TurboTax
It is the time of year when I need to start on my tax returns and I was thinking of software that I have used in the past. Of course Intuit came to mind and they have a product right now called TurboTax with the latest changes required to make your 2008 / 2009 returns. What suprised me even more is that Intuit is announcing its figures this week and do you know, they are a 3.1 billion dollar company now?
Well, I thought I would look into them a little more in detail and guess what, this year I think they have managed to turn on themselves. They had a great set of products and Turbo tax was certainly one of them. For many years people would pay a tax advisor or accountant to do their books for them and it was hard enough to persuade them to do it all themselves by using a piece of software. But Intuit did a good job over the years of persuading people to use their doftware and of course once people used it they realised that it was not as painful as previously thought and so year after year they would come back to the annual updates and new releases that just kept themoney flowing.
This year however, in an attempt to get more money out of their customers, Intuit changed the rules of the game. Intuit tried
to re-position its business as a provider of tax services rather than
that of a software vendor. The first mistake was to significantly
increase the price of Turbo Tax, thinking tha by adding “free”
federal e-filing to the package people would be prepared to pay. This backfired badly. Many customers
didn’t care about e-filing, so they perceived they were been charged
for a feature they didn’t want to start with.
Then, realising that most users of the TurboTax were not only doing their own books, but for other family members too, Intuit decided to start charging for each Tax return printed. Well, as you can imagine, the previously loyal customers started defecting to the competition, in this case H&R Blocks Tax Cut.
Intuit realised their mistake and slashed their prices as well backtracked on their intention to charge for each Tax return print. However, H&R Block in a briliant move, dropped their prices, and sent out their Premium Federal Tax Cut version for free to tens of thousands of consumers.
On top of all this H&R has an advertising campaign "You've got people" that goes to the heart of the problem. Doing your tax returns is a difficult and emotional enough task at the best of times, and their message tries to humanise the process a little.
So, I say sell Intuit and buy H&R Block :-)
Well, I thought I would look into them a little more in detail and guess what, this year I think they have managed to turn on themselves. They had a great set of products and Turbo tax was certainly one of them. For many years people would pay a tax advisor or accountant to do their books for them and it was hard enough to persuade them to do it all themselves by using a piece of software. But Intuit did a good job over the years of persuading people to use their doftware and of course once people used it they realised that it was not as painful as previously thought and so year after year they would come back to the annual updates and new releases that just kept themoney flowing.
This year however, in an attempt to get more money out of their customers, Intuit changed the rules of the game. Intuit tried
to re-position its business as a provider of tax services rather than
that of a software vendor. The first mistake was to significantly
increase the price of Turbo Tax, thinking tha by adding “free”
federal e-filing to the package people would be prepared to pay. This backfired badly. Many customers
didn’t care about e-filing, so they perceived they were been charged
for a feature they didn’t want to start with.
Then, realising that most users of the TurboTax were not only doing their own books, but for other family members too, Intuit decided to start charging for each Tax return printed. Well, as you can imagine, the previously loyal customers started defecting to the competition, in this case H&R Blocks Tax Cut.
Intuit realised their mistake and slashed their prices as well backtracked on their intention to charge for each Tax return print. However, H&R Block in a briliant move, dropped their prices, and sent out their Premium Federal Tax Cut version for free to tens of thousands of consumers.
On top of all this H&R has an advertising campaign "You've got people" that goes to the heart of the problem. Doing your tax returns is a difficult and emotional enough task at the best of times, and their message tries to humanise the process a little.
So, I say sell Intuit and buy H&R Block :-)
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