Laura Cisneros Case-Study H&R Block 14/09/17
H&R Block have positioned themselves to be a leading brand in income tax preparation services – being the most thought of establishment for Canadians. Their current approach engages by establishing an emotional connection between people and the experiences they they’re owed by giving them back income.
H&R Block Case Study From Brick and Mortar to Online
This case study explores upcoming disruption in the financial model; such as digitalization, and change in consumer behaviours – while taking in mind the intrinsic values that make people attached and engaged to a brand or service. By outlining several brands that have gone through these shifts – we can begin to see what H&R can adapt to engage the new wave of tax filers.
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Understanding the current space of Brick and Mortar and Online Presence The following market research is focused on brands that are similar in success to H&R Block’s household name presence. These brands, although different than H&R Block’s industry, could potentially be a source of inspiration – as they have been successful in growing from brick and mortar to online.
Looking at examples beyond the financial industry will allow us to understand the diverse opportunity for partnerships or methods in engaging users.
Summarized “Touch Points” identify the main themes that have helped the brand in success.
Market Space
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Current Market Examples
Market Research | Sephora As one of the first stores to generate a self-service, Sephora is always at the forefront of new tools for this model. Sephora’s main objective is to build relationships with its consumer base, giving users different experiences through its ominchannel and generating unique moments in each medium.
Their slogan Beauty Together is heavily endorsed in their costumer relationship. Beauty Together means sharing a space (whether it be in store or online) with people who have a passion for beauty and make-up. Even if a user is lightly interested in these subjects – the community behind the brand anchors consumers into the brand.
In stores you can see this by observing people trying products, as all products have a hands-on approach. Sephora has realized that beauty products can only go so far if the user is unfamiliar on how to apply it; thats where their approach of “Teach, Inspire, and Play” comes in, by hiring make-up artists to bestow knowledge to the public on how to apply make-up the right way Sephora generates loyalty and trust – they are viewed by the user as a brand that cares end-result of the tool they are selling, not just the product sales.
Touch-Points
• • • • • • •
Intrinsic Value created through relationships
Community based
Democratized knowledge
Deep alignment between brand and costumer experience
Tailored experience
Multi-sensorial omnichannel
Beginning to experiment with Augmented Reality, Virtual Artist (facial scan to try on make-up from mobile device) grew to 3.4 million visits and 753,000 basket items
In their online channel, you can witness the community through the masses of Youtube and Instagram influencers that rave about Sephora Hauls (buying large amounts of the product). Or through their award winning and innovative Skin IQ – which partnered with Pantone scans a person’s tone to generate the best possible matches. Giving people fewer yet more tailored choices reduces indecisiveness on purchase and creates a sense of trust for the brand – as consumers sense the individual relationship that Sephora builds with them.
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Current Market Examples
Market Research | Warby Parker Warby Parker has established themselves as an independent brand in the empire of the eyewear business. By cutting out the middle-man, Warby Parker allows consumers to have a broad range of stylish options at a fraction of the price in comparison to centralized brands.
Started primarily online, Warby Parker recently opened their own brickand-mortar shops with optometrists. The offline retail environment caters to the a market unfamiliar with the online brand. It hooks consumers through foot traffic, only to reel them back to its online presence. All transactions are done online via their website.
Their human-centered product understands that at the heart of every experience is a human being. Whether on a social network, cell phone, or buying a product.
Their motto: “Buying glasses should be fun and easy; it should leave you happy, looking good, with money still in your wallet; and everyone has a right to see.” Proves that Warby Parker’s main strategy is to cater to help others, using a buy-one-give-one model, and providing people with affordable style.
This empathy towards the consumer and those-less-fortunate gives Warby Parker a unique angle on how brands can be caring.
Touch-Points
• • • • • • •
Online as central base, offline retail as branch.
Point of purchase remains online even with foot traffic.
