TurboTax Lesson on Monetizing “Free”



Tax day has come and gone and whether you filed months ago or scrambled to the post office seconds before closing on April 15th, for you the tax season is over. So too is the season over for software maker Intuit and their famous tax software TurboTax. By all accounts it’s been a good year.

The Wall Street Journal is reporting that Intuit announced that it had “distributed 10% more units of its popular TurboTax software than last year”.

This works out to over 20 million copies of TurboTax.

What’s their secret? They promote the free part.

TurboTax’s ad campaign focused on the free service offered to customers filing 1040EZ & simple returns. Of course everyone else has to pay and are quickly directed to one of the many paid TurboTax products.

Customers using the free version of TurboTax are shown a variety of offers for paid services from TurboTax including filing state returns and speaking to a professional tax preparer.

The results were an overall increase in revenue; although, the specifics were not reported. What was reported is that “Intuit’s revenue per return and profits margins for TurboTax have either climbed or remained flat each year”.

There’s a lot of “what ifs” in these statements, but the overall take is that Intuit increased revenue per return and didn’t spend any more to acquire and service those customers.

In this case, TurboTax has leveraged their free service to drive sales through multiple channels. This diversifies their risk and provides supplemental revenue to improve their service, acquire new customers, and expand their free trial offer.

As you look at your free trial offers think to yourself what other services could I be providing or promoting. Perhaps an affiliate offer might even make sense. The point is that you’re always trying to increase your conversion rates and perhaps one of the ways to do that is to provide your customers a new way to convert.