More Likely to Play it Safe. The story details how PGA Tour professionals, including Tiger Woods, lose millions due to the same risk intolerance that affects your clients.

Whoa!

Seriously. Read on.

Specifically, the article discusses a forthcoming study from Wharton School professors Devin Pope and Maurice Schweitzer. They analyzed data from 1.6 million putts made by 200 golfers from 2004-2008, using data the Tour records on each ball's green location, accurate to the nearest inch. (These guys must be a hoot at faculty parties -- Keith.)

What did they find? Surprisingly, "even the world's best pros are so consumed with avoiding bogeys that they make putts for birdie discernibly less often than identical-length putts for par." Meaning, fear of failure keeps even the greats from trying as hard as they can. The difference, 3%, is enough to cost the average golfer one stroke per tournament. And for the top 20 pros, that means $1.2 million less prize money per year. Even Tiger Woods showed the same effect.

We've said before that pain is a better motivator than gain. It's one thing to tell a prospective client "I can save you $5,000/year on your taxes." It's another thing entirely to say "based on the information you've given me, you're wasting $5,000/year in taxes you just don't have to pay." Economists even have a name for it: "loss aversion." As the article says:

"The psychological preference to avoid a perceived penalty (losing a stroke relative to par) rather than go for a perceived gain (gaining a stroke) has some benefit. Golfers tended to leave their conservatively stroked birdie putts slightly closer to the cup than more aggressively missed pars — leading to their making their follow-up shot more often. But that temporary gain was far outweighed by the overall cost in strokes."

That's some powerful insight, from a statistically significant sample of some of the world's top performers! So how can you put the study's findings to work in your practice? Consider these three points:

  1. Take it as a "real-world" confirmation of the bias we have always put forth. The Times article emphasizes this point, stating "the finding may become significant among behavioral economists, many of whom have suspected that the loss aversion found through contrived experiments might not be demonstrated by actual, expert competitors vying for high stakes."

  2. Remember whenever possible to present your value as curing pain rather than delivering gain. The dollars and cents may be the same, but the net effect is far different.

  3. Clients love stories. Use this story with your clients who play golf to illustrate how their own "loss avoidance" may be costing them money.

Bottom line here: clients hate pain more than they love gain. Use that knowledge whenever you can to build your business and theirs!

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MEMBER RESOURCE (EAL)
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LIFEPRO FINANCIAL

If you offer insurance, annuities, and investments as part of your practice, you’ve clearly seen how powerful TaxCoach can be to generate leads and clients. TaxCoach gives you an immediate and measurable benefit to offer your clients, and positions you as a trusted advisor rather than a product seller. TaxCoach also helps you free up wasted tax dollars you can use to finance insurance and investment recommendations!

Keith and I launched TaxCoach just over four years ago, and we were approached almost immediately by financial-services providers wanting to incorporate our plain-English brand of tax planning into their marketing. Most of them talked a good game. But none were able to develop and implement a plan for incorporating our system into their marketing. Until now.

LifePro is an independent marketing organization with 8,000 licensed producers, headquartered in San Diego. Bill Zimmerman, LifePro’s President, approached us late last fall to incorporate TaxCoach into his organization’s marketing. Together, we created “TaxPro FP,” a private-label version of TaxCoach customized for financial services professionals.

Keith and I have been impressed from the start with LifePro’s staff, resources, and commitment. I have spoken twice for LifePro, at their Producer Symposium earlier this year and a special April 15 tax-training seminar. I’ve been impressed by Bill himself and his entire 30+ staff. LifePro offers great training (at least four events per week, with over 18,000 agent-hours of training delivered in 2008), marketing support, case design, and strategic alliances with 53 of the country's finest insurance carriers.

So we urge those of you who offer insurance and annuities take a look at LifePro. Call Ben Nevejeans at 888-LIFEPRO (543-3776) and tell him we sent you. Or visit them at www.lifepro.com to learn more.

We’re not licensed to sell insurance ourselves, so we’re not doing this to split or share commissions. We’re just introducing you to a friend who we think can help you grow your business.

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MEMBER RESOURCE (EAL)
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INTRODUCING "CERTIFIED TAX COACH™"

Keith and I designed TaxCoach so you could give your clients plain-English concepts and strategies for cutting their tax. But we realized very quickly that the system’s real value would be to set you apart from your competition and distinguish yourself in a crowded market.

Not long after we launched the system, we hit on the idea of establishing a “Certified Tax Coach™” designation that would let you advertise up front just how distinctive you are. But, like many ideas, it got shelved as we focused on growing the core business and launching elite programs.

Earlier this year, when I was in San Diego to deliver a seminar, I had dinner with Hall of Fame member Dominique Molina. Dominique is one of our true stars – last year, she billed $178,000 in tax planning, at fees ranging from $1,500-$3,500 per plan. She told me that she was being approached by other accountants looking for the secret to her success, and she was considering a program to teach how to "clone" it.

I told her about “Certified Tax Coach™.” We quickly agreed to combine forces, to offer a unique program focusing on high-value tax planning concepts and strategies.

At this point, we expect to host the first class with a small group (perhaps not more than 20 participants), probably in Chicago, probably in late September. We anticipate three days of training, with the focus on:

The designation itself will include license to use the “Certified Tax Coach™” trademark, ongoing training and CE, and placement on a national web site where clients from across the country can find the nearest Certified Tax Coach™.

If you’re interested, take our brief survey and leave your name and email address to join our Priority Notification List. We’ll be excited to bring you more details as they become available!

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NEW RESOURCE (KAV)
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MEMBER CALL-IN DAYS

Ever since Ed and I launched TaxCoach, we've invited you to submit your questions on TaxCoach content, strategies, or marketing to us by email or phone. We've been pleased to answer those questions as part of making our service as valuable to you as possible. But as the volume of questions has grown, Ed's time has become scarcer, and he has been forced to dedicate most of it to our All-Stars, Press Club, and Hall of Fame members.

We still want to hear your questions because they tell us what you need to know to make the most of the system. We still want to answer to be as useful as we can. We just need a better system. So we've decided to start offering regular Member Call-In hours, where you can present your questions and discuss the answers with Ed and other callers.

We anticipate offering call-in hours on Wednesdays at 1PM Eastern time. If you have a question and can't make the call, email us the question! We can still answer it for you then, and post the most recent call on the site.

The first call-in will be on Wednesday, July 1, at 1PM Eastern. Mark your calendar! We'll have connection instructions for you in next week's Briefs.

Of course, access to Ed is always available to All-Stars, Press Club, and Hall of Fame members, via the scheduling calendar on the All-Stars page.

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We're happy to answer your questions on TaxCoach features or technical issues anytime. (Save marketing and tax strategy questions for Member Call-Ins.) 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,

Ed Lyon
Keith VandeStadt
www.taxcoachsoftware.com
(513) 321-2820

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