Gennaro De Luca is a certified financial planner, senior partner of Redwood Capital Management, and founder of TAXplan Canada.
We started our company in 1999 and did tax returns for financial clients as a value-added service. But we soon found that existing options for filing tax returns were not meeting the needs of the public. The Internet and online business had started taking the world by storm and things were changing.
Today, more than 80 per cent of tax returns in Canada are filed digitally and people's expectations are a lot different than they used to be when they look for someone to prepare their forms.
Canada's own Marshall McLuhan coined the term 'the medium is the message.' He was a man ahead of his time and foresaw that the medium influences how the message is perceived, a notion very a propos now as businesses big and small try to figure out how to grow in a digital world. We went through this exercise, too, and have learned some valuable lessons along the way. Here they are:
Know who your target audience is, listen to them, and give them what they want
The business world is full of examples of organizations and industries that failed to read their customers. In the early days of the Internet, the big banks were slow to react to the burgeoning online world and lost market share to competitors who understood that people were moving from term deposits and savings accounts to mutual funds. People's habits were changing, as they are now.
People today have lots of choices and little patience for technology that doesn't work and that doesn't meet their needs. They want their problems solved efficiently and quickly or they go somewhere else, which brings us to the next lesson.
Develop a personal relationship with your users at the grassroots level
This means doing research and collecting client information on those users in order to build their trust in an online world.
In our case we started doing this by visiting the alma mater of our founding partners – two university campuses – and doing tax returns for students. And not only that, we did those returns for free. It was a way to build a future client base and introduce young people – prospects – to our unique way of doing returns, which was to combine a digital online return with the services of a tax professional – a human being. And it worked, especially at the grassroots level.
Nowadays, digital technology is changing the way people see brands and, to paraphrase McLuhan, the technology has become the brand, which means it's how users see and think of your company.
Start slowly and streamline whatever you can to make it easy for the user
The ultimate challenge for success in the digital world is to develop a brand that lets users interact with you digitally, while not losing the human element. This is no simple task and many businesses have paid the price for making customers feel as if they are something less than individuals.
We used to do tax returns for our clients using fax machines and then it was by e-mail. We e-mailed them a digital questionnaire asking basic things (i.e., who are you filing for and what tax year are we talking about?). We did this through Google Forms to see how they would respond. A year after that we hired a software developer and moved our questionnaire online, citing a checklist of documents that customers needed so we could do their returns.
That involved a whole new set of challenges because no one knows your business better than you do, so we had to communicate what we were all about to that software developer.
Over the course of several years we eventually made the move to a full digital platform, but at no time did we ever forget about two key things, and herein is the final lesson, which just might be the most important one of all.
Never lose sight of your vision or your customers
This means stay true to your dream, remember who your customers are and don't get lost in the world of digital marketing, which if not done right can lead to a dead end. Put another way, you can spend a lot of time, effort and money on something that doesn't translate into sales.
It's all part of the trial and error that is often necessary in learning how to grow your business in a digital world.