Empathic corporate responsibility
Small number of competitors Experiments with interactive online purchases
Focused on shopping experience ex. Full length mirrors “you’re an entire person, not just a head” Access to costumer accounts – allowing tailored suggestions
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Current Market Examples
Market Research | New York Times New York Times is the poster child for a company that has endured disruption and has adapted to the presented mediums. Although they are keeping up with the current model of digital journalism, they understand that more changes are coming and they have begun to plan for these changes.
The biggest disruption that New York Times predicts for journalism is the decentralization of information. A recent report outlines a plan for 2020 and an initiative to tackle this wave of change by being an instigator of shift – rather than a follower. By distilling a large net around varied mediums of journalism they become can become decentralized and cater to different niches around the NYT umbrella.
Transparency is also very important for the brand – current political matters have expressed distrust in media and journalism. Experimenting with user created content and events to bring in Q&As, training sessions on writing and photography will provide transparency to the public about the process behind the NYT.
Touch-Points
• • • • • • • •
Curating news feed for individuals
Community involvement
Democratized knowledge
Umbrella of the brand
User generated content
Developing newsrooms and journalism processes for online content – division between mobile and desktop.
Large number of competitors
Use third-party platforms to show content “Andrew Phelps created a Flipboard magazine of our most important obits of the year and it became the best-read collection in the history of the platform.”
Readers also have come to expect a two-way relationship with articles (quizzes, comments, contributions) and constant engagement from the brand is key to keeping a conversation with readers.
The New York times is currently working on developing a newsroom that is strictly made for online mobile content, meaning that they’re developing stories that are made for shorter reads – while still keeping it’s values of informative world class journalism.
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Understanding the current space of H&R Block H&R Block sits as both – a financial institution and retail service brand – this creates a unique ecosystem that can take advantage from service innovation and begin to experiment with the upcoming financial disruptions.
In order to understand who H&R truly is a short study has been conducted. It is based primarily on trends that can potentially impact H&R’s ecosystem, the cultural environment that H&R is navigating in, a short competitor analysis, and what the general public currently thinks about the brand.
H&R’s environment
Having access to this will enable us to understand the many opportunities that H&R Block has to engage users in their online presence.
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H&R Block’s Current Space
H&R’s desired Playground
+ Empathy Globalization in Citizens Loyalty
Social collaboration Personalized content Online/Offline Synergy
Word of mouth
Influencers Data Transparency
Knowledge Base In-store digital
Pop-ups
Subscription-based
- Technology
Brand Relationships
+ Technology Autonomous
Co-Op Ownership Virtual sales force
Augmented shopping Online banking Frictionless shopping
Marketplaces
DIY Taxes
Insights through Big Data
Click and collect
Contactless payments
- Empathy
Real-time analytics
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H&R Block’s Current Space
Trend Mapping
Personalized Content | Value without the price tag The rapid growth of the sharing economy and new labor opportunities such as Uber and Airbnb can add further shifts in the way that tax-filing is generated. As of the moment – Canadians are not required to pay or receive refunds taxes for either of these services, even though they are using outside elements that are taxable – such as gasoline for an Uber car, property taxes; etc.
Ex. Airbnb Vs Hotels
Autonomous | Anticipating Needs Driving from elements from the sharing economy – an autonomous system will emerge our mundane objects in communication with each other to better understand who we are and our behaviour patterns.
Ex. Google Home
In Store Digital | Synergy As societies are transforming new destinations approach and expand needs. Occurring shifts are usually ephemeral, leading to a new economy in the digital space – based on behaviour and quantifiable data. The new costumer expects companies to be powered by a digital core – and bring efficiency, speed, and a more intuitive way of consuming.
Ex. Amazon Grocery Store
Augmented Experiences | Body as Data The rise of augmented reality caters to the body. You body is your password to your networks and who you interact with. All the tools that augmentation brings will be unique to you as a way to prove your authenticity, and your authenticity will provide services to avoid becoming a commodity.
Ex. iPhone X
Globalization | Connected without borders Canadians pride themselves on diversity and being citizens of the world. With the rise of freelance employment and the opportunity of becoming digital nomads – income taxes are often confusing.
