How Do You Outpace Your Competition? Follow This Approach From TaxJar

As Benjamin Franklin once said, “There is nothing certain in life, but death and taxes”.

While that statement is profoundly true, I’m certain everyone can agree that there is also nothing more painful in life than those same two things as well.

Where there is pain, there is usually an opportunity.

Promoter.io customer, TaxJar, is a company that’s solving one of those pains.

TaxJar is a 21-person company, currently serving over 8,000 clients, largely in the e-commerce space, which helps their customers simplify their tax requirements.


Here’s an example: If you’re someone that sells products on Amazon, you can choose to send your products into Amazon to be fulfilled and shipped. Those products are then dispersed to distribution centers throughout the country in order to be delivered quickly to customers.

That’s great for buyers, because now they can get their goods in “Amazon time”.

But, it’s not so great for sellers, because now they’re selling products in more than just one state. And, each of those states have unique tax requirements. Queue the migraines, right?

Enter TaxJar

They simplify this entire process through automation, so their customer doesn’t need to concern themselves with multi-state tax laws. The buyer is happy because they’re getting their products quickly and the seller is happy because TaxJar is making their job (heck, their life) easier.

That’s a winning scenario for any successful company.

But, with over 8,000 customers, it’s extremely important for TaxJar to maintain a pulse on the health of their relationships with their customers, otherwise they can risk making a painful process even more … well, painful.

The team at TaxJar turned to Promoter.io and NPS to help understand the impact they were having with their customers as well as test some changes they thought might improve the tax-paying experience.

In addition, they wanted to implement NPS to both prevent future churn and put their promoters to good use.

Note: As we’ve mentioned in previous posts, on average, only 20% of any given company’s promoters will actively endorse or refer new customers without further communication.

Activating the additional 80% requires a company to proactively reach out to their advocates and make specific requests that can directly (and positively) impact the business. These requests may include customer reviews, social shares or simply asking for them to refer someone new.

Promoter.io offers custom “Thank You” pages to make the immediate connection between excited promoters and positive shares an easy task, which ultimately impacts organic growth.

The way that TaxJar started with NPS was a bit unique.

Prior to beginning the process, they had become aware of a big gap in their product offering. Or, at least what they perceived to be a gap. But, they weren’t certain.

The team at TaxJar decided to release a new version of their app to a select group of their customers to address the potential gap.

To properly measure whether this new version actually made a difference in customer loyalty, they decided to segment their NPS into two groups:

  • Customers who have access to the new version
  • Customers on their legacy version

What they were ultimately looking to see is whether customers on the newer (beta) version had a higher level of customer sentiment and loyalty than those on the older plan.

After the results were in, they were able to properly validate their assumptions when they discovered those that had access to their beta app gave them an overall NPS score in the 80’s (world class), while those on the legacy version scored them in the 50’s (still great, but measurably lower).

Note: For early stage companies, NPS is a great measure of PMF (Product Market Fit). After a tool is on the market, NPS can help you validate your ideas/assumptions via your beta customers willingness to recommend others.

As a process, TaxJar collects their data by surveying 200 randomly selected customers each month from both groups. Those customers then receive continual surveys every few months, allowing TaxJar to maintain an ongoing understanding of sentiment.

Measuring NPS is most impactful when you do it over time, but that’s especially true for TaxJar. With different tax laws and filing dates with each unique state, each customer has unique user experiences based on their individual tax situations.

Staggering their surveys has been critical success factor and value point as it has allowed TaxJar the ability to gauge the sentiment of their customers over time, both as the product matures and as tax laws continually change at the state level.

In addition to the insights they’ve gained from their customers, they’ve also been able to drive their business forward in several other ways as well.

TaxJar thrives on the reviews from their customers, especially since many of them are Amazon sellers, who deeply understand the impact that positive reviews and brand perception themselves.

Through their NPS campaign, the TaxJar team was able to identify their promoters and activate them by asking directly for reviews of their experience.

 

With detractors, they’ve been able to differentiate themselves from their competitors by personally responding to each piece of feedback and being attentive to their needs, getting ahead of potential churn before the customer has made that decision to leave or find another solution.

TaxJar operates in a space where their closest competitor is a large company with impersonal communication. They’ve used this to their advantage by giving their detractors (and promoters) individual attention that they wouldn’t receive elsewhere.

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TaxJar is great example of a company that has utilized NPS to not only improve their product over time through customer insights, but also to support their passion of over-delivering on customer experience. 

As a result, they’ve found their secret to outpacing their competition.

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Dana Severson

Dana Severson is the Director of Marketing at Promoter.io and cofounder of Startups Anonymous. Former founder & CEO of Chasm.io/Wahooly and AngelPad Alum. In addition to focusing on growth at Promoter, Dana is a weekly columnist for Inc.com

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