INTUIT - A Case About The Company

9 - 8 1 6 - 04 8
REV: MARCH 26, 2016
SHIKHAR GHOSH
JOSEPH FULLER
MICHAEL ROBERTS
Intuit: Turbo Tax PersonalPro - A Tale of Two

Entrepreneurs
PersonalPro is a story about leadership by a single entrepreneur…a story about when the boss doesn't
believe…of learning from the best wheel-makers, rather than reinventing the wheel…This project was not a
priority in TurboTax or ProTax…I met with the team and we disagreed over the Leap Of Faith assumptions…the
team listened to me and ran experiments…they validated their idea…they were right and I was wrong.
— Scott Cook, Chairman of Intuit, (Speech at ceremony giving the Scott Cook Innovation Award to
Brian Crofts in 2014)
It was November of 2014 and Brian Crofts was preparing for a meeting with two senior executives
at Intuit. One was his boss, CeCe Morken, who ran Intuit’s Professional Tax (ProTax) business unit, the
$422 million business that sold tax preparation software to professional accountants. The other was
Sasan Goodarzi, who ran Intuit’s $1.8 billion TurboTax business (TurboTax) that sold software to
consumers. Crofts had devoted three years to a new product-- TurboTax PersonalPro (referred to as
PersonalPro) -- that spanned those two business units. The company’s leadership had decided it was
an appropriate time for a major roll-out of the product and the purpose of the November meeting was
to discuss and decide upon a go-to-market plan for PersonalPro.
PersonalPro used a technology that the ProTax group had developed. It provided a two-sided
platform that connected individual taxpayers with professional accountants, who could then prepare
the customer’s tax returns – on-line – for as low as $49 a return. After three years of structured
experiments, the team felt ready to conduct a full-scale trial in a major geographic market. If it met their
forecast, PersonalPro was thought to have the potential to become at least a $250 million line of business
for Intuit. The team remained energized and, in the fall of 2014, Crofts won the “Scott Cook Innovation
Award.” In addition to the recognition and a “vacation with spouse,” the award winner was granted
three months away from regular duties to dedicate their attention to their next innovation.
PersonalPro was an early example of an effort to make Intuit more entrepreneurial and innovative.
Intuit’s founder, Scott Cook, had spearheaded this drive and personally advised Intuit’s cadre of
intrapreneurs, including Crofts and the PersonalPro team. Cook explained: “We know that large
businesses are good at killing new business initiatives like this. We’ve tried to develop a set of
Senior Lecturer Shikhar Ghosh, Professor Joseph Fuller, and independent researcher Michael Roberts prepared this case. Funding for the
development of this case was provided by Harvard Business School and not by the company. Certain financial details have been disguised. HBS
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This document is authorized for use only in Antonio M. Torres's 2397-Innovation Management T4 23-24 at Universidade Nova de Lisboa (UNL) from Mar 2024 to Jun 2024.
816-048 Intuit: Turbo Tax PersonalPro - A Tale of Two Entrepreneurs
organizational design features to help prevent that. And, we’ve tried to let experimentation trump
hierarchy – run a lot of experiments and let the market decide, rather than putting all decision-making
power in the hands of the bosses who often make decisions based on PowerPoints and memos rather
than direct observation of customer behavior.”
Despite Intuit’s commitment to innovation through intrapreneurship and visible executive support
for the effort, the journey had proven challenging. The team, consisting of product and engineering
people, had run numerous tests. It found itself having to compromise with existing functions, whose
policies and procedures were geared to support the large and successful core business. Crofts hoped
to offset those impediments by harnessing the resources of the larger business units, particularly
TurboTax. Their brand positioning, customer base, and marketing resources could help ensure the
success of PersonalPro’s launch. Nonetheless, Crofts still wondered whether he should press for a
launch strategy that reflected his team’s convictions about the product’s positioning, based on several
years of tests, or accommodate the strategy being advocated by the established business unit. It did not
help that his data on the key issue of confusion between TurboTax and PersonalPro brand positioning
was inconclusive. Crofts observed:
I confess it has not been easy shepherding this new business across two different
business units. And, while we rely on the TurboTax brand, the leaders in that business
unit are concerned that the fundamental message of our product undercuts the core DIY
positioning of TurboTax -- “It’s amazing what you’re capable of.”
TurboTax naturally wants to manage their brand and message, and there’s no way our
startup could roll-out anything on this scale anyway. So, on one hand, it’s exciting to see
TurboTax embracing the product and willing to spend a great deal of energy and money
on the roll-out. On the other hand, I’m wary of our venture simply being swallowed up
and made a cog in their machine. There are a lot of insights we’ve gleaned from our years
of testing and experimentation that I don’t want to get lost.
Background: Intuit Business Overview

Intuit was founded by Scott Cook and Tom Proulx in 1983. Cook had an MBA from HBS (1976) and
had spent four years as a product manager at Procter & Gamble, and two years as a consultant at Bain
& Co. In the early 1980s, Cook’s wife Signe complained about the time it took for her to pay the couple’s
bills. Cook researched the problem, and decided it was an opportunity worth pursuing. He joined with
engineer and co-founder Tom Proulx to develop what would become “Quicken” software. It became
the leading personal finance software, allowing consumers to pay bills, prepare budgets and track their
investments. The company gradually expanded into more sectors of the consumer and professional
finance space, and by 2014 was a $4.5 billion business with approximately 8,000 employees worldwide.a
Intuit had three primary business units, defined by the customers each served. The Consumer
business unit ($2.25 billion in revenue) consisted of two units: a personal financial management
product (Quicken) and an investing platform (Mint); and, the consumer tax group, whose principal
product – TurboTax - was the leading tax preparation software for consumers. Since mid-2013,
TurboTax had been run by Sasan Goodarzi. The Professional Tax Group (ProTax, $422 million in fiscal
2014 revenue) served more than 75,000 accountants with a variety of software products that allowed
them to prepare tax returns for their clients. Finally, the Small Business Group ($1.83 billion in revenue)
a For fiscal year 2014 ended July 31, 2014.
Intuit: Turbo Tax PersonalPro - A Tale of Two Entrepreneurs 816-048
included Quickbooks business accounting software, as well as various software and service offerings
that focused on small business payroll and payment system. Those three business units reported to
CEO Brad Smith; Scott Cook chaired the company’s executive committee. See Exhibit 1 for an overview
of Intuit’s revenue and operating income by segment.
Background: The U.S. Tax Preparation Business