Ex. Digital Nomads, Freelancers, Multi-Citizens, New Immigrants
Social Rise | Economy of Relationships Brands are beginning to establish themselves as authentically there for you. Social capital is on the rise, and with it the near end of word-ofmouth, by replacing it with online influence from relatable personas who contribute to the narrative of a brand.
Ex. Instagram Influencse
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H&R Block’s Current Space
Cultural Implications
Economic Changes | Untaxed Income The rapid growth of the sharing economy and new labor opportunities such as Uber and Airbnb can add further shifts in the way that tax-filing is generated. As of the moment – Canadians are not required to pay or receive refunds taxes for either of these services, even though they are using outside elements that are taxable – such as gasoline for an Uber car, property taxes; etc.
Ex. Uber vs. Taxi debates
Intrinsic Value | Data and You As societies are transforming new destinations approach and expand needs. Occurring shifts are usually ephemeral, leading to a new economy in the digital space – based on behaviour and quantifiable data. The new costumer expects companies to be powered by a digital core – and bring efficiency, speed, and a more intuitive way of consuming.
Ex.
Core Needs | Safety In the era of mobility, people seek convenience and on-the-go comfort, Being completely quantifiable however, can generate feelings of uneasiness as intrinsic satisfactions are not being met. To make sure that these needs are met – brands must look towards generating intrinsic value through narratives, story telling, and tailor-made experiences.
Ex. Sephora: Beauty Together
Behaviour Shift | DIY Revolution Although 80% of taxes by Canadians are done online – H&R Block is seeing a slowing growth in it’s online sales. This is mostly due to competitors like Turbo Tax – which have capitalized on the growth of DoIt-Yourself users.
Ex. Turbo Tax
Gender Differences | Inquisitive vs. Unconcerned There are big differences when it comes to filing taxes for men and women. According to a study women tend to be more involved, and are more inclined to ask questions to their accountant of facilitator.
Ex. “The woman is a teacher who could claim certain expenses for driving her car to work. Her husband is not a teacher, but does work for an employer. She asked us if her husband is also eligible for this same deduction because, like her, he drives a car for his employer and has lots of expenses.”
Decentralization | Independent Trust The rise of crypto-currency and financial technology markets allow people to engage in trade directly with each other. Instead of relying on the centrally-controlled servers of the companies
Ex. Bunz
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H&R Block’s Current Space
Turbo Tax
Competitors H&R Block holds many competitors in independent tax software – there are countless of Canadian and international companies that are competing for software DIY tax filing. H&R Block comes as an afterthough to many people since they are not free-to-file as many of the online competitors are. H&R Block is also mostly known for being the “McDonald’s” to tax filing, and for in-person consultations.
Pros: Extremely user friendly features, such as deduction finder, error double check and import of previous year. Completely DIY with embedded help from the software.
Complaints: generally designed for one user to do one return, difficult to jump or return through the procedure.
Freshbooks Pros: Web based, iPhone, and Android App. Catered to Freelancers, small and mid-size businesses. Has online support, phone support, knowledge base and video tutorials
Cons: No estimation given, people generally express it to be an application created mostly for self-employed people.
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H&R Block’s Current Space
Tax Filing User Journey
Prompt
Define
Activity
“I have received my T4s” “My friend just received A lot of money in their Tax return! ”
Touch Points
Emotions
“I really want to pay back some debt”
Looking at competing services “Tax return and filing is confusing, Too many options out there” Do I want to DIY or a facilitator?
Choose
Prepare
“Need to know how to choose the right service for me”
Gather documents and forms needs for return.
1. Narrow down information 2. Does this apply to me? 3. Consider preferences 4. Choose a service
Process
1. Search through paperwork and online systems 2. “Will I be eligible?” 3. Talk with people in similar situation
“I did it!” DIY Tax Filing
Facilitated filing in store
Overwhelmed with information and competing brands
Online and Paper tax T4s
Tax refund processed in store or having to wait Share experience with friends, recommend chosen process or wish they had chosen something else
“I did it! and I never want to know about this again!
