HR Block 2006 Annual Report Download - page 14

Our tax professionals are closer to their communities every day as a result of the expansion
of H&R Block’s U.S. retail locations. The convenience of our locations is a competitive plus.
In tax season 2006, the company and its franchisees grew to 12,165 locations from 11,161
in 2005. About 25 percent of the additions are shared locations primarily in Wal-Mart and
Sears stores, bringing us to where clients shop or work. The expected payback in profits
builds as new locations gain incremental clients over several years. But clients reap the benefits
immediately via shorter travel time, prompter service and easier scheduling of appointments.
Convenience also means that clients can select the tax preparation service channel they
prefer. H&R Block is the only company offering both services from its own tax professionals
and the choice of a digital do-it-yourself software product or Web-based online program,
both under the TaxCut®product name. Our research shows that as their tax situations
become more complex, our digital clients tend to migrate to an H&R Block office
professional for assistance, based on brand awareness and trust.
We can even blend our tax professional service with our digital channel – an increasingly
important differentiator for clients. Our Signature service allows TaxCut®clients to work on
their taxes at home and then have a tax professional review, sign and electronically file the
return. With our Ask a Tax Advisor service, digital clients can choose phone or e-mail for live
help from a tax professional. In tax season 2006, we set ourselves further apart with Worry-
free Audit Support™
. It’s free, and it provides TaxCut®clients advance support and even
representation before the Internal Revenue Service if a paid return e-filed through us is
selected for audit.
To enhance user experience, we’ve been remaking the look and feel, navigation and
language of our digital offerings for ease of use. More client interactivity makes questions
and advice more relevant, and it helps streamline the process. We also led an industry shift
to bundle state programs with federal for one low price with no mail-in rebate.
Clients served with TaxCut®software or online programs surged 23 percent in fiscal 2006.
The increase reflected an integrated marketing and brand-building campaign as well as
product improvements. The gain in our digital business was the key to H&R Block’s increase
in total tax clients served in fiscal 2006 as the tax services market continues to evolve.
REFERRALS AND RECRUITING BENEFIT FINANCIAL ADVISORS
Referrals from one H&R Block branded business to another are helping us to grow. We’re
doing especially well in building individual relationships between tax professionals and the
financial advisors of H&R Block Financial Advisors. The PreferredPartner Program has
increased tax professionals’ effectiveness in identifying and referring clients to the right
TOM ALLANSON
Senior Vice President and General Manager
Digital Tax Solutions
Though most people aren’t tax experts, tax
season 2006 showed a 16 percent rise
nationwide in returns self-prepared with
software products or online programs, and
then filed electronically (according to
H&R Block estimates based on IRS data).
Digital, in fact, is the fastest growing
segment of the tax market, and H&R Block
is well-positioned in this segment.
You don’t need to be an expert to use a
TaxCut®digital application. Our clients
served grew 23 percent in fiscal 2006. As we
improve the digital experience for TaxCut®
users, we go to market with a distinct
competitive edge – an office safety net of
thousands of tax professionals ready to
help digital users with blended channel
service. And when a digital client’s tax
situation calls for fully assisted service, we
look for the client to stay with H&R Block,
the brand they’ve come to know and trust.
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