Plant Seeds in Tax Season for a Bountiful Harvest in the Summer
by David W. Cottle, CPA, CMC
Income tax season is when clients are most receptive to tax, estate, business, and financial planning. Yet that is when you have the least time available to deliver these services. It's ironic that your clients are the hottest prospects just when you don't want them to be.
How can you get around this dilemma? Use the tax season to set up later appointments (such as in the summer or fall) to address these important issues with clients.
For example, my latest book, Target marketing: How to Gain Profitable New business, contains a checklist, 60 Clues to Tax and Financial Services on your Client's 1040. Since the book was published last year, I have expanded the list to 84 clues.
Here's how to use the list: When clients come to deliver their tax information or to pick up their return, sit down with them and say, "If it's all right with you, I would like to review your [information or return] with you to see if there are opportunities we are overlooking or threats we should address. Would that be all right?" (The bold-faced phrases, "If it's all right with you" and "Would that be all right?" are very important. They let clients feel in control of the interview and its outcome. You don't want to ram anything down your client's throat, so "ask to ask.") Nine out of 10 clients will be glad for you to take the time to review their data or return with them. The review should take about a half-hour with most clients.
You can apply this interviewing technique to non-tax and business clients also. The Target marketing book also has checklists for a Business Client Meeting Agenda, an Individual Client Meeting Agenda, and a Business Goal Sheet and Action Plan.
KEY POINT: If nothing keeps your client awake at night, maybe you have not asked the right question.
Here's a variation: "If it's all right with you, I would like to ask you a few questions to see if there are financial/business opportunities we are overlooking or threats we should address. Would that be all right?"
Then go over some of the items on the checklist.
Clients are willing to pay significant fees if you can save them potential taxes or improve their financial position or business. Tell clients during the interview that they may have an estate, business or financial problem.
EXAMPLE: Every client with combined net worth and life insurance coverage of over $675,000 is a potential estate planning client. But too many CPAs do not even know each client's net worth. And even fewer know each client's life insurance coverage.
As you know, life insurance is the most heavily taxed asset in America. So much insurance is included in the estate - starting at 35 percent! It is simple to set up a life insurance trust. Yet few CPAs take the time to investigate.
You owe it to your clients to identify every one with a potential tax, financial, or business problem. EXAMPLE: "Jim" reviewed his clients' 1040s for those with large dividend and interest incomes who might need estate planning. He identified an elderly couple. After a short interview, he determined they had a potential $400,000 estate tax liability when the second spouse died. Setting up an A-B Trust protected the clients' estates. When "Jim" met with the clients to discuss his recommendations, the husband was delighted at the savings and happily paid a fee over $1,000 above the CPA's standard charges, and indicated he would have been happy with a fee of $15,000!
KEY POINT: Since people buy solutions to problems, if your client does not have a problem, you do not have a prospect. Unfortunately, many clients don't even know when they have potential estates tax problems.
For clients to act, they must be dissatisfied with their current state of affairs. Use the interview to educate the client and find, awaken, and stimulate that dissatisfaction about the current situation to convince the client to make changes, such as planning his or her estate or retirement.
Dig your well before you're thirsty
If you wit until summer to talk to your clients about tax, estate, business, and financial planning, they might think you are seeking their business only because you have a vacant appointment book. That is bad for your credibility.
The fact is that clients need these value-added services all the time - you just don't have the time during the busy season.
Instead, talk to them during the tax season - just set up the work appointment for after the busy season.
Do it this way: "Well, Charlie and Janet, it looks like you may have an estate tax problem. I won't know for sure until I get more information and do some research. Let's set up an appointment for May 17 to discuss this. Would that be all right?"
About the toughest response you will get is "How much will that cost?" In which case reply, "Nothing. The meeting will be our gift to you. If it turns out that you do need an estate plan, I'll be happy to discuss prices with you after I know more about how much work we need to do. Fair enough?"
That "fair enough" comment is also a valuable communications tool. It lets clients keep control of their situation and assures them you will not run up a bill without their agreement.
Then when you meet in the summer, decide whether the client needs the service and discuss prices. If you get a price objection, try this response: "I'm fortunate. I am in a financial position where I do not need your money. But that is not as relevant as the fact that you need this service. It will help you achieve your financial goals and sleep better at night knowing that when you really need something, you are going to pay for it whether you buy it or not. And it will usually cost you more and be more painful if you don't buy it."
I hope you find these observations helpful. If you would like a copy of the 84 clues, e-mail us at email@example.com, or write to me care of David Cottle Consulting, 2440 South Federal Highway, Stuart, FL 34994-4582, or fax me at 461-781-4234.