Inspired Hopeful Low stress
Mobile/ Desktop Google Searches
Complete
Feeling of skepticism. Realizing that payment needs to be done.
Google to search for best options/reviews Word of mouth and recommendations Mobile/Desktop and Human Interaction
Understanding it will be time consuming and complicated
Needing help from facilitator/advisor Google Search, in person questions with people in similar situations
High stress in document gathering.
DIY: High Stress, High Knowledge “Not sure what these brackets mean”
Facilitated: Low Stress, Low Knowledge “I'll leave it up to the facilitator, but I’m not sure what they’re doing”
Online: E-tax software Knowledge Base Offline: Facilitator Knowledge only if enquiring and through friends/ family in similar cases
Online: finish point of e-tax software, bank account touch point Offline: receive money in store, through direct deposit or cheque
H&R Block’s Current Space
DIY | Independent “When I tried running my taxes through H&R Block, the software prompted me to make an appointment with a consultant in store, which defeats the purpose of me doing it at home.
For the overall convenience of completing my taxes from the comfort of home, TurboTax continues to be my preferred system.”
Ellen H. 65, Retired
People: Thoughts on H&R Block From a small pool of people in a wide-range of socio-economic and age groups I have asked for their thoughts on facilitated tax.
The types of questions that were asked related in general to their experience in filing taxes – I discovered this to be a key area as it facilitates an observation in the cultural space that H&R Block holds with people. By analyzing the following points H&R Block can improving customer-brand relationships (a growing trend in service online and offline)
• • • • •
How do you generally file your taxes?
Have you tried alternative methods?
How was this experience?
What was the best/worst part about it?
If you could change something about the experience – what would it be?
From the answers I received I gathered four types of personas that H&R Block may design for.
Leave it and Forget it | Wants no part in tax processes “Honestly I just don’t want to know anything about my taxes, I just go to the pop-up booth at Walmart and I file it there. But one of the things I didn’t like about them was that they quickly circled what my taxes were about on the return sheet I got. I didn’t understand. I wish they were better at communicating what part each means – especially because I’m new to the country and I don't know much about taxes.”
Juan V. 22, Student
Helicopter | Must know everything about a facilitated process I really want to know everything that I can about filing my taxes, I feel like the more I know the more I’ll be able to gain – even if I do it online or in person. If I know what each section means I’m sure I can get the most money I can.
Charles N. 28 Software Engineer
Skeptics | Sees no value in centralized corporations. “I feel like if I go to H&R Block I’ll get ripped off, they’re such a big company and I just don’t trust them, plus I can probably get a lot more money if I file my taxes myself. It’s actually free and I do it through UFile”
Eva D. 42, Nurse
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Insights
Borrowing and Differentiating
Three identified opportunities for H&R Block were identified within the previous analysis in cultural implications, trend mapping, and interviews with users.
The opportunities and thought starters following also borrow strategies from the Market Research that was conducted in a way to generate a different type of value to H&R Block than what the current competing brands have.
Most of the competing brands at the moment are focused on cheap, quick and unpersonalized service – and H&R Block should differentiate from them in this space by distilling a human-cantered focus on the overall experience of taxes and demystifying knowledge.
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Insights and Thought Starterss
Building Relationships A rising trend is an individual and empathetic take on costumer relationships, and a close bridge between brand and individual.
This model can be seen with Sephora and Warby Parker – both brands have thrived under the try before buy method and both brands have built a cult-like following because of it.
By developing methods that can cater to the user individually – H&R Block can gain the trust of future tax filers and can be seen as a trust worthy place to file taxes.
The current model of H&R’s strategy places themselves as empathetic and giving people back what they’re owed – this however, establishes a relationship to a once-a-year ephemeral transaction.
