New Zealand Marketing magazine

Big break

Originally published in NZ Marketing November-December 2009, page 35

TaxRefunds.co.nz, pushes a simple idea to extraordinary levels

In 18 months, TaxRefunds.co.nz went from an idea to New Zealand's premier online, tax-refund business. As of March 2009, TaxRefunds.co.nz was New Zealand's fastest-growing company, with over 10,000 new customers a week. Some $15 million has been returned to local taxpayers since its launch in August 2008, and the company made profit in its first month. With a budget of one million marketing dollars, TaxRefunds.co.nz processed one million refund applications in its first seven months.

Background

BrandCom's objective was a 98 percent share of personal tax business in New Zealand. After a full market analysis and brand development, an aggressive marketing campaign was implemented, both nationally and regionally, backed by television, print and web advertising, and supported by direct representation to industry organisations and individual businesses.

The opportunity was identified when Geoff Matthews, founder of BrandCom, interviewed chartered accountants, who reported that of 500 tax refunds processed, 80 percent received a refund. Since tax simplification and the end of compulsory annual tax returns, working lives have changed. Part-time work, the rise in bonus payments and more frequent job changing have resulted in over-payment of tax. There is a large amount in unclaimed tax refunds (estimated at $500 million) owed to the country's salary and wage earners. With no system already linked to the IRD, TaxRefunds.co.nz had only to claim this ground. The services can be easily accessed and forms quickly completed online. Only those people who are refunded pay a fee: 12.5 percent of the refund up to a maximum of $500, with a minimum fee of $12.50.

The core objective of TaxRefunds.co.nz was to build a viable business that would deliver a needed service to New Zealand consumers, as well as rewards to the parent company, BrandCom, and its shareholders.

What’s new

TaxRefunds.co.nz was 18 months in the development phase and, unlike most start-up businesses, was cash positive within the first month. With the official launch in August 2008, the goal was to have a million customers within two years. It was reached in the first quarter of 2009. In the current economic climate, cash-strapped consumers are looking for extra funds—an ideal environment for the introduction and uptake of the product.

BrandCom's aggressive marketing campaign made PAYE taxpayers aware they could be eligible for a refund from the IRD and motivated many to go to the website to obtain their free, no obligation, tax refund assessment for each of the past four years, more recently increased to five years.

Results

In the first eight months, BrandCom became cash-flow positive; achieved a 56 percent share of advertising spend; gained exclusive arrangements by establishing strategic partnerships with, and sponsorships from, business associations, employers and unions. It posted a very solid first seven-month shareholder dividend and more than doubled the capital value of the company.

TaxRefunds.co.nz now employs 44 staff in its support centre in Oamaru, and is the fastest-growing business in New Zealand.

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