The Acquire Podcast Ep. 15: Lili is making taxes sexy, one IRS Cocktail at a time

Welcome to Acquire, Tearsheet’s Marketing Podcast. I’m your host, Tearsheet’s head of studio, Rebecca Cohen.

Before starting out, a little recap on what’s been going on at Tearsheet: last week we wrapped up a very successful and very inaugural Banking on the Planet Conference. And coming up next month, September 15th, is our first in-person event in a long time, Tearsheet's Power of Payments Conference at Current, Chelsea Piers, NYC. 

This is going to be an exclusive event, for the select professionals and brands making a mark and setting the course for the payments space. To be among those few special decision makers, apply for tickets here. 

This week is episode 15 of the Acquire Podcast, where I’m speaking with a company that managed to make the impossible possible, and by that I mean – make taxes fun and dare we say, sexy. I have with me Matthieu Silberstein, VP of creative marketing at Lili. Lili is a banking provider for freelancers – from side hustlers to small businesses. I invited Matthieu to speak to us about launching the campaign for Lili’s Tax Optimizer, their latest product, that helps freelancers understand and manage the annual tax filing process. The launch was just this past winter ahead of the dreadful tax season that ended in April. 

Listen to our conversation about the creative and marketing thought process in the before, during, and now after the launch of the campaign and a truly remarkable effort to make taxes fun, and of course – how all of this plays into Lili’s brand at large.

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The following excerpts were edited for clarity.

First of all, what's up, how's your day going?

The day is going well, it is summer here on the East Coast of the United States and it’s lovely. The weekends are busy and sunny, and it's a good time right now. Can't complain, which is unusual, so I’m holding on to that.

I invited you to tell us how you manage to make taxes less scary, and even fun. Give us the elevator pitch – what’s the Tax Optimizer, why should we care, in 30 seconds or less, go. 

Oh, because you can save money. That's the elevator pitch of the Tax Optimizer. 

Like you said, at Lili, we are a banking app for small businesses and freelancers. From the very beginning, we knew that many of our features really helped these entrepreneurs with their taxes. The problem with taxes is that nobody wants to talk or hear about it – because it's confusing, boring, and scary. 

I've been a freelancer for half of my career. I moved to the United States 12 years ago, and was a freelancer when I arrived, so I had to learn the US tax code, the US business rules, and all of that. I knew firsthand how important it is, because long story short, in my first year as a freelancer, I overpaid my taxes by about $6,000. The following year, I went to an accountant who said, ‘Oh, you shouldn't have paid so much in taxes, you should have gotten a refund’. That didn’t feel good. So I knew personally the importance of taxes.

We have all these features that really helped with taxes – to keep track of your write off, to make sure you always save enough. But what we realized quickly, when we started marketing the product, is that the tax message didn't resonate; it was not something that people immediately connected with. They connected a lot more with more simple, straightforward messaging, like ‘no minimum balance’ and ‘no monthly fees’. Meanwhile, the core value of the product was around taxes, which is one of the biggest financial pain points for anyone who runs a business alone. 

And so last October, after we moved away from trying to talk about taxes in a marketing way (we’ve talked a lot about taxes in our content, on our blog, in the messaging of our customer journey), we said, ‘Okay, there's another tax season coming. Let's go all in and try to make taxes sexy.’ 

That was a little bit longer than an elevator pitch. That's quite a long elevator ride. 

That's my problem in life.

You answered so many of my questions – that was an awesome explanation. The idea is simple – taxes suck, they shouldn’t, we gotta know more about them, Lili’s product already has so many helpful tax features, and this campaign and the Tax Optimizer is about going all in, and niching down on taxes. 

The need for this solution is obvious. The total market cap for this solution is also quite obvious – the freelancer market is not slowing down anytime soon. How many users does Lili have today?

Right now we have about a little over a half a million accounts opened.

And how did your users play into the decision in rolling out the Tax Optimizer? How did you assess the opportunity before deciding this was important and worth doing?

