Tax time is over, and those Americans who are expecting a refund are already making plans to spend it. How? A study of Twitter feeds by IQ Agency found that as of early April, 65 percent of Americans already knew how they planned to spend their tax refunds. The result is good news for retailers, with
- 14% planning to spend it on electronics
- 11% planning to spend it on fashion
- 11% planning to spend it on automotive
- 10% planning to spend it on food and beverages
- 7% planning to spend it on travel
- 7% planning to spend it on events
- 5% planning to spend it on music.
You’ll notice most of these purchases fall into the discretionary category, which means consumers can easily be swayed to buy by emotional appeals. Consider a marketing approach that does one or more of the following:
- Focuses on the tax refund as “found money” that won’t impact the family budget if spent on discretionary items.
- Emphasizes the “reward yourself” or “treat yourself” aspect of making these purchases.
- Suggests making a long-desired, big-ticket purchase (such as a new TV or electronic device) that otherwise would be too costly.
- Highlights the experiential quality of spending on vacations, events, or food and beverages, such as sharing good times with friends or making memories with the family.
- Appeals to the sensible side by offering discounts or deals on these product and service categories to tempt consumers who may be on the fence.
- Uses humor to sympathize with consumers’ tax time headaches and celebrate that they’re finally over.
Even for the 35 percent of Americans that IQ Agency found plan to save their refund or use it to pay bills, there could be opportunity for financial planners, insurance salespeople and advisers. With tax time fresh in customers’ minds and finances on their brains, you can:
- Contact existing clients with suggestions for how to maximize their refund.
- Offer to review current clients’ portfolios or insurance coverage, suggesting that refund money provides an opportunity to upgrade with “found money.”
- Reach out to prospects by offering a free consultation as to how their refund can be the start of an investment plan or used to purchase needed insurance that they may have been putting off.
Image by Flickr user bradleygee (Creative Commons)Google+