The IRS Video Conferencing Failure: What We Can Learn

IRS has lessons to learn after a video conferencing failure.

This may make you smile: the IRS had a bad year in 2018.

The Internal Revenue Service’s attempts to join the online cyber communication trend ended in failure this year as first too much client interest and then barely any interest at all thwarted two of its digital ventures.

The trouble began in April, when the IRS’s website crashed under the strain of millions of taxpayers trying to file returns electronically. The outage lasted an entire working day and was highlighted by one of the better website malfunctions we’ve seen in recent years as frustrated taxpayers were greeted with the message:

“Planned Outage: April 17, 2018 – December 31, 9999”

Adding insult to that injury was the near total failure of the IRS’s attempts at direct video conferencing with its customers. As VC Daily reported at the end of 2017, $5.3 million was spent to develop an IRS video conferencing portal that would offer taxpayers easy access to face-to-face conversation with IRS representatives. However, as of November 2018, fewer than 2,700 people had used the service.

The reasons behind the IRS’s video conferencing failure teach a lesson any small business would do well to learn from, and they underline the dangers of misunderstanding digital communication.

The Story of a Video Conferencing Failure

Having 2,700 people use your first attempt at a direct video connection isn’t so bad if you’re a small business or a startup. If you’re a major government agency that five years ago was attracting more than 80 million online transactions at tax time alone, it’s a very big disappointment. Even more so when you spend millions of public dollars setting up the connection.

How did the IRS video conferencing link go wrong?

The portal was supposed to reduce the cost of providing in-person services to the public by taking things online. It offered a range of services via direct video call but was targeted at the more than 100,000 Americans that get into a dispute with the IRS each year. If you generously assume that the 2,700 users that did access the portal fit that demographic then it means the IRS reached less than 3% of its audience.

According to reports, the reasons for failure were threefold:

  1. Taxpayers prefer in-person contact with the IRS if there’s a local branch
  2. The portal didn’t get enough publicity
  3. The portal didn’t offer the full range of services available in a brick-and-mortar branch

Each of those problems is enough trouble on its own to bring down a digital venture and combined they proved to be insurmountable. IRS auditors have since found the service has promise and is composed of high-quality, user-friendly equipment. However, they also concluded that without significant change it will continue to attract only minimal taxpayer interest.

So, let’s look at each of those three issues and find out what the IRS needs to do differently and what lessons can be learned from the agency’s unfortunate video conferencing failure.

Problem #1: Your Customers Prefer In-Person Contact

This factor comes down to a failure both to understand and to educate your target audience. In an age where the major banks are shutting down branches and sending customers to do online banking, including via video conference, there’s no excuse for a financial agency not being able to attract online attention. Banks face the same primary concerns over electronic security and public confidence as the IRS, but have overcome it by streamlining their online services to make the experience more convenient and efficient than the alternative. As we stated above, millions of Americans already file their taxes online.

Digital technology is not an attraction in and of itself.

The IRS clearly failed to mount a convincing case that going online was a better experience than waiting in line. The same applies to the business world. Digital technology is not an attraction in and of itself. You must mount a demonstrable case that customers are better off dealing with you via video conference.

This should have been an easy case of informing taxpayers they could stay at home and receive the same service while also avoiding the lines and saving time.

Problem #2: Your Customer Doesn’t Know Your Video Portal Exists

This problem goes hand-in-hand with the first. In fact, you can’t inform your customers of the benefits of going online if they don’t even know it’s possible. And in the IRS’s case, they didn’t even need to look beyond their existing communications. The agency’s website is the third most popular government platform and attracted more than 21 million unique visitors in 2018 alone.

Just place a link to–or at least an advertisement about–your video portal on the front of that homepage and you’ve got potentially millions of key demographic customers looking the right way.

Few businesses are fortunate enough to enjoy that kind of internet traffic–the Amazons and Facebooks of the world aside–so small businesses looking to add video conferencing capability to their site may have to work a little harder to get their video availability out there. Still, as with any major venture, it’s important that you do. From search engine optimization to social media and traditional advertising to the modern channels of thought leadership, there are dozens of ways to make yourself heard online.

Once you gain that attention you’ve got to back it up with performance.

Problem #3: Online Service Doesn’t Match In-Person Service

This is down to poor planning. The IRS offers a labyrinth of financial services that ranges from the basic income tax help to the niches of credits and educations. It can’t be easy to replicate all of those intricacies online. So, don’t.

There’s nothing more frustrating and more likely to turn a customer off your service than not being able to meet their needs. We live in a customer-centered economy now, where the internet has given people the feeling that their personal needs should be at the heart of everything a company does…or they simply search for a better deal. Online business is all about the customer experience and if customers try and fail to find what they want once, we shouldn’t expect them back.

Give people a video conferencing experience that adds to their enjoyment of your product.

The IRS’s video conferencing experiment failed because it seems that’s exactly how the agency treated it–like an experiment. Instead of going “all-in,” there was little advertising and no attempt to educate its audience in the benefits of going online. And once some did get online, they found the experience lacking. 

That’s a trifecta that will burn down any digital communications bridge you build.

Be better than the IRS. Give people a video conferencing experience that adds to their enjoyment of your product–one that they want, need, and know how to use.

And if you do attract masses of customers to your online service, make sure you have the capacity to handle them all without your entire site crashing or urging customers to come back in 8,000 years.

Subscribe to VC Daily