In the cutthroat tax preparation business one company is looking to draw in more customers this year by promoting the joy of tax season.
The second largest US tax preparer, Jackson Hewitt Tax Services, is reminding people that doing your taxes doesn’t have to be a dreaded chore. Instead, it can be a time to jump up on a desk and boogie down to some ’90s R&B.
This week Jackson Hewitt launched a national ad campaign that focuses on tax refunds. With some 75% of tax payers eligible for a refund (Jackson Hewitt reports customers average $3,000 in cash back) tax time can actually be something that people look forward to.
Jackson Hewitt teamed with Atlanta-based ad agency 22squared to create the ads that are branded “Jackson Hewitt’s How You Do It.” The 30-second spots show happy tax payers dancing to Montell Jordan’s 90′s hit song “This is How We Do It.”
Jackson Hewitt, which has 6,600 locations (some inside Walmart stores), is looking for an edge this year as tax prep companies compete for the business of tax payers. Jackson Hewitt is the underdog in the tax prep business and is recovering from Chapter 11 bankruptcy, which it emerged from last year. It is #2 tax prep company, behind H&R Block, and it’s a distant second. Jackson Hewitt prepared 2.5 million tax returns in 2010. Compare that to H&R Block, which prepared 20.1 million US returns last year. H&R Block has an approximately 15% share of the tax return market, while Jackson Hewitt holds about 4% of the market.
The recession has been a shaky time for tax preparers who target middle to lower income customers. High unemployment and a struggling economy means as more and more people do their own taxes as a way to save money. Jackson Hewitt saw a decline in the numbers of tax returns it prepared from 2008 through 2010, but saw slight growth in the number for the first time in five years during the 2011 tax season. According to the First Research breakdown of the accounting services industry, success of individual firms is often based on striking a balance between services and effective marketing. So companies like Jackson Hewitt are looking any advantage possible.
Tax prep companies also are busy launching new online services and mobile apps in order to stay competitive and attract younger filers. H&R Block may be at the top of the tax prep heap, but it still struggles to maintain its status. The company is growing its online business as a way to draw clients away from do-it-yourself tax software TurboTax.
It’s high season for tax preparation companyies. February through April accounts for a majority of profits and annual revenue for the firms. Competition is fierce and any leg up (even if it dancing to Montell Jordan) will be an advantage.