Army of Tweeting Tax Pros Leads H&R Block Social Push

With Its New Campaign, Turbotax Competitor Is Betting on Digital Filers

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YORK, Pa. ( -- H&R Block has sold do-it-yourself tax-preparation software for 15 years, but it hadn't done much to market it. After all, the bulk of the company's business comes from 12,923 retail storefronts where preparers do taxes for people who can't or don't file their own.

SOCIALLY ACCEPTABLE: Work from Team HRB includes a dedicated TV spot, a Facebook fan page and a YouTube channel.
SOCIALLY ACCEPTABLE: Work from Team HRB includes a dedicated TV spot, a Facebook fan page and a YouTube channel.
But this year, the $4.1 billion company is backing "H&R Block At Home" software with a marketing program including an ambitious social-media push. The shift comes as consumers increasingly turn to online-tax preparation: Last year almost 95 million tax returns were filed electronically, and about a third of them (32 million) were filed from a home computer, according to the Internal Revenue Service. That's up from 90 million total and 27 million from home in 2008.

"The retail segment is still huge and the biggest part of our business, but digital is also the fastest-growing part," said H&R Block Chief Marketing Officer Robert Turtledove. "We recognize the tax-paying landscape continues to change, and many people today are not doing taxes the same way their parents did. Our foray into digital is a huge recognition of that. It's also a recognition of how they're consuming media."

That means a marketing focus that included not only a dedicated digital TV spot -- part of a larger campaign created by Omnicom Group's Team HRB -- but also cross-promotion of the DIY service across advertising media. The social-media strategy includes a Twitter account, widgets, blogs, a YouTube channel and a Facebook fan page and apps -- a recent one in the form of a quiz asks, "How deductible are you?"

The core of the social-media plan is a 1,000-member tax-professional team, chosen from 100,000 H&R employees across the country, who have been "social-media-qualified." The tax pro force's main domain is the home website, where there are both community pages as well as direct "Ask a Tax Advisor" buttons (staffed beginning Jan. 5). The tax team will answer questions directly, of course, but will also "listen" in to concerns or problems being discussed within communities and forums and respond accordingly.

"They did a good job last year of using social media for support and education online" for the storefronts, said Jeremiah Owyang, partner at Altimeter Group and author of the Web Strategy blog, and it makes sense to expand that to online software. "Doing your taxes is such a human thing, it makes sense to establish a community where people can ask questions and learn from each other."

With the shift, however, H&R Block is moving deeper into a space where competitor Intuit's TurboTax is well-established. Rohit Bhargava, senior VP at Ogilvy 360 Digital Influence and author of "Personality Not Included," noted that the years-in-the-making TurboTax online community is rare in social media built around a product because "the community is actually useful. The answers are good and the advice is solid," he said.

Tax prep marketer embracing DIY filing software.
Tax prep marketer embracing DIY filing software.
But H&R's advantage could be that 1,000 professional force -- and its ability to cross-promote its at-home and in-office services. Mr. Bhargava said, "If you can get those thousands of [H&R employees] to really contribute, I think that within a year, you could be even more useful because the people answering the questions are tax professionals."

Retail footprint
Another one of H&R Block's advantages -- much like Blockbuster in its battle with Netflix -- is its physical presence, location where consumers can bring a stack of papers and talk to a professional tax adviser, Mr. Bhargava said.

Part of the hesitancy to launch aggressively into the online-tax-prep space before may have been the perception that digital filings could impinge on the retail business, especially with its 4,352 franchise owners. "I don't think there's any denying that historically there has been a nervousness about the digital business cannibalizing the retail business," said Mr. Turtledove. But after H&R Block management presented its view that digital is not going away and that it could be a gateway into the brand, he said the company's franchise owners seemed to understand the strategy and that it could even be beneficial.

"They know that there is always a sense that no matter how well you think you just did your taxes on your own, there is always a little doubt. And wouldn't it be nice to have a tax professional take one last look?" he said. "That's where our 'Best of Both' product comes in."

"H&R Block Best of Both" allows tax filers to start online, then either come into an office for help, dropping off papers to be read and checked or consult with a tax professional by e-mail or phone and have the final filing checked online.

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