Each year, 140 million tax returns were filed by individuals, families, and small businesses.
Approximately 90 million, or about 65%, of filers used a professional accountant – the so-called “Do It
For Me” (DIFM) segment. Intuit’s ProTax group provided the software that supported about 30 million
of those filers through over 75,000 professional accountants, 19 million of whom used a “tax store,”
such as H&R Block (HRB) or Jackson Hewitt. HRB was the leader in the tax store segment - it prepared
approximately 14.5 million returns annually.
The other 51 million returns, or 36%, were referred to as “Do It Yourself” (DIY). Twenty eight
million DIY returns were prepared using TurboTax software. The DIY segment accounted for less than
10% of tax preparation revenue, despite accounting for 40% of tax payers. The mix in demand for DIFM
and DIY had remained stable and overall demand had been flat for at least the past 10 years.
PersonalPro had the potential to bridge the gap between the DIY and DIFM segments. It enabled a
filer to upload their tax information electronically to an accountant sourced through the PersonalPro
platform, as if they were filing using DIY software like TurboTax. The accountant would then prepare
and file the tax return for a fixed (and predetermined) fee. That fee was typically in the range of $200
to $300 per return. It was convenient and cost effective for the consumer and efficient for the
accountant. The product provided Intuit the opportunity to leverage the ProTax division’s strength
with professional accountants while exploiting TurboTax’s strong brand name and reach in the DIY
segment.
See Exhibit 2 for summary data on the tax market.
Cook’s Efforts at Reinvigorating Intuit’s Innovation Culture

Cook described the decade-plus of thinking that he and the team had devoted to understanding the
drivers of successful innovation and implementing them at Intuit:
In the 2002 time frame, I went back and looked at the 30 or so major new product
introductions we had rolled out. In part, I was motivated simply by a desire to be more
effective. But our growth was slowing, and the Net Promoter Scores we had focused on
as a barometer of market success were also stalling out. The vast majority of these were
failures. I tried to look at what distinguished the winners from the losers…what were the
factors that could predict success or failure? The first things we looked at were the
leadership of high-talent managers, the use of the Intuit brand name, and selling to
existing customers. None of these helped discriminate between success and failure. The
three things that really seemed to explain success or failure were first, that the team found
an important and unsolved problem. Second, that we had an approach that would
actually solve the problem; and, third, that we could build a durable competitive
advantage.
The winners had all three of these factors, and the losers lacked at least one. So, the
first intervention we made was to put these lessons to work in a program we called
‘customer-driven innovation.’ We tested every new idea against these criteria and still
coach teams around this. We made some progress, but the level of customer empathy and
insight still wasn't deep enough to develop truly breakthrough insights.
I thought that many of the ideas around design thinking could really help in that
regard, and I thought that the managerial hierarchy was part of the problem. Bosses don’t
get close enough to customers, they don’t actually ‘do.’ They read and write memos and
presentations rather than experiencing the product and the customers deeply. So, we
decided to go after mid-level managers, where we thought we would have a better chance.
Cook and the team developed Design 4 Delight (D4D) as the overarching product development
philosophy. It involved deep customer empathy, unfettered idea generation and extensive
experimentation. Those principles percolated throughout the company, transforming the way Intuit
looked at new product development, acquisitions, and competitive positioning. One new product
developed using the D4D process was SnapTax, a mobile app that allowed customers to prepare their
taxes completely on their mobile phones, taking pictures of their W-2 forms and other inputs. CEO
Brad Smith described its success: “Within two weeks of its release, it had replaced Angry Birds as the
number one app on iTunes.”b Still, Cook remained unsatisfied:
I looked at many of the big decisions we made…decisions that were analyzed at every
level and brought to the board, decisions I put my best thinking into, and they were just
wrong. If our biggest decisions – the decisions agonized over by our finest minds – were
wrong, what does that say about us? Is consumer behavior simply unknowable, or were
we just doing something fundamentally wrong?
These pangs of self-doubt clicked with some things I’d learned early in my career. I
remember studying Toyota and being amazed that a loom maker from the middle of
nowhere in Japan could become the world’s foremost automaker. When I studied that
years ago, I’d come to the conclusion that the brilliance of Toyota lay in its ability to make
decisions on the basis of data from of well-structured experiments rather than the insight
of senior managers. More recently, I knew that Google had crushed the search business
by giving each engineer the power to release code and test it in the search engine…they
were running 3,000 to 5,000 experiments a year to refine their search algorithms. I realized
the key was to make these decisions not by having the “suits” vote – not letting the
hierarchy decide - but allowing the results of these experiments to rule.
This was around 2008, and at the same time, I discovered that Eric Reis was doing
some very articulate thinking and writing about exactly this, and we quickly engaged him
to teach and coach teams at Intuit.
Cook quickly realized that it was difficult to introduce Reis’ entrepreneurial approach into Intuit’s
large, core businesses. He and the team developed a series of tools and programs designed to ease the
path for intrapreneurial businesses and encourage the kind of experimentation required to develop
and refine them. Those programs included several elements that were applied to the PersonalPro
initiative:
Innovation Catalysts: Catalysts were middle managers like Brian Crofts, who were trained in
design thinking. They were given time away from their day-to-day jobs to work with and coach new
b Smith, Brad. Intuit’s CEO on Building a Design-Driven Company. Harvard Business Review, January – February 2015, reprint
R1501A, page 5.
business development teams. They would help them create prototypes, run experiments, and learn
from customers.
Executive Sponsors: Cook saw that small new business teams could easily be smothered by the
processes and reporting layers built-in to larger organizational units. Executive sponsors were charged
with serving as a single point of contact for new business team leaders. They were also responsible for
communication with the rest of the organization and procuring needed resources and support. Over
the course of the project, the PersonalPro team had executive sponsors first from ProTax and, then,
from the TurboTax division as the project moved from a product to marketing focus.
Separate Funding: Cook realized that the normal budget and resource allocation processes
appropriate for Intuit’s established businesses would invariably lead to the new, small businesses being
starved for funds. He instituted a program of CEO Funding, whereby new business initiatives were
funded by a separate, discretionary fund overseen by the CEO. The PersonalPro team received a few
million in the first year, roughly double that in the second, and incrementally more in the third. Each
of the business units - TurboTax and Pro Tax – had also contributed a significant fraction of the total in
order to have some “skin in the game.”
Focused Teams: New business teams were small, usually 3 or 4 people – an engineer, a product
manager and a designer, or, in Cook’s words, “a hacker, a hustler, and a dreamer.” The PersonalPro
team started with five members. Over time it grew to 20+ members, most of whom were in product
development and engineering.
Recognition and Visibility: Intuit began a series of programs to recognize and reward teams,
including the prestigious and highly visible “Scott Cook Innovation Award,” given to four individuals
annually. Cook also spent time coaching the new business teams. The PersonalPro team approached
him at several critical junctures in the project. He would give them his views on their assumptions and
methodology, but leave the decision making to the team. He also put them in touch with other
companies such as Uber, Lyft and Postmates that had successfully created two-sided platforms so that
they could "learn from wheel makers and not spend time reinventing the wheel.” Cook often
participated in those calls and discussed them afterwards with the teams.
Despite that support, the PersonalPro team found that a number of Intuit’s procedures and systems
inhibited the team’s progress. The team tried to work around them and discovered an “internal hack.
“ Crofts explained:
I saw a lot of other new business teams getting hung up on internal processes and
systems…having to use the approved service providers and the complicated systems that
Intuit had built for its large core businesses. But we were able to avoid this, to a large
degree. Early on, we found, and Intuit bought, a small company called Teaspiller that had
developed a platform for connecting accountants with taxpayers, a rudimentary version
of the product we envisioned. This turned out to be a great “internal hack.” Within Intuit,
when you bought a business, you were allowed to keep it running on the systems and
processes it came with for a year or so…so this bought us some flexibility and speed. It
allowed us to focus on validating our hypothesis and business model vs. building
infrastructure.
PersonalPro: The Initial Phase

