Centro Information Systems' strategy: strength in numbers. Software providers were appealing partners, Lawrence says, and the distributorship paired with new customers by supplying software-compatible tax forms to software suppliers. Today, the company's six software partners have helped the firm win big business, Lawrence says. "We deal with companies that we never would have been dealing with," including the Denver Broncos and the Salt Lake Olympics Committee, he says. These accounts stretched Centro Information Systems' small-town reach, and earning the business didn't require cold calling or clocking miles behind the wheel.
Ten years ago, Centro Information Systems processed roughly 20 to 50 tax form orders. Today, it's closer to ten times that volume. "The trend is that employment is down so tax forms are down," Lawrence says. "But we have grown through relationships and leveraging the opportunity we have to contact our client base through our software partnerships."
Meanwhile, the information Centro Information Systems gleans from simply knowing which programs customers purchase lends Lawrence and the company's five other sales-team members background information to aid additional product pitches, Lawrence says. "Because they order tax forms, we have an idea how large their companies are," he says. "We may not know a lot about their business because the software could be a common payroll program. But we do know what software they use, and we can base our conversation on that to find out what their other needs are." Tax envelopes, payroll checks, accounts payable checks and standard business envelopes are some add-on products Centro Information Systems provides customers.
Lawrence says excellent customer service, especially crisis management during the "intense" year-end crunch time, breeds customer loyalty. These are highly skilled accounting professionals who are "terrified of buying the wrong forms, making a mistake and not meeting the deadlines," he says. "Frankly, the whole process for most people is surrounded by anxiety." Centro Information Systems simplifies the selling process by supplying software companies only with forms that comply with their particular systems.
Because the tax form selling season lasts from late summer through January, Lawrence says meeting with software companies before the rush ensures that Centro Information Systems provides its partners with forms that meet regulatory changes and software updates. "We work closely with [software companies] to provide them with information they need for a year-end mailing," Lawrence says, noting that he scores add-on sales with tax envelopes and invoices. Together, the companies complete tax forms research before July, print order forms and catalogs by August, and mail information to the software providers' customers in September.
The time constraint is "intense," and room for error is slight, Lawrence says. But necessity carves a lucrative market for tax forms of all kinds, no matter the move toward e-filing and laser-printed forms, he says. "It's an easy sell for several reasons," he says. "One, customers need them. They don't have a choice. Two, the forms are standardized. Three, it's easy for us to sell them because the software companies recommend us as the supplier. If customers don't buy from Centro, they won't guarantee the forms will work."
Knowledge Breeds Power
Michael King says he's a "small fish in a big pond." He provides tax forms only to accounting and insurance firms in Modesto and Sacramento, Calif. But his client base counts on him for tax forms knowledge. He admits that customers often call him just to get the scoop on tax form changes each year. "I'm a go-to guy for accountants," he says. "They will call and say, 'I hear there is a 1099 form that will be changed. Is that true?' They use me as a resource."
King, owner of Modesto-based Budget Tax Forms, is an accountant by trade. He started selling W2 and 1099 forms 27 years ago as an add-on service at his accounting firm. Today, he spends only 10 percent of his time crunching numbers; he dedicates the other 90 percent to selling and distributing tax forms.
"A lot of accountants will assign the duty of ordering tax forms to a secretary or bookkeeping clerk--the CPA doesn't always get involved in the ordering," King says. "I get a lot of calls from people inexperienced with ordering forms. They call and say, 'My boss said I'm supposed to order all of the forms and I don't know what we need.'"
In these cases, King knows what questions to ask: What kind of computer system do you have? Do you use multipart or laser forms? Does your program print the form, or do you still require printing for the boxes? He studies information his suppliers send him regarding tax form changes so he can communicate details to customers. And King draws from his own continuing education when he renews his professional accounting license each year by taking required classes.
Federal forms confuse many clients, but King keeps it simple. He orders in bulk from vendors, taking advantage of volume discounts and storing W2s and 1099s in his warehouse. "I ship orders fast, I maintain a stable price every year...and I take forms back for no reason at all," he says. "I don't require them to jump through hoops to return merchandise."
