DIRECT MARKETING has taken the lion's share of the $100 million being spent by H& R Block to reach prospects during this tax filing season.
The effort includes a 20-million-piece direct mail campaign with improved segmentation, and the firm's first DRTV spots.
In February, Block reported that it had served 8.9 million clients, a 4% increase over the same period last year. Tax preparation and related fees rose 12.9% to $964.2 million.
The 60-second national spots, which began in January and run through the end of this month, offer the Double Check Challenge, a free examination of the viewer's 2000 taxes.
Viewers are invited to call an 800 number for an appointment or to order a tax preparation kit.
Block has also overhauled its direct mail, moving beyond generic messages to broad target groups like singles, retirees and savvy investors.
It's now sending tailored pieces to more narrow segments.
“To help our clients with financial planning we have to understand them and be there at critical points in their life,” said Joe Sevcik, assistant vice president of enterprise marketing for H&R Block.
To gain a clearer picture of its customer base, Block worked with marketing information provider Claritas to enhance and segment its data companywide. Using financial health and service needs as a starting point, Claritas applied 42 two-digit “P$ycle” codes to each record. The criteria included TV viewing patterns, types of newspapers read, number of children in the home and income range.
The data was then grouped into eight marketing segments, and lists based on those variables were acquired from information services company Experian, Orange, CA.
In addition, magazine lists and other response files indicating various life cycle events were brokered by Burnett Direct Inc. of Farmington Hills, MI. These prospects included new movers, parents, homeowners, parents with children in college and newlyweds. Block sought people who had experienced such events in 2001, the year for which customers would be filing tax returns.
Eighty percent of the mailing dropped to the Experian names while the other 20% reached life stage prospects.
Meanwhile, 84 versions of five creative pieces used last year grew to 99 versions of 19 different pieces for the 2002 campaign. The 6-inch-by-8-inch trifold pieces focused on various life events while introducing H&R Block's products and services.
The mailings, mostly acquisition, dropped during a two-week period in late December and mid-January.
One piece targeting recent movers read: “New digs? New deductions!” It reminded both prospects and existing new-mover customers of the tax benefits of a recent change of address. The piece also promoted a Refund Anticipation Loan — walk in with taxes and out with a check — and laser printed the addresses of the two H&R Block offices nearest to the customer's new home on the back of the piece.
The cover shows the image of a smiling young girl seated on a couch being carried by two men across a sunny street. Another man follows behind carrying an orange chair over his head.
Some new-mover pieces also featured retention and win-back offers, and a sweepstakes. They also offer upgrades in service.
Another piece targeting new parents reads “Babies don't come with instructions. Fortunately, H&R Block does.” It acknowledges that families with new arrivals have had a busy year — and higher expenses. The piece promotes Block's financial advice.
“We're really trying to focus on the messages to key segments,” Sevcik said.
While database analysis helped Block get the right message to the right person, it also enabled the company to determine that some customers should no longer be pursued because Block didn't have a relevant product to offer them. Other customers were migrated to services thought to be a better fit.
“We're much more sophisticated about understanding the customer and prospect and communicating what message is most relative to them,” said Heather Warren, strategic planner of direct marketing for the H&R Block account at Campbell Mithun, the firm's agency of record. “So often we were making assumptions. Now we know where we're over-represented and under-represented.”
The campaign included several other elements including direct response print ads (both magazine and newspaper), Sunday supplements and outdoor and radio ads.
Block also ran some branding spots on TV.
A partnership with America Online provided exposure for Block at AOL Web sites. In addition, the firm sent four rounds of e-mails to lists of AOL clients.
Another acquisition e-mail went to names ordered from Bigfoot Interactive based on P$ycle codes.
Those who didn't respond received a second e-mailing two weeks later.
And, as a value-added perk to the TV time bought from CBS, Block was able to slip a sweepstakes offer into 36 million Val-Pak envelopes. These pieces, headlined “Many Happy Returns,” featured a grand prize of $100,000 to help pay for taxes for the next 10 years. The piece drove entrants to register at the Web site or to write in. The offer was promoted on Val-Pak's outer.
Though the tax season ends April 15, Block plans to continue direct mail advertisements and general ads, focusing on its Financial Advisor service.
“You get to April 15 and all of a sudden [customers and prospects] say ‘I don't have to think about [taxes] until next year,” Warren said.
“It's a way to keep awareness in the market.”