In 2011, Crofts was a Group Product Manager and Innovation Catalyst within ProTax, with the
assignment of creating that group’s first mobile strategy. Their original focus was to create applications
to improve collaboration between the accountant and their clients. ProTax’s overall strategy revolved
around helping accountants save time and grow their practice.
In the course of his work, Crofts investigated technologies that helped ProTax’s accountant users
exchange documents with their clients more easily. He saw the way in which Intuit’s sister company,
Quicken Loansc, used technology to streamline the mortgage process. When Crofts witnessed how
Quicken Loans connected borrowers and lenders, he thought to himself, “This is how accountants will
work with their clients in the future.”
Crofts was appointed to pull together and lead a team of five in April, 2012. The team worked
towards launching its Minimum Viable Product (MVP) in fall of 2012, in time for the Oct. 15 tax
extension deadline.d They would test the concept that fall, followed by a product trial the following
spring season (see Exhibit 3 for a timeline of key events). The team set a deadline for a full launch in
January, 2013, in time for the 2012 tax filing season, which ran from mid-January through April 15.
Crofts recalled:
In April of 2012 - right after the 2011 “regular” tax season ended - we set up a “war
room” operating out of ProTax headquarters in Plano, TX, but also worked with the
TurboTax group in San Diego. At this juncture, most of our engagement was centered on
getting permission to use the TurboTax brand in our marketing, as well as going after
consumers using the TurboTax brand name in search engine marketing. The TurboTax
folks really didn’t know who we were or what we were doing.
I’d met Eric Reis and read his book in 2011 and that was inspirational. The idea that
we could operate as a startup inside a large company was exciting. And like many
startups, we had a good idea, but there were many unknowns—unknowns that could be
tested and proven – or not. Right away, we made up a list of the 40 biggest risks and key
hypotheses to test – assumptions we would need to test to wring the uncertainty out of
this business. (See Exhibit 4 for a list of these hypotheses.)
The team met with Cook in late summer, as they were refining their MVP. Early on, they coalesced
around the Tax Store (TS) customer as their prime target segment. They believed that PersonalPro
offered Intuit a vehicle for contesting HRB’s dominant position in that segment. They asked Cook
which of the many risks they’d identified were the true “Leap of Faith” (LOF) assumptionse that should
be prioritized for testing during the MVP cycles. Cook felt that the riskiest were those that revolved
around the economics of the platform: how would PersonalPro both acquire accountants, while also
attracting prospective clients with a lower price? Could they live with the up-front price transparency
the product’s positioning required? Would accountants, who were used to operating as independent
c Quicken Loans was a mortgage business, originally purchased by Intuit in 1999, and then bought back by its original founders
in 2002. The company retained the right to use the Quicken brand name and was the largest on-line mortgage lender in the U.S.
d In the U.S., taxpayers were generally required to file by April 15 to pay their taxes on the prior year’s income. Taxpayers could
file for an extension, in which case the April 15 deadline was moved back to Oct. 15. Approximately 7% of U.S. taxpayers seek
such an extension.
e These “Leap of Faith” assumptions are the riskiest assumptions regarding the fundamentals of the business.
business professionals, change their behavior to conform to the rules and processes that would be
embedded in the platform?
The team disagreed. They believed the major risks were in their ability to change taxpayer behavior.
Could they attract TS customers at a reasonable cost? Was there a price that would be low enough to
entice the taxpayer, but still be attractive enough to the professional accountant, while allowing Intuit
to earn an acceptable margin? Would a taxpayer work online with a professional they had never met?
Could the TurboTax brand be extended to span both the DIY and DIFM segments?
The first tax season was spent designing tests to answer both sets of questions. Crofts explained
their approach:
We were aware of the Dropbox story, and the fact that their first MVP was just a video
showing people how the product worked. They wanted to be sure there was a
product/market fit before investing millions of dollars in development. We did a similar
video for PersonalPro and showed it to 250 people in our target market of existing tax
store customers. One-third of tax store customers “signed up” after watching video. Seven
of ten tax store customers also said “TurboTax is a brand I trust.” We felt like people got
the idea. Probably more importantly, it really helped us create a vision for the team and
our stakeholders; before we had a line of code we were interacting with the customer. We
hadn’t validated the idea just yet, but it was a good place to start.
The video MVP was followed by a live market test during the fall of 2012 (for the tax year 2011
extension season). His team recruited a handful of accountants to support the MVP and succeeded in
attracting fewer than 50 customers. They were primarily sourced through search engine marketing,
which targeted searchers looking for accountants and low price. Those customers paid an average fee
in the low end of the $200 to $300 range; the Net Promoter Scoref (NPS) for PersonalPro was near 70.
The team viewed the results as a validation of their core hypotheses. While they had yet to demonstrate