We are always having multiple lines of communication with our users, via social media, customer service, and surveys that we put out. What we realized is that the users who are very engaged with the product and for whom we are the primary bank account, the first thing they talk about is our tax tools, like the tax bucket, that automatically saves a percentage of your income for taxes every time you get paid. You don't know how many times I've heard ‘This feature saved my life.’ It's a little dramatic, but I understand where this is coming from. They also talk about being able to automatically expense by swiping right on a transaction to make sure it's saved as a write off, so at the end of the year they'll remember they need to deduct that from their taxes. 

So while on the paid social ads, the most clickable things were ‘no monthly fee’, ‘no minimum balance’, and ‘fee free overdraft’ – when people used the product, what they really appreciated and cared about was the tax tools. Those were the valuable customers, because those were the customers who understood our product perfectly. We decided, ‘Okay, this is what they like. And these are the users that we want, so we need to go all in – even if we're not going to get the same amount of accounts open, but at least we'll get the good ones: the people who will understand what we're saying and will be the right customers for our product.

Looking back on Lili’s origin story, it’s interesting that this is only now coming to your forefront, because taxes were always core to your product and your purpose. This is not just rolling out a new product, but really honing in on your mission and fine tuning the customer base. Focusing on taxes and not the obvious ‘no monthly fee’ honeytrap, you’re risking losing a lot of customers in exchange for having the right customers and serving them in the best way possible. That’s refreshing. 

Correct. It’s always been in the product and in the content, but it has not always been in the marketing – because in the fintech space there was this race toward getting accounts and users.

The first thing we did was repackage the product. We created the Tax Optimizer Tool Suite, combining the write-off tracker and the tax bucket; we also released the Schedule C generator, so freelancers can generate, within the app, the tax form they need to report their income and losses. Once we had these three big features, we created a package around it, called The Tax Optimizer, created a mini brand around it, and then it was about sending it out in the world.

So let's talk about the naturally sexy stuff – the creative side of things. Once you had a well thought out and packaged product, and you’re sitting around the (virtual) table to figure out how to roll it out: What was the first step? What minds did you have working on it? What tools did you utilize to make taxes sexy?

It was a challenge. We wrote ‘Making taxes sexy’ on the wall and said, ‘Let’s figure out every way we can do that’.

We onboarded a few creators for influencer marketing, who themselves being small business owners or freelancers understood that problem very firsthand. Then we created a little product video, trying to simplify as much as possible and make it visually clear as to what the product would look like. Then we did two things. 

First, I started to do a webinar for our users who onboarded, and I shared my experience as a freelancer, which is something that people connected with a lot. They didn't care that I was running marketing at Lili, but they cared about the 10 years I spent as a freelancer, and everything I learned by producing all the content around taxes. This became this one-on-one conversation with our users. 

I shared my stories, and every single time, people were very grateful at the end for everything they had learned. They were very grateful that I was honest about my own experience and dramatic failures as a freelancer; so webinars are not sexy, but direct human conversations, in a way, are sexy. In the past few years, we haven't had those. So that was one of the things that really showed us how important and relevant it is for our user base. Even people who don't use Lili were like, ‘Oh, my God, this product is great,’ because they understand exactly what it is. 

The second thing we did was come up with this concept of a party, because that's what's fun in life, right? Coming from Europe, I always found it super interesting and funny how America has a party for everything: bachelorette parties, baby showers, now there are even divorce parties. I thought, ‘Maybe we could create an event around this deadline that every freelancer dreads.’ So we did a media and influencer event, we called it the Tax Filing Party, in New York, a few days before the deadline. 

Because a lot of influencers, creators, and reporters are freelancers themselves, we decided to have accountants on site to answer any questions; we had a tax advisor bar with accountants who are able to answer our guests' questions around taxes – and they actually used it a lot more than I thought. There are a lot of questions out there, which shows, again, the relevance of what Lili is doing. 

