Did you know about 84 percent of taxpayers filing Jan. 1 through Feb. 15 receive a refund, compared to only half of those who file in April? Or that it’s estimated that Uncle Sam will pay out $230 billion in federal tax refunds to U.S. consumers this tax season? The average refund in 2012 was $2,700 per household; and your customers are receiving an influx of cash in a short, predictable timeframe. The bottom line is simple: tax season isn’t just for accountants and tax software companies, it’s for all marketers.
Think about incorporating tax refund season into your long-term editorial and promotional calendars just as any other seasonal event like Mother’s Day.
Search Trends During the 2012 Tax Season: Two Peak Times
Bing Ads put together an analysis of search behavior during the 2012 tax season (PDF download) that shows two clear peaks in search activity. The peaks correspond to Jan. 30 when the IRS typically begins processing returns, and the filing deadline on April 15.
A study from American Tax and Financial Center at TurboTax gives us an interesting view into the households filing early and their motivations. They say 84 percent of taxpayers filing Jan. 1 through Feb. 15 receive a refund, and those who file prior to Feb. 15 mirror the profile of a paycheck-to-paycheck household. And they also claim refunds are the primary reason taxpayers file returns by mid-February.
In marketing, timing matters. What does all this mean during tax season? Well it means cash starts flowing into the pockets of our customers around Valentine’s Day and well into May.
- The IRS typically starts processing returns Jan. 30 (refunds are typically processed within 21 days).
- If you file electronically it’s 8 to 14 days, and it’s estimated that nearly 62.5 percent of Americans will file electronically this year.
- And the National Retail Federation (NRF) estimates nearly 60 percent of Americans have filed their taxes by March 1.
How They Plan to Spend the Refund
Tax refunds provide one of the largest single paydays for average American families, and the NRF expects nearly 24 percent of families to use their tax refund to purchase a large household item or even take a well-deserved vacation.
Clearly, this is valuable information for car dealerships, electronics retailers, travel agents, and appliances sellers (to name a few).
Quick Search Marketing Application
Your customers are getting extra cash, they’re spending it on your products, and now you have to reach them. In search marketing campaigns, you may see higher conversion rates or more click volume on big-ticket items. You can consider customizing your ad copy, site links, or landing pages to highlight your top suggestions of where customers should invest their refund check.
See the full agenda.
As usual, some networks will index higher for your target market than others. Sticking with tax and search marketing, Bing Ads sees a 50 percent+ increase in its share of clicks vs. Google for the tax-related searches this time according to a 2012 comScore study (going from 23 percent to 35 percent of tax-related clicks). This is because Bing Ads’ audience skews to users who typically have higher incomes ($60,000+), and are older (25+). Whether it’s search, display, or mobile ad networks, think about where you’ll find your best return.
Think about your business and customers, ask how they’re impacted by tax refunds, and then determine where tax season fits into promotional calendars. After you’ve figured that out, the next step is to determine what do to with your refund (if you get one).
Tax Refund image on home page via Shutterstock.
What are some of the major developments that are likely to shape multi-channel marketing in 2017?
Time is running out to feature your company in our inaugural Mobile Vendor Reader Survey.
Marketers create personas to better understand their target audience and what it looks like. If marketers can understand potential buyer behaviors, and where they spend their time online, then content can be targeted more effectively.
What’s behind a successful data-driven marketing strategy?