that the business could operate at scale, Crofts observed, “We felt like we had some strong evidence
that a lot of our assumptions would pan out — we had moved beyond surveys and into observing real
behaviors.”
Although encouraged by the results of the MVP, the team decided to invest in a broader assessment
of the opportunity to convert tax store customers. They hired an established market research firm to
conduct a quantitative research survey with a group of tax store users. The survey results were not
encouraging. They showed only moderate interest in the PersonalPro concept. People were generally
happy with the face-to-face interaction that tax stores offered, and HRB enjoyed a reputation as “fast,
accurate and professional.”
Moreover, the results suggested some discomfort with core elements of the PersonalPro offer,
including sharing documents on-line and relying on an accountant with whom the customer had no
personal connection. However, some elements in the PersonalPro value propositions resonated with
tax store customers. Price was a significant negative for many tax store users, and many reacted
favorably to PersonalPro’s promise of a fixed, up-front price. The TurboTax brand name also registered
as a big plus with potential customers.
f The NPS was based on consumers’ answers to a survey question, “How likely is it that you would recommend our service to a
friend or colleague?” Consumers respond on a zero to 10 scale, 10 being most likely to recommend. The NPS is the fraction who
check the boxes 9 and 10 minus the fraction who check the boxes 0 through 6.
After a discussion with Cook, the team decided to proceed despite the sobering research results.
Crofts explained:
We’d meet with Scott and show him surveys and he’d dismiss them immediately. His
view was always, “Don’t tell me what the customers say, show me what they do.” He
knew how squirrely consumer behavior is. However, when we looked deeper at what
we’d learned from our video MVP and from other interactions with consumers, we were
convinced we could build a system that addressed three key pain points for tax store
customers - convenience (we could do your taxes ‘from anywhere, at any time’), cost (our
pricing model was flat-fee, with no surprises), and confidence (expert CPAs, as well as
the TurboTax brand name).
Another huge benefit of focusing on tax store customers was that it created a point of
focus that everyone in the company could rally around. I recall how much clearer our
resolve was when we had a true competitor. Our goal was to out-compete the tax stores
in the DIFM space. And we were confident we could develop a better offering—a much
more convenient and affordable experience. It was a positioning that resonated well with
the TurboTax organization and made it easier for us to get their full support.
Developing PersonalPro
By the time of the January 2013 launch, the team consisted of about a dozen employees, and they
had succeeded in recruiting approximately 40 accountants. The software platform had been
considerably improved from the MVP iteration. Attracting more customers was a key goal, as was
driving down the cost of customer acquisition.
Accountants earned 75% to 80% of the fee paid by the customer. They seemed comfortable with the
model, in part because Intuit did the work of obtaining the customer and processing the payment and
had developed a streamlined platform for organizing the information. Moreover, most of the
accountants viewed customers provided by PersonalPro as purely incremental business.
The team felt it was essential that the TurboTax team embrace their strategy, given the risk that
PersonalPro might undermine the existing business’ message of simplicity. To allay those concerns, the
team agreed that the TurboTax marketing group would control the choice of words used in search
engine marketing and other advertising and promotional copy of the 2012 tax year test.
By the April 15 close of the 2012 tax season, the PersonalPro business had processed somewhat
fewer than 2,000 paid returns and signed up fewer than 200 accountants. The average revenue was in
the $200 to $300 range, and the NPS now exceeded 70. Overall, the team achieved over 1% end-to-end
conversion, although the conversion rate had increased to two or three times that baseline figure, once
the team had tweaked the site’s features in early April, near the end of the tax season. The team ran
dozens of experiments focused on optimizing each part of the experience. They tested messaging,
pricing, how to present their network of accountants, how to share documents, etc. – every aspect of
the customer’s and accountant’s experience with the product. (See Exhibit 5 for results.)
The team also concluded that the sales process consisted of two related, but distinct stages: a
“shopping funnel” and a “product funnel.” In the “shopping funnel,” consumers searched for DIFM
solutions, selected an offer, and signed-up. Improvements in PersonalPro's segmentation scheme and
associated marketing influenced their shopping behavior. Once customers entered the "product funnel"
and began the process of document sharing, getting a price estimate, confirming their purchase, and
paying, they were using the actual PersonalPro product. Crofts elaborated, “We believed this latter set
of steps in the funnel captured consumer sentiments about the product itself, and that our success in
the shopping funnel was driven by both who we were marketing to and the effectiveness of the
marketing message.”
During 2013, two new GMs had stepped into the roles of running TurboTax and ProTax. CeCe
Morken became the GM of ProTax in the fall of 2013, and shared her thoughts on PersonalPro:
The idea for PersonalPro sounded fantastically innovative…it was a two-sided