We also created a cocktail called The IRS. We made a survey interviewing Gen Z's and their relationship with taxes, and released it at the party. We really went all in on the content side, pushing blogs on the site, and trying to understand and talk about the relationship of America’s new generation with taxes. 

I appreciate you leveraging your own experience as a freelancer both behind the scenes and on stage, so to speak, when making this, because you really understand the pain points. Making taxes fun is hard because not only because they’re complicated, it just brings about a lot of anxiety because money is so emotional for all of us. Personal finance fintechs have to know that and be sensitive to that. It’s especially true for small business owners without that payslip security. Bringing the spirit of education, conversation, and community to taxes seems very empowering – which is the perfect antithesis to that. 

I think you're 100% right. At the end of the webinar, there's a chat where people express both relief and excitement – after I talked about taxes for 40 minutes. From the people who stick around (we get about 90-95% retention), we get a lot of excitement; there’s something a little nerdy about understanding taxes. Sometimes math is fun. And it’s sexy to not be scared of something anymore. All of a sudden, it's a sigh of relief, and you're like, ‘Okay, I'm gonna be able to do this. I can put taxes aside, and focus on my business now.’

To recap how you managed to make taxes sexy: create transparent tools that actually help, provide straightforward education, and create media that is engaging – which you did both virtually with the webinars, and in-person the Tax Filing Party. 

So let’s talk numbers (as much as possible) – how do you measure the direct or indirect success of the campaign so far?

It’s a little hard to measure, obviously, as we all know. I don't know who said it but I love this saying: “In marketing, 50% of your budget goes to the trash, and you don't know which 50%.”

What I can tell you is that the average tax return that Lili users received this year was almost double the average of last year. So our users are getting bigger tax refunds. There are probably a million reasons for that – the tax code changes, the child tax credit, and the stimulus. But they’re also doing it better: making sure they don't miss on any write offs. So that's one number that we are very proud about, and we believe shows something. 

The other measurement is people’s reaction, and hearing, ‘the tax bucket saved my life’, or ‘Oh my god, 100% of what you just told me is completely new to me, and I'm 30 years old.’ 

That's what we're getting in terms of feedback, and this is how we’re measuring this campaign at the moment.

Very powerful customer retention there, once you even save someone's life, so to speak…

After that, if they leave you…

So before we let you go, I want to tie all of this back to Lili’s brand at large. The origin for Lili may be tied to taxes, but today you’re doing so much more – you’re a whole banking provider  for freelancers. You’re talking about making taxes sexy but how does Lili’s brand at large make banking and finance sexy?

From when we launched in 2019 to today, a few things happened. There was already a movement where the younger generation was going to freelance more; technology allowed people to work remotely; people didn't want to work for The Man; then COVID; then the Great Resignation; flash forward, we're now three years later, and America is having a solid, deep conversation about its relationship with work and its relationship with success, which is what is driving this Great Resignation. 

At the same time, people are willing to make less money to spend more time with their loved ones, moving away from cities where they’re drowning in pollution – it’s all happening at the same time. 

So at the moment, we’re reshaping our brand book to adjust what we were saying in 2019 to everything that has happened in the world; it’s an interesting exercise that I've been doing for the past two weeks. 

What's interesting is that we didn’t need to change too much, because our messaging back then was already there, we just needed to refine it. 

I call our brand book ‘The Constitution’, where every single word and phrase is actually very important. Every time we develop a product, every time that we put a marketing ad out there, or anytime we write an email for our users, we need to match it with this constitution and make sure it fits with how we define our mission. 

Our mission is to help small business owners and freelancers be successful, no matter their definition of success. ‘Success’ three years ago didn’t mean the same thing it does today, especially for the new generation. So it's about making sure that everything we write in our brand book, – the mission, the proposition, the values, the personality – reflects who our users are today; and our users today are different from the users of yesterday. To me, and to Lili at large, oru users are not businesses or entities. – they're the business owners. And that makes a huge difference in the way we speak, the way we create content, what we develop, and the way we present ourselves.