3 things Turbo Tax does to make $1.5B in 15 weeks that you can too!
About Turbo Tax
Turbo Tax was founded by Michael Chipman of Chipsoft in the 1980s. Intuit acquired Chipsoft in 1993 and it became a division of Intuit offering US tax accounting. Turbo Tax’s business model is simple: every year, they release a new version of their program sometime in January or February, to take into account the amendments that the IRS put in place throughout the year. Between mid February to mid April, the deadline for filing tax, there is a flurry of activity in the market. Everyone needs to file their taxes, and the US system is not as simple as ours is in Singapore. Hence, there is a need for help like Turbo Tax. And Turbo Tax offers a simple step-by-step process for individuals and small companies to follow to file their taxes. While Turbo Tax is not perfect – there are literally millions of different combinations of people with myriad nuances in their employment status – it has served a majority of people quite well, earning them close to $1.5billion within the 15 weeks leading up to tax day. Not a bad business model, don’t you think?
Let us dive deeper to peer into what Turbo Tax (TT, for short) does and let’s see if we can’t replicate these ourselves…
Profiles, Personas and Pain Points
During the off-season, TT dives deep into the repository of customer profiles to understand better who their customers are and what issues they faced when using Turbo Tax. These were all logged into a customer database during tax time and are now uncovered as they dive deep to identify nuances. These nuances translated to personas which will then drive the next segment of their study.
After having dove deeper for the personas, TT takes each of them and goes broad, identifying as many potential solutions to customers’ pain points as possible. The brainstorming leads them to a map of “recipes” (aka hypotheses, in our language) for their operating personas. In fact, TT will come up with a set of different recipes for each persona, leading up to thousands of different process combinations at the start of tax season!
When tax season comes, TT moves into rapid experimentation, siphoning a percentage of traffic for each persona to the different recipes and logging their “pain”. They then identify which recipe works and which don’t and winning recipes then act as control for the next week’s set of recipes. On and on they go until the number of recipes is whittled down into a stable set, which by weeks 7 and 8, will be able to handle a large portion of the remaining TT users. By then, the number of “pain points” would also have dropped.
This is then repeated the next year for another $1.5billion.
You can do it too
Of course TT has considerable means to do this but the concept is no different between a company running a $1million business and one that is running a $1.5billion business. Here’s how you can do it
1. Personas. Create a set of personas for your business and identify their pain points. Remember, a persona is not a market segment; if anything, you can view them as representatives within the segment.
2. T-shaped solutioning. Only after you intimate the pain points of your personas would you be able to go wide with the solutions. This T-shaped process will ultimately cause you to have different sets of solutions for different personas, what TT terms as “recipes”. You too need to have your recipe cards.
3. Rapid experimentation. In TT’s case, theirs is extremely rapid and I am sure they have hundreds of people working on the experimentation process alone. Yours does not need to be so rapid, but the point to be made here is the need to pivot. If one thing does not work, move onto something else. Don’t get stuck on one frame, on one recipe. Find the most stable recipe for you set of personas.
Perfecting along the way
Yes, I know. It is scary to put out a product that you don’t know will fully meet the needs of your customers; if it will make everyone satisfied. The fact of the matter is, you will NEVER know. Hence, rather than wringing your hands – and your mind – for the perfect solution, make it as well as you can and then put it out there. Get your customers to feed back to you and make the adjustments on the spot. With many more eyeballs out there, they will be able to spot your imperfections much faster, and much cheaper, than you can for yourself. You don’t have to be perfect, just perfect yourself along the way.
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