Taxathon: Herding hippo clients
Practice owner Susan Rahman explains how likening clients to the characteristics of animals have helped her cajole even the ‘hippos’ into delivering their tax returns early.
It’s been a slow month for the Taxathon (a race to submit all tax returns before 24 December) albeit through no fault of our own: of the 132 tax returns ready to go only 84 have been submitted, while 48 are being delayed by clients.
Here are how many tax return we have left to file before 31 January:
- 227 tax returns
- 19 new tax returns
- 246 total number of tax returns to process
- 132 completed tax returns
- 114 tax returns to do
Some clients aren’t signing off. Some are raising queries. Many just think they have time. “It doesn’t have to be in until 31st January, right?” is a common refrain. Some clients believe that if they submit too early, HMRC will demand payment early as well. Making Tax Digital will be a bit of a shock for them.
It’s annoying, but at least they’re done and with a bit of educating, nagging and cajoling we should get all completed tax returns submitted by the end of October.
Now on to the balance of 114 tax returns left to do, or as I am calling it: “herding the hippos”. If you’re wondering what I mean, read on. All will become clear.
Hitting our Taxathon target depends on getting the papers in on time. We needed a deliberate and systematic way of encouraging our 'once a year clients' to drop off their papers.
We’ve already been using Onkho’s automated reminders to get papers in on time to hit regular and tight deadlines eg VAT, payroll etc. But with personal tax returns, clients need reminding more often. Its only natural that clients’ sense of urgency is driven by the proximity of a deadline. What we needed was something similar but focused on the Taxathon.
In Onkho we created our own custom Taxathon papers reminder service. It has five non-billable steps and is allocated to admin staff. We gave each step a different and fun name because we did not want clients to see an email from us and switch off. Let’s just say the email headers are “cuddly” and odd, but we got a good response from over 80% of clients. Here’s the process:
- Tickling Time: Making clients aware that the tax year had ended and that they should start thinking about getting their papers together.
- Teasing Time: Telling clients about the Taxathon and that we wanted them to be part of our achievement and not the reason why we failed.
- Bribing Initiatives: Telling clients that if they helped us get their tax return in before 31st July, their second payment on account may be reduced. Even if it wasn’t reduced they would still have at least six months to make sure they had enough funds to meet the 31st January payment deadline.
- Guilt Trip: Thanks to the quarterly courtesy call service we created in Onkho, the team enjoys great personal relationships with our clients. We do this even with the 'once a year' clients to make sure they don’t forget about us and go elsewhere. Leveraging this, we sent postcards with a picture of the team looking sad and forlorn next to a Christmas tree because they were going to have to work through the holidays. Most included handwritten personal messages.
- Gunning them down: This is the very last resort. It’s when we bring the big guns out – apparently, that’s me. The team says that if I ask clients to do something, they do. Well, we will put that to the test over October. I’ll let you know how true that is in next month’s blog.
As a result of the process, we received over 80% of papers by 30th September.
Now on to the hippos. Last month I was at the TAG conference and was lucky enough to listen to Nigel Risner. He said that by likening a person to an animal, you can use the characteristics of the animal to work out the most effective way to communicate with them. Novel - so I thought I would give it a try.
By the way, I thoroughly recommend Nigel’s talks – catch him in person or on YouTube. He’s extremely thought-provoking, engaging and very funny.
We categorised our clients according to how they had responded to our paper chasing Taxathon paper chasing process. We saw patterns in their behaviour and here they are:
Panthers are focused, punctual, good communicators and give you more information than you need. They understand their business, the importance of numbers and work with you. Panthers use your service in a way that makes being an accountant exciting.
They call you before making any major financial decisions, they keep you in the loop and they think of you as an extension of their business and not a necessary evil. Panthers are the ones you want to keep because they hold you accountable and you strive to get better. Panthers keep you on your toes. Panthers delivered their papers by 31st May.
Monkeys are excitable, playful and often unpredictable but fun to have on the books. Monkeys will play with you but only after a bit of coaxing and cajoling. While you may not get all the information you need straight away, a few gentle nudges make them feel important and usually does the trick.
Monkeys may or may not involve you in major financial decisions, but they have great instincts about how their business is doing. The work we do validates what they know. Working with monkeys is relaxing and fun. They test us but they don’t always help make us better. Monkeys delivered their papers by 31st August.
Hippos are exactly as you imagine. They’re underwater 90% of the time and only surface when absolutely, necessary. No amount of coaxing, cajoling or threatening will make a difference. Hippos don’t respond to any form of communication until they are ready and when they are ready, they’re demanding and a little ferocious.
Hippos give us their papers at the eleventh hour, in a black bin liner and have to be chased, for approvals at 23:55 on 31st January. Hippos may not be the ideal client, but if as a herd they bring in north of £25K they might still be worth the aggravation. Alternatively, we might consider replacing them or charging them more. Hippos are the target for “gunning down”.
We did not have accurate data until this year, but the team recalls that the hippos were the same clients that kept them up at night last tax season. I was tempted to simply get rid of the hippos but for cashflow reasons, I can’t afford to. What is clear to me though is that they’re not paying enough – that’s because, for the first time, I can count the cost of chasing them. I don’t have enough insights to take any decisions right now so, for now, we will just have to carry on.
However, using Risner’s technique and identifying what type of animal each of our clients is means we can now make informed decisions about how to work with them, the kind of communication they require to get the best out of them and the fee to charge them.
In a business, we need all types of animals and having a hippo is fine, as long as we are making money. After all, in Risner’s words “it’s a zoo around here”. All we accountants need to do is tame the animals.
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