platform that really leveraged Intuit’s strengths on both the accountant and taxpayer sides
of the business. It was a very scrappy team and they had run some solid experiments that
showed great promise with both taxpayers and accountants. There were two key pieces
of data that I looked at early on. First was whether we had found an important customer
problem. Over 1.5 million people start to use - but then abandon - TurboTax before filing,
which suggested there were a lot of people who ultimately do decide they need
professional help. And then, the attrition rate. People who use TurboTax one year but not
the next – that is a similarly sized group. So, we know there is a pain point. Together,
these groups seemed to be prime candidates for PersonalPro. Once we agreed there was
a pain point here, then the question was, “do we have the right solution?”
The team had done a great job experimenting on the product…the NPS was high and
improving. So, the offering delivers delight. The question is, can it delight enough people
to be a success? This did not include the 19 million people who use tax stores, a different
animal altogether. The question of how much pain tax store customers have was a more
complicated question. The price and inconvenience may be high, and the level of service
variable, but many people walk out of the store with the biggest check they will receive
all year, and that can create fairly high levels of satisfaction. Early quantitative research
highlighted this issue.
Sasan Goodarzi, who had assumed the GM role in TurboTax, offered his early thoughts on
PersonalPro:
When I took over TurboTax in the summer of 2013, I’d already heard about the
PersonalPro team, and I was incredibly excited by the business. Intuit has assets in the tax
business we could utilize far better, and the PersonalPro team had an intriguing cut at
this. The whole TurboTax focus is getting consumers to do taxes themselves, and that is
an admittedly small slice of the $21 billion market for tax services. We were all excited by
the idea of penetrating more broadly and growing our total market.
Our approach is first, try to delight one customer and get them to love the product,
then 100, then work on broader funnel conversion. In the early stages, PersonalPro was
doing great. We had great feedback from customers…great NPS scores. And, accountants
were intrigued as well.
However, as the PersonalPro team studied the actual behavior exhibited by customers, they began
to question their initial focus on the tax store segment. Crofts explained:
Early on, we coalesced around the tax store customer. The DIFM segment was 90% of
the market, and tax store customers seemed like such an appealing segment. It was easy
to rally around that objective. But, the data from actual customer behavior clearly showed
that the non-returning TurboTax customer was a much more appealing segment. We had
conversion with TurboTax customers that was a significant multiple of that for tax store
customers. (See Exhibit 6 for conversion rates from different channels.) And, that made
sense. The behavior changes required of tax store customers were significant…first we
needed to find one that was dissatisfied, then they would need to change their behavior
and work on-line instead of in person, and with a brand / company they hadn’t worked
with before. TurboTax customers had worked on-line, they’re tech savvy, they trust the
brand. We saw clearly that the low hanging fruit was the large group of TurboTax
customers who don’t come back to TurboTax each year because they have some kind of a
life event – like marriage, divorce, a new job. However, this shift meant that our initial
market was smaller, and also raised internal concerns about diluting the core TurboTax
DIY positioning.
It was also clear that while our proposition addressed the concerns of many tax store
customers, we were asking a lot from them. To switch to us they would need to change
their behavior in a significant way – giving up the in-person interaction for the
convenience and savings of an on-line experience. We were also asking them to trust a
brand that most of them had never worked with. I felt confident that we could eventually
win them over but the data suggested that they were not the early adopters – they were
likely to be the laggards. On the other hand, there was a huge internal benefit in targeting
the tax store customer.
Cook was also not particularly concerned about the initial choice of a target a market. He observed,
“I don’t usually sweat the target audience too much. I say solve the problem well and see who loves it
– that will point you towards your target audience. As long as you have found a good problem – a
really painful problem or a problem that is painful to a lot of people - then you will have a big enough
market.” The results were sufficiently impressive to secure additional funding for the following year.
Cook and Intuit’s CEO, Brad Smith, maintained an active interest in the project. Smith encouraged
them to focus on the conversion funnel. The team set ambitious goals for tax year 2013 emphasizing
the sign-up-to-paid conversion rate.
Over the next few months the team developed detailed action plans to achieve three objectives
during the upcoming 2013 tax season: increasing document upload from clients, increasing acceptance
of the price estimate, and increasing actual commitment (i.e., signup to actual payment). Crofts recalled
the results:
We decided to continue focusing on the product piece of the funnel - sign-up to paid
conversion. The TurboTax folks just wanted to see more evidence of a solid product before
they would open up the offering to the full range of TurboTax customers.
We finished with over 25% signup-to-paid conversion in the product half of the funnel,
compared to several points lower the year before. We had significantly higher conversion
levels on some cohorts of TurboTax customers to whom we marketed. Overall, the NPS
was somewhat higher than the prior year. Acquisition cost fell from in excess of $900 - an
untenably high multiple of revenue per return - to a somewhat lower multiple of average
revenue, which remained in the $200 to $300 range. Customers served grew to over 5,000,
representing a year-over-year growth rate of several hundred percent, making this the
fastest growing business within Intuit (albeit off of a small base). On the supply side, the
number of accountants also grew by a significant multiple.
End-to-end conversion was flat because we got a bunch of bad traffic early on in the
season. There was this constant tension…do we focus on getting the product “perfect”
10
and only then work on driving more traffic to get people to the signup point? Or, is the
product solid, and we should work on the weak link of getting traffic? A classic chicken
or egg problem. I think the reputational risk drove us all to focus more on getting the
product perfect, and less on growing traffic until it reached that point.
In addition, Crofts recalled:
It was sometimes hard being part of a big company. Fewer than 10,000 customers and
less than $2 million of revenue is small within the context of Intuit. But we saw other
startups in Silicon Valley with 10,000 customers and similar growth getting funded at a
$60-$100 million valuation. And, the independence we sought – and valued – was a
double-edged sword. We clearly needed more integration with the main lines of business.
But join them too early, when you are small, and you just get lost. So, it was a hard line to
walk.
Despite the uneven results achieved in 2013, by the beginning of the 2014 tax season, Crofts and the
team believed that the results of the experimentation to date had validated the product. They felt the
time had come to accelerate marketing efforts. He explained the evolution of the plan to improve the
“shopping funnel”:
When we looked at the data, we saw that once people signed-up, the conversion to a
paid customer was in excess of 25%. So, once people understood the product, they liked
it and it worked. Thus, we felt like we had optimized the product to the point where it
was extremely solid, and the challenge now was getting prospects to 1) be aware of
TurboTax’s new service; and, 2) to understand how it worked. That’s where the marketing
push came in.
(See Exhibit 7 for results from tax year 2013 in the context of earlier years and other online
businesses.)
Crofts also recalled that,
The ideas we were developing around experimentation, as well as the tools and
analytics we were using…we also shared these with other teams within Intuit as we
learned. I have to say that even when there were some discouraging situations with
respect to the development of the PersonalPro business itself, there was always a lot of
great feedback from other entrepreneurial teams about what we were doing and how it
was helpful to them. We believed we were contributing to a better Intuit.
(See Exhibit 8 for Crofts’ distillation of some of these ideas around the experimentation process.)
Crofts believed strongly that the strategy should focus on non-returning TurboTax
customers. To date, TurboTax management had only allowed what was described in Intuit as
“trickle testing.” Only a small fraction of their customers were exposed PersonalPro, “say 10,000
out of 75 million visitors to the site” Crofts speculated. With PersonalPro achieving a nearly
double-digit end-to-end closure rate with TurboTax customers versus less than a 1% closure rate
with customers generated through banner ads and search engine marketing, it seemed most
logical to Crofts’ team that they focus on two groups of users-- those that started TurboTax only
to abandon it before finishing and previous users of TurboTax who did not return the following
year.
11
Marketing PersonalPro
As the team began to develop specific plans for the 2014 tax season, it was apparent that utilizing
the TurboTax channel remained a sensitive issue. The value proposition for DIFM customers was
decidedly different from TurboTax’s positioning with DIY taxpayers. TurboTax management was
concerned that promoting ProTax in their channel could undercut TurboTax’s core positioning: “It’s
amazing what you are capable of.” Cook was aware of the sensitivity and expressed a hypothesis as to
its origins:
A few years earlier – prior to Sasan’s Goodarzi’s leadership – the TurboTax team had
identified this uncertainty around doing your own taxes as a barrier to adoption, and they
had come up with the idea of hiring several hundred tax professionals to provide free,
instant answers to users’ tax questions. It was a significant spend, designed to remove
what was believed to be the major barrier we had in competing against tax stores.
Everyone was excited, but we had a lackluster year. People felt they’d executed poorly,
the wait times on calls were too long, etc. So, they hired more professionals for the next
year, and the outcome was just as disappointing. Unfortunately, this was all before our
testing mindset had taken hold, and – in the absence of that – we didn’t have the data that
could have helped diagnose the problem. But, there was consensus that the offer of “tax
advice” had sown some degree of fear, uncertainty and doubt over the customer’s ability
to do her own taxes…why do I need expert advice if it is really so easy?
Goodarzi emphasized the concerns around PersonalPro and its potential impact on the core
TurboTax message:
It was a delicate line to walk. We have tremendous experience working with