King says 90 percent of Budget Tax Forms' business occurs during a 4-month period, and the support he offers other accounting professionals supports his tax form sales. "A large part of my business comes from referrals," he says. "They photocopy my order forms and give them to their friends down the street."
Word travels. Referrals generate sales growth for King, who buttresses word-of-mouth marketing with direct mail fliers. He targets accountants through phone book searches and has purchased ZIP code lists. He doesn't expect wild returns, considering a 5 percent response rate successful, but he keeps the business he earns. This stabilizes Budget Tax Forms' sales in a market where technology and laser printing can erode business, King says.
Today, companies can choose to print W2s on 8 1/2 x 11-inch paper rather than using perforated forms. And because the U.S. Social Security Administration no longer requires red ink for Copy A of forms, customers easily can roll out W2s on their office laser printers.
Product diversity also helps distributors secure tax forms business, King says, noting that medical forms are lucrative sales he earns by asking accounting companies to offer order forms to their medical clients. And constant tax forms changes position distributors and suppliers as field experts if they're knowledgeable when they sell products. "If you can get customers the forms they need reasonably fast and correctly the first time, they will pay the right price," King says.
Selling at Face Value
Linda Swanson concentrates on counseling customers, not selling tax forms. Her face-to-face sales strategy seals deals and is part of "the whole magic," she describes, explaining that her database is filled with long-time customers, including some she has had for 15 years. "People buy from people who take care of them," says Swanson, account executive at distributorship Shamrock Solutions, Grand Rapids, Mich.
Swanson sells herself as much as she sells tax forms, a product she says boosts sales for Shamrock Solutions. The forms are an introduction to other products in the company's portfolio, including laser toner, ink cartridges and magnetic media.
Swanson sells 1099s and a variety of W2s to schools, manufacturing companies and small businesses. "In some cases, I'm in their offices two to three times a week," she says. "I treat customers like I want to be treated, and I take care of their needs. They know once they give me a job, they won't have to worry about it."
Face time during the tax selling process quells customers' insecurities with orders, such as whether forms will be compatible with their programs, which type of form will best suit their businesses and how many forms they will need. Swanson says close customer relationships pay off when they call her with questions. For example, when her largest customer, a transportation freight company, changed its order recently from mailers to laser forms, she coordinated a solution. "We got the laser forms in, but they couldn't get the programming done in time," she says. "We had to go with another laser form that was more compatible with the form they had been using. I got the catalog, made some suggestions, and they ended up choosing a form that had all of the information on one sheet of paper."
Swanson saved the firm from missing tax deadlines, and the freight company likely will order its standard 350 tax forms and special envelopes from her next year, she says. "I try to get catalogs out to customers in July, and I keep a history of each customer and which forms they order," she says. "From that point, the sale is very simple: Let them know there have been tax form changes, tell them what the changes are and get the forms ordered."
Change can be positive in the tax forms market, especially for distributors who can disseminate and ultimately sell information to clients, says Alber of Broker Forms. Though many printing pros expect electronic filing to replace paper forms eventually, the manufacturer has increased tax forms sales to its distributor customers from 19,000 to 500,000 in four years, she says.
5 Ways to Beat Tax Forms Stress
Tax forms crunch-time stresses many end users. These service-minded acts help:
1. Know what's new. Understand tax form changes and communicate these details in your tax forms sales approach. Manufacturers selling tax forms can help.
2. Make an online splash. Post a tax forms catalog on your web site so customers can view products easily. Distribute the catalogs in late summer, and market tax forms by calling existing customers and mailing fliers and other literature.
3. Spell it out. Walk customers through new catalogs, pointing out which products fit their companies' needs.
4. Ask questions. Ensure orders are accurate by prompting clients with simple questions: Do you use laser or multipart forms? How many forms did you order last year? Does your program print the form, or do you require printing?
5. Act quickly. Tax form orders are a last-minute task for many companies. Efficient shipping is crucial.
Additional pullquote
"It can be a good thing for us when the IRS makes changes. It gives distributors the opportunity to say, 'Make sure you are reprogramming and that you have this new format.'"
Suzanne Alber, Account Executive
Broker Forms, Green Bay, Wis.
