Content is King

Price and ease of use are important, but content is what really counts

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For vendors of tax research tools it's all about selling their products' content, pricing or ease of use, or all three. But content, it seems, is still king, even when the price is right. "I've got to have content," says Leon Keller, a sole practitioner based in Ellicott City, Md. "Once I've got the content, I then shop for the best price. But, if it's the best price, and it isn't easy to use I will then go up to the next higher-priced product that is easy to use with the same or better content."

Pricing led Keller to shift from RIA's Checkpoint to the lower-priced OneDiscPremium DVD from Tax Analysts. Overall, Keller says he is pleased with the Tax Analysts' product. However, among his complaints is its slow access and the cumbersomeness that goes along with inserting and ejecting the disc.

"It ought to be online,'' Keller says. But the DVD did represent a big improvement in the eyes of Tax Analysts. The 3.3GB storage on DVD enabled the company to deliver full-tax source documents on a single disk, something that wasn't possible with the smaller storage capacity of CDs.

Partner Insights

The race to add content still dominates among the competitors, even while they grapple with more global issues in developing the platforms that deliver the content. And price isn't everything, as CPAs like Keller testify.

Kleinrock, which has long marketed its tax research and preparation software on price, has shifted its marketing tactics to boosting product content as it tries to make inroads into the fiercely competitive tax research and preparation market.

Customers expect that you will have the integration capabilities that facilitate ease of use. So to them it is about content, says Ken Crutchfield, executive publisher of the Rockville, Md.-based publisher.

"Ultimately, it is content that people pay for,'' says Crutchfield.

Last year, Kleinrock launched more than a dozen new products with expanded content as part of its TaxExpert research line. This year, the company plans new tax compliance titles as part of its Complete Tax Library, for Forms 1041 and 1065, for a total of seven business tax offerings.

The strategy behind emphasizing content is to provide more data for accountants who have growing business clienteles, says Crutchfield.

Last year, Kleinrock also released a quick reference information guide consisting of three books titled Quick Answers Library. It includes the "how-to" quick reference books "All States Quick Answers," "Business Quick Answers" and "1040 Quick Answers" to assist accountants with the completion of their clients' tax returns.

LexisNexis Sees Green In SBMs

For years, LexisNexis has been selling data culled from numerous information sources and then tailoring it for use by the Big Four accounting firms. It consolidates the voluminous content it receives from a number of tax content providers into a single interface used by firms including Grant Thornton.

The company has made periodic efforts to reach small and midsized public accounting firms over the past 10 years. But with the growth in demand for tax research targeted to SMBs, the Dayton, Ohio-based firm sees an opportunity to leverage its content and raise its clout with enrolled agents and proprietors of small accounting firms.

"It's an area we need to look to if we are going to grow as a tax provider,'' says Gerry Vondenbrink, segment director for corporate tax and accounting at LexisNexis. Vondenbrink says with the markets' continued growth, up four percent in 2004, especially as more and more Big Four accountants go out on their own and seek the services they had at the large firms, the company wants to leverage its brand recognition among the fledgling CPA firms.

One advantage LexisNexis will be able to wield is that practitioners at these new firms, already familiar with the company's service, will not have to learn new interfaces. The company also offers a great deal of familiar information, carrying content from CCH, Tax Analysts, Matthew Bender, Kleinrock, and BNA.

LexisNexis pricing will be competitive to give it even further entrée into the market. It will offer its most basic tax research content bundle for $150 per month for a single user. Additional content bundles are available at varying costs.

The content bundles LexisNexis sells are tied to its Tax Task Page, which caters to its corporate accounting clients. While the product has been available for purchase by SMBs as far back as October 2003, it was re-launched in Spring 2004 to provide increased functionality for smaller users.

"Our goal is to be seen as a legitimate provider of tax and accounting services,'' said Vondenbrink. "I don't think that this market looks to us at first blush."

Content played a similar role in the decision of Holthouse Carlin & VanTrigt to evaluate products from BNA/Tax Management. Partners at the $24 million Santa Monica, Calif.-based accounting firm, are "reasonably happy" with the State & Local Tax Library on RIA's Checkpoint. However, according to its tax partner, Blake Christian, the firm is exploring BNA's Sales & Use Tax Rates, Forms, and Rates File Generator, and also evaluating adding BNA's state tax management product to its Tax Management Library to replace the RIA product.

"The consensus of the partners is that BNA has the most comprehensive content, so we're taking a look at it,'' says Christian.

Two years ago, the firm, which has used both CCH and RIA products, switched to BNA Tax Management Library. Although Christian didn't perform the evaluation, he says the decision to go with BNA was made because it was so well designed and easy to navigate.

While BNA was more expensive than some of its competitors, partners felt it was worth the cost. "A huge differentiation was how well laid out its international portfolios are,'' Christian notes. "We do a fair amount of import and export work."

BNA/Tax Management isn't relying on content alone in its effort to increase market share. Two years ago, it unbundled its products to give customers a greater choice.

But content is still an important part of the picture. In December, BNA introduced links to its Estate Tax Planner from its Estate, Gifts and Trusts portfolios so that accountants could perform "what-if" scenarios and review the pros and cons of doing one trust versus the other. Prices start at $1,195 per user.

BNA too is appealing to accountants' desire for short learning curves with tax research software. In January, it launched Express Training, a complimentary service that can have users up and running on its software within 30 minutes.

Bringing It Together

The QuickAnswers products are aimed directly at PPC and its Deskbooks line. But while ATX is broadening its line to provide more sophisticated products, PPC is responding and taking greater advantage of its status as a member of the Thomson family.

PPC, which already has nine tax and payroll Deskbooks, is preparing for additional releases, according to Blake Smith, senior director of product development.

"We have more content planned,'' says Smith. Among the upcoming additional offerings on tap are business planning, a planning library, and an engagement guide. The Fort Worth, Texas-based Thomson unit has also made Deskbooks available via Checkpoint from its sister company, RIA.

Tax Deskbooks on Checkpoint costs $845 for the entire set of nine titles. The same offering on CD costs $695. Despite the cheaper price for the CD version, the migration of Deskbooks customers from the CD to the Web continues. "Those who are migrating online don't want to go to PPC for PPC content and then have to search RIA for RIA content if they have both,'' Smith says. They want one central location to access all their tax needs.

The inclusion of PPC material on Checkpoint has been part of an increasing movement by Thomson to bring additional content to the online service, as well as providing more links between different products. In October, it added continuing professional education material from RIA's sister company, Micromash, to Checkpoint.

While PPC does not report the number of Deskbooks users, RIA is more willing to give some insight into the market for Checkpoint's service. In November, Checkpoint reported a high of 57,336 unique users, up from a May low of 45,590 users, according to Ron Burkert, RIA's director of product management.

RIA is also increasing the capabilities of Tax Alerts, its information service, for keeping tax professionals apprised of the latest tax developments that impact them as well as their clients. In the fall, RIA enhanced Tax Alerts by making its Form/Line Finder available in the Forms Affected section of the Tax Alerts Development and also made it possible to search tax alerts to determine the impact of developments on individual clients.

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