consumers, and we know that it confuses them when we deviate from our DIY message.
People come to the site with the confidence to do their own taxes, and if we start
promoting a different message like “let us connect you to an accountant” it runs the risk
of raising uncertainty and doubt in the customer’s mind. Customers think we must not be
very confident about our own software, and they leave.
The DFW Go-To-Market Strategy and Launch Proposal

In November of 2014, Crofts prepared to meet with Goodarzi and Morken to finalize the proposed
Go To Market (GTM) strategy. TurboTax and ProTax team members had developed a strategy they
called “Do the Nation’s Taxes,” a broad and integrated approach to try to peel customers away from
tax stores while keeping non-returning and abandoning TurboTax customers within the ecosystem
Crofts explained: “Because our strategy was so tied to the TurboTax brand, and because they had
such a well-oiled marketing machine, we all thought it made sense to let them drive the integrated
GTM campaign. Certainly, our little team was not going to take the wheel and start driving the
TurboTax marketing and promotions machine.”
The TurboTax VP marketing advocated a plan to saturate one major metro market: instead of a
national roll-out, they would treat one market as if it were a full-strength national roll-out. The
proposed market was Dallas Fort Worth (DFW), in part because it was right in the PersonalPro
backyard, and in part, because it was a fairly representative of the nation as a whole. The TurboTax
team had conducted a broad consumer survey to use in devising the messaging strategy. This time the
results of their survey were markedly different from the survey Crofts and his team had done three
12
years ago. The TurboTax research showed that a significant percentage of tax store customers were
“open to switching.” Crofts recalled:
As we discussed the GTM approach with the TurboTax team, they had a structured
process for designing marketing campaigns. They would start with a representative
survey to determine the key messaging points and then design the optimal market
channel mix. We said, “Guys – we have much better data – all the actual behavioral results
from our testing of the actual product.” But, they wanted to do a big quantitative study,
and they were excited by the results that showed a lot of dissatisfaction on the part of tax
store users. So, where our initial thrust had been to go after non-returning TurboTax users,
they got excited about tax store customers. All the data said that tax store customers spent
less time on their computers, so the digital strategies that the PersonalPro team had
developed were unlikely to be effective. We reviewed the proposed digital campaign, and
- in my opinion - there was minimal display of the PersonalPro product in the
TurboTax.com funnel.
As the potential DFW campaign for PersonalPro was further discussed, it evolved to a multi-touch
strategy with billboard, radio and print to build awareness and drive trial. Messaging for the campaign
in DFW would have several key themes, including: “celebrate a new breakthrough offering from
TurboTax”; and, “Better than tax stores – convenience, quality and cost”. There was a general feeling
that this positioning was a fit with TurboTax’s “empowerment” messaging. The TurboTax team was
proposing to “go big.” They proposed 300 billboards, radio, guerilla campaigns…every media platform
but TV. (See Exhibit 9 for samples of billboard advertising.) This would involve approximately $2
million in media spending, all targeted at the tax store customer.
Morken commented on the strategy:
I saw the abandoning and non-returning TurboTax customers as the lowest hanging
fruit. Generalized search engine marketing was very expensive and kept customer
acquisition costs very high. TurboTax had their own, reasonable concerns about giving
PersonalPro priority in their marketing efforts. The idea of targeting tax store customers
came from some qualitative research done by the TurboTax marketing team, which
suggested different results from what we had seen earlier in the process. They conducted
interviews and found more dissatisfaction with tax stores than we had found. There was
more energy in the combined TurboTax/ProTax team around tax stores and of course less
conflict, so there was strong momentum to go this route.
Goodarzi offered his view:
In the fall of 2014, we had the pieces in place to “go big,” and that’s what the DFW
proposal was all about. We planned to focus on both the tax store and the existing
TurboTax customer, although the latter was always a challenge. We know it sows
uncertainty and doubt when we deviate from our core DIY message. We did plan tests in
Dallas where we would put PersonalPro in a prominent place on the website. And, we
also planned to build in prompts at certain points in the completion cycle where we know
people hit problems and where abandonment rates spike.
Crofts was still torn:
It is exciting that the TurboTax folks are willing to embrace the product and spend big to roll it out,
even in one market. But, I have fundamental concerns about going after the tax store customer. I
13
understand why it makes sense form the TurboTax point of view, but I think it is destined to be
unsuccessful. Everything we’ve learned says that the abandoning and non-returning TurboTax
customer is the most likely customer. They trust the TurboTax name, they are already on-line and
comfortable not sitting in front of a live accountant with their box of receipts. But, it has taken three
years to get to this point…do I really want to push back at this juncture, delay things, and alienate the
people I am depending upon?
14
Exhibit 1 Intuit Segment Financial Summary ($ million, for fiscal years ending June 30)
2014 2013
Small Business
Revenue 2,253 2,057
Operating Income 843 800
Margin 37.40% 38.90%
Consumer
Revenue 1,831 1,708
Operating Income 1,139 1,035
Margin 62.20% 60.60%
Professional Tax
Revenue 422 406
Operating Income 268 260
Margin 63.50% 64.00%
Source: Company.
15
Exhibit 2 Tax Market Overview
Tax Market Overview

