Taxing Yourself to Revenue
I hate to say it but government taxation is a necessary evil that is essential to your business. Paying your taxes is now thought of as one of the most heinous acts a person must do in their life, but you can use this hostility to your company’s advantage.
We all know the taxation system has been broken for quite some time. Many have lost faith in all tiers of government with its bureaucratic nonsense, unrealistic timelines and finger pointing. To a large extent, we can all agree that the government and its taxation policies have far outgrown what our founding fathers intended. The paperwork alone will bury a small business. I certainly don’t know a person who isn’t angry with both political parties for almost never striking a balance in Washington. And the divide only seems to grow worse each year. Clearly there is a strong dislike in the general population of paying taxes, even though we all know it is necessary. The thought that we are paying our hard earned income into a bureaucratic black hole with antiquated tax policies is flat out maddening.
Use the anger over taxation to your company’s advantage when marketing to your customers. Apply the government taxation card to your customer through a great marketing hack. Most people demonstrate the phenomenon of tax aversion and attempt to avoid paying taxes at all costs. So let’s use this psyche to increase your revenue.
Did you know research shows people have a stronger preference to escape tax-related costs than to avoid equal size (or larger) costs unrelated to taxes? Texas, for example, has a sales tax holiday each August when parents are shopping for back-to-school clothes. Texas consumers will spend a large amount of money buying clothes to save a mere 8.5% rather than save 20% at the sale that occurred just last week. There’s something about sticking it to Uncle Sam that makes people spend money. Think about it, tax aversion affects consumer preferences in numerous areas such as: in-store purchases, financial investments and job selection. Hell, something could be said that only a few years ago tax aversion played a large role in why the Internet initially became popular. Not only was it much more convenient and easier for commerce, it was tax-free.
Use this consumer behavior in your marketing and ease off the discounted sales in order to attract customers. Instead, offer “Tax-Free” in your marketing message. It could be for a day, applied to a particular item, bundled orders, etc. Strong research shows that customers would prefer to go tax-free and save approx 8% vs. saving 15% on a discounted sale, solely due to the nature of what the word tax relates to in the American psyche. You can’t use tax-free all the time, but when you do it’s a powerful weapon for driving revenue.