Touch-Points
• • • •
Intrinsic Value created through relationships
Deep alignment between brand and costumer experience
Tailored experience
Value without the price tag
By becoming a place where people go to for financial advice beyond once a year people like Juan S., who are new to filing taxes and to the country could benefit from this model.
How might H&R block become the place for financial advice and forge relationships that go beyond once a year?
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Insights and Thought Starterss
Umbrella One of the issues that Juan S. (A newcomer and someone with a uncomplicated tax return) encountered when filing taxes with H&R Block was the jargon that was used in the explanation of the documents after he was done filing his taxes with a facilitator.
This made Juan S. feel helpless and confused about the process – leaving him to wonder if the money he received was really the amount that he deserved. This same process left skeptic Eva D. felt like doing taxes with H&R Block meant “getting ripped off”
By using the New York Times approach in the decentralization and democratization of information users can begin to feel confident that the process their money goes through will be the very best that they can receive, thus demystifying taxes.
Touch-Points
• • •
Decentralization of information
Empathy
Transparency
Distilling transparency and empathy in the filing system will generate trust – as most people remain unaware as to about how much money they’re owed and why.
How might H&R Block demonstrate full transparency to potential users?
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Insights and Thought Starterss
Empower through Knowledge Sephora’s Teach Inspire and Play facilitates users to master techniques with a product, and thus getting the most out of the tool that is being purchased.
This technique can also help H&R Block - as most of the public still remains in the dark about how to file their taxes. If people are more aware of where their money is meant to go, and how that will affect their tax return they may be more inclined to trust H&R Block as a brand that not only facilitates the filing process, but also teaches them to gain the money they’re owed on their own.
Touch-Points
• • •
Democratized knowledge
Online Personalization
DIY Mastery
This type of model could help people like Ellen H, who is an “independent” and wants to do things from the comfort of her home, as well as someone like Charles N. who is a “helicopter” inquisitive, and wants to know everything that there is about the tax process.
It is worth to mention people that are involved in the new sharing economy could also benefit from this thought, as their income and expenses can be unclear for a DIY tax software to pin-point.
How might H&R Block teach mastery in DIY tax process?
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Conclusion The discussed thought starters have been generated by keeping the user in mind always, by analyzing different personas that could interact with the brand, different trends and disruptions that H&R Block could face and looking at what the current market looks like in terms of retail and service.
The unique space that H&R block is based in – financial and service – allows room for experimentation. While their competitors seem to be getting a rise in usage, they remain cheap and impersonal. H&R Block can differentiate themselves if it brand doesn’t lose focus in understanding that in the end – it is people that are the market they are working for and by creating a unique human-cantered and empathetic experience they will retain their loyal costumers and gain engagement from new users.
People First
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Sources
Sites and Articles https://www8.gsb.columbia.edu/articles/brand-talk/warby-parkeroversharing-business-strategy
https://www.nytimes.com/projects/2020-report/?mcubz=3
https://www.scribd.com/doc/224608514/The-Full-New-York-TimesInnovation-Report#fullscreen&from_embed
 https://www.inc.com/kevin-j-ryan/neil-blumenthal-warby-parker-retailstore-design.html
https://venturebeat.com/2017/05/14/the-sooner-you-know-aboutdecentralization-the-better-you-can-adapt/
https://studymoose.com/a-case-study-strategy-at-hr-block-inc-essay
http://findependencehub.com/men-women-approach-taxes-investingdierently/
https://www.inc.com/kimberly-weisul/how-warby-parker-took-the-riskout-of-its-business.html
https://medium.com/@Magnr/centralized-vs-decentralizedbanking-5c2a657e94b7
https://www.prophet.com/thinking/2016/04/261-six-reasons-to-admirethe-sephora-brand/
http://strategyonline.ca/2017/05/05/retail-innovator-of-the-year-sephora/
http://strategyonline.ca/2014/08/15/bitcoin-and-the-future-of-money/
https://coincenter.org/entry/what-are-decentralized-markets
http://www.wikiwealth.com/swot-analysis:hrb
Books:
Kevin Kelly, The Inevitable