(Millions of returns filed based on 2011 tax returns)
Professional
Tax Store DIY
Preparer
72
Kitchen Table
Professional
6
15
Low-End
51
Professional 8
16
15
15 Software
High-End
19 Assisted
Professional 28
20 19
Intuit software share
Source: Casewriter analysis.
Exhibit 3 Timeline of Key Events and Tax Seasons
Sasan Goodarzi
Key Events Crofts appointed MVP Full product assumes leadership CeCe Morken assumes Decision time for DFW
to lead team launch launch of TurboTax unit leadership of ProTax unit Go To Market strategy
2013
2013 Regular
2012 Ext
2012 Regular Season
Ext Season
2011 Season
Tax Year 2011 Regular Season
Ext
Season J F M A M J J A S O N D
Season
J F M A M J J A S O N D
2014
J F M A M J J A S O N D
Calendar 2013
Year
2012
Source: Casewriter.
16
Exhibit 4 MVP Hypothesis
 TurboTax can be expanded as a DIFM brand for tax store customers
 Tax Store customers prefer an experienced CPA to do their returns
 Flat fee/up-front pricing will drive conversion
 Tax store customers will collect and share their documents via mobile phone pictures, scan &
upload, fax
 Tax store customers will be willing to have taxes done remotely (vs. face-to-face)
 Accountants will accept flat fee pricing, affiliation with TurboTax brand, revenue sharing
 TurboTax abandoners will be interested in a professional completing their return
 Fee (after revenue share) is sufficient to attract professional accountants to platform
 Intuit margin is sufficient to make business attractive
 Referrals from social media and online reviews will drive conversion of tax store customers
Source: Company.
17
Exhibit 5 PersonalPro Conversion Funnel—Tax Year 2012 data for various slices of time
Cohort 7 Cohort 4 Cohort 1

