TurboTax has been pioneering in their use of the web for several years now, using crowdsourcing to let people answer one another’s questions at every step of the tax process and offering integration between financial systems to move tax information around – but this year they are using Facebook, Twitter and Myspace to help them not just stand out as a tax software solution, but to reinvent many American’s experience of tax day in the process. Here are a few unexpected things they are doing – mostly powered by social media:

1. Understanding the urge to procrastinate. Let’s face it, social media tools and sites offer just about the best distraction you can think of to avoid doing your taxes. Rather than offering a guilt trip on why we need to refocus on our taxes, TurboTax has a contest called the "Super Status Challenge" so you can waste time on your social media sites answering challenge questions (where your answer needs to include the word TurboTax), while still remaining somewhat connected to your taxes. And instead of offering relatively useless prices, like free product … they have a smart partnership with NBC to let people win dream trips to meet casts and crews of some of the most popular shows on the network. The whole campaign is like putting a sandbox in the classroom. We play a little, and (hopefully) get back to work.
2. Talking like a human. From the first moment you log into TurboTax and are asked to agree to a legal message because their "lawyers made them do it," you don’t have the sense that you’re entering into a serious financial transaction. You are about to give TurboTax what may be the most sensitive financial data you own, and they are not weighed down with the perceived need to take you through thousands of words of legal disclaimers. This dedication to using natural language instead of legal mumbo-jumbo is carried through the entire site, which makes you thankful they seem to have hired copywriters in place of lawyers to write the content on each page of the site.
3. Offering you a friend at a tough time. For many people, tax season seems like a time when the government is out to get you. It is the ultimate of an "us versus them" kind of situation, though arguably it should not be. At a time like this, you need a friend in the business, and that’s what TurboTax wants to be. The site will offer helpful suggestions, guide you through every deducation and help you keep more of that money you worked so hard for.
4. Allowing people to share the lesson they just learned. Doing your taxes every year is a bit like a treasure hunt. You learn new tricks, techniques and answers every year. As you do it, you get smarter about what is possible – and sometimes you can apply those lessons to next year. The other benefit of this, however, is that there is always going to be someone who has just learned the lesson you need to learn, or has the perfect answer to your question. Rather than assuming their own staff will have all the answers, as many customer service teams try to do, TurboTax has a robust community that lets anyone answer anyone else’s question. Combined with many of their own moderators, it is a powerful way offer a support group for people as they do their taxes.
5. Answering the unanswerable questions (in a way that actually makes sense). Pages of frequently asked questions are good, but the toughest questions are not frequently asked – and if they are, they are answered in a way that is nearly incomprehensible. If two unmarried people buy a house together, who gets the new $8000 homebuyer credit? You can imagine this question coming up for someone, but not among any list of frequently asked questions. TurboTax answers this very question on their blog, and has many such blog posts aimed at big tax questions like this. Sometimes you need more than 140 characters to explain something well. The TurboTax blog is a great resource that aims to do that.

Take all these tools together, and you’ll see how TurboTax is taking a nationally reviled day and making it a little bit easier to get through.

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Let me explain…

According to the Chicago Sun-Times, average modern retailers have about a 5% margin on products, be they a pair of sneakers or a flat-screen television. The same story explains that typical Black Friday discounts are now 40-50%.

I understand the logic, that one or two extraordinary deals will bring people into the store and they’ll also buy non-discounted or lesser discounted products, thereby making up the difference in profit. But what if that no longer holds true?

Read the papers, you’ll see that across the United States people who went shopping at all on Black Friday were very careful about their purchases and were much more likely to go into a store and buy the one or two super-specials than a basketful of goods.

The result? Instead of getting a nice boost on profits and a good jump-start on Christmas / holiday shopping, the entire experience was more likely a complete bust for retailers, losing them, rather than earning them money.

While some analysts will doubtless peg this to the 2008 recession, I suggest instead that it’s the inevitable result of the increasing commoditization of our world, the reduction of everything to its cheapest possible manifestation.

This is what Linda Sanford and I wrote about in our book Let Go To Grow [aff], and it’s fascinating to see how it’s become a more visible retail phenomenon in the years since we wrapped up the manuscript.

Every time we shop at Wal-Mart or Target to get our product a buck or two cheaper, every time we pop online to save on sales tax, every time we research products to identify the lowest-cost outlet, we’re all contributing to the problem.

With a retail economy built on the need for a substantial profit to cover overhead and costs, pay city and county taxes, health care for employees, and offset theft and so on, this trend towards an ever-more-commoditized world is a scary one. If followed to its logical extreme, we won’t have any retail stores at all or we’ll have to impose online store tariffs that offset the dramatically lower overhead of online drop-ship companies. What choice will we have?

Meanwhile, we’ll have to see. I predict that retailers will report that gross revenue from Black Friday sales were okay, but that profit from these sales was down significantly from prior years. And next year, even if the economy is in better shape, won’t jump back.

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Just last week Circuit City announced the closing of 155 stores which meant 155 fewer music stores.  Today the retailer filed for Chapter 11 bankruptcy protection.  According to the Associated Press:

"…the nation’s second-biggest electronics retailer, filed for bankruptcy protection on Monday but plans to stay open for business as the busy holiday shopping season approaches.It filed under Chapter 11 of the bankruptcy code, which will allow it to hold off creditors and continue operations while it develops a reorganization plan. (more)

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