H&R Block Reaches Young Consumers by Mobile Phone

Serves Advertising to ChaCha Users Who Ask Tax Questions

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SAN FRANCISCO (AdAge.com) -- Tax preparer H&R Block has a strong awareness level with consumers, but it wanted to reach a younger audience. So it's trying something new this tax season -- mobile advertising -- as a way to give away its services for free.

The young consumer is key to the growth of H&R Block, whose strategy is to acquire customers early on to cement their loyalty.
The young consumer is key to the growth of H&R Block, whose strategy is to acquire customers early on to cement their loyalty.
In a pilot program started last month, H&R is advertising its free online-tax-preparation service through ChaCha, the 1-year-old ad-supported mobile service with a core audience of 18- to 34-year-olds. ChaCha lets users call in or text tax questions, then sends them responses via text, along with H&R Block ads inviting them to access tax-prep services gratis.

Key to growth
The young consumer is key to the growth of H&R Block, whose strategy is to acquire customers early on to cement their loyalty.

"Free online tax preparation is an entry point into our brand and is well-targeted to the younger consumers with simpler tax returns," said Paula Drum, H&R Block's marketing VP. "We are looking to acquire customers for life ... to serve their changing tax-preparation needs as they move through their life stages."

With H&R Block communities in place across social media such as YouTube, Facebook, MySpace and Twitter, mobile is one more platform in the digital channel for the brand, Ms. Drum said. H&R Block is still in the experimental stages with mobile, she said, and expects to do more with the platform as it learns more about how to engage consumers with the medium.

"What we're realizing is consumers are changing in terms of how they interact with brands, and the millennial market ... will interact with brands and companies a lot differently than their predecessors have, so we're looking to make the brand accessible wherever people want to get information from us," Ms. Drum said. "It's really simple; it's being where customers need us to be."

Response rate
ChaCha plans to deliver more than 2.8 million impressions between now and April 15 and is seeing a 3% response rate to the H&R Block ads. It expects the opt-in rate to grow as the tax-filing deadline approaches. Last year, the mobile answer service experienced a 25% increase in tax-related questions leading up to Tax Day on April 15.

"One of the things that we don't feel is the right marketing avenue for a mobile device is to push out marketing messages," Ms. Drum said. "The biggest thing we're trying to do is be relevant at the point of where [people] want to interact with the brand, so pushing messages out to mobile devices doesn't provide the relevance. There's so much more opportunity when someone asks a question about taxes for us to be there."

The answers to the tax queries come courtesy of "guides," as they're called in ChaCha's vernacular. Anyone can become a registered guide, provided they pass a test, and once they do, they are given access to databases and other tools to help users get answers. Guides get paid between 10 cents and 20 cents a question.

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