Funnel
Stage
April 8 - 11 Mar 1 - 14 Jan 14 - 27
Number of people
Shopping Funnel
Visit 11,023 45,431 11,990
Search 3,197 10,021 1,791
CPA Selection 1,867 4,108 683
Sign-up 1,147 1,985 141
Product Funnel
Document Share 614 951 38
Confirm Estimate 375 488 8
Pay 319 376 8
As a percent of visitors
Shopping Funnel
Visit 11,023 45,431 11,990
Search 29.0% 22.1% 14.9%
CPA Selection 16.9% 9.0% 5.7%
Sign-up 10.4% 4.4% 1.2%
Product Funnel
Document Share 5.6% 2.1% 0.3%
Confirm Estimate 3.4% 1.1% 0.1%
Pay 2.9% 0.8% 0.1%
Source: Company.
18
Exhibit 6 Tax Year 2012 Conversion Performance by Channel for the “Shopping Funnel”
Teaspiller Search Engine Banner Ads TurboTax

Visit NA NA NA NA
Search * *** * *****
CPA Selection * ** * *****
Sign-up * * * *****
Source: Company.
Note: * Indicates the relative performance of each channel, as measured by the percentage of visitors who successfully migrate to
the next phase of the funnel. More stars are better.
19
Exhibit 7 End-to-end Conversion Rate Comparison
Broad Web Averages

Average across the web 3%
Amazon 4%
Travel & Hospitality 3% to 5%
ZocDoc 5%
TurboTax PersonalPro
Tax year 2012 1% to 2%
Tax year 2013 1.5% to 2.5%
Other Intuit Products 4% to 9%
Source: Casewriter analysis and company.
20
Exhibit 8 Design Principles: TurboTax PersonalPro
Our process revolves around the discovery of insights that will ultimately
lead to improving the customer experience, conversion, satisfaction, cost of
acquisition, etc. Discovery is core to our charge of becoming a viable and
INSIGHTS
growing business that will disrupt the market and take share. Insights are
distilled from multiple sources: conversion analytics (leading and lagging
indicators), customer interviews, observation, and our instincts.
Insights often turn into questions that we have to answer—to prove. We

formulate clear hypothesis supported by the insights and data as part of the
design of the experiment. We often have multiple hypotheses at any given
HYPOTHESIS
time so it is a process of prioritizing and sequencing which to test first and so
on. The hypothesis is designed to have a clear outcome; if this x, y will
improve by z%.
The design brief is the document that organizes all of the supporting
material needed to build an experiment. It ranges from 1 page to 15+
depending on the nature of the question we are trying answer. The core
THE “DESIGN elements of a brief include: the problem statement, the goal, the supporting
BRIEF” data and insights, the hypothesis, potential solutions (including what
analogous businesses are doing to solve a similar problem), sketches and
screenshots, what the competition is doing, and design challenges to consider.
See 20140831_Pro Search Design Brief_v2 as an example.
Before we launch an experiment (before we release code to customer), we

do low-fidelity “pre-flights” with various audiences. This helps us ensures a
higher probability the experiment will yield valid results—results that can
lead to decision making. We use tools like Amazon’s Mechanical Turk and
PRE-
Googles survey tool to get quick feedback in a matter of hours. We also use
EXPERIMENT
Usertesting.com to hear customers describe what they see and expect. We
even conduct “hallway tests” where we grab other product managers and
leaders to show & tell. It is a quick and scrappy way to get feedback. See more
extensive list of tools on next page.
At this point, the engineers have a high fidelity design that is ready to be
coded, QA’d, and released as an A/B test. We use Optimizely.com to help
organize the experiment and measure the new “experience” to the existing. It
helped us manage multiple experiments that could be live at any given
LAUNCH moment. To prove/disprove the hypothesis, we’d collect the conversion data
and behaviors, talk with customers, and constantly seek feedback. If declared
a winner, we release to 100% of our customers and continue to measure.
Customers that are in different test cells/exposed to different experiences
were referred to as cohorts.
Source: Company.
21
Exhibit 9 DFW Billboard Advertising creative examples
Source: Company.
22

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REV: MARCH 26, 2016

Intuit: Turbo Tax PersonalPro - A Tale of Two

Background: Intuit Business Overview

a For fiscal year 2014 ended July 31, 2014.

Background: The U.S. Tax Preparation Business

See Exhibit 2 for summary data on the tax market.

Cook’s Efforts at Reinvigorating Intuit’s Innovation Culture

PersonalPro: The Initial Phase

The idea for PersonalPro sounded fantastically innovative…it was a two-sided

In addition, Crofts recalled:

Crofts also recalled that,

It was a delicate line to walk. We have tremendous experience working with

The DFW Go-To-Market Strategy and Launch Proposal

Morken commented on the strategy:

Goodarzi offered his view:

Crofts was still torn:

Exhibit 2 Tax Market Overview

Tax Market Overview

Intuit software share

Source: Casewriter analysis.

Exhibit 3 Timeline of Key Events and Tax Seasons

Exhibit 4 MVP Hypothesis

 TurboTax can be expanded as a DIFM brand for tax store customers

 Tax Store customers prefer an experienced CPA to do their returns

 Flat fee/up-front pricing will drive conversion

 TurboTax abandoners will be interested in a professional completing their return

 Fee (after revenue share) is sufficient to attract professional accountants to platform

 Intuit margin is sufficient to make business attractive

Cohort 7 Cohort 4 Cohort 1

Teaspiller Search Engine Banner Ads TurboTax

Exhibit 7 End-to-end Conversion Rate Comparison

Broad Web Averages

Other Intuit Products 4% to 9%

Source: Casewriter analysis and company.

Exhibit 8 Design Principles: TurboTax PersonalPro

Insights often turn into questions that we have to answer—to prove. We

Before we launch an experiment (before we release code to customer), we

Exhibit 9 DFW Billboard Advertising creative examples

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