H&R Block went through 6 CEOs in a decade. Its latest chief exec is a marketing whiz with plans to claw back market share: ‘We were kind of that dusty place on the corner’

February 3, 2023, 12:08 PM UTC
H&R Block CEO Jeff Jones in the company’s Kansas City, Missouri office.
Photograph by Chase Caster for Fortune

There are few things more yawn-inducing than tax preparation. Yet strip mall stalwart H&R Block managed to poach Jeff Jones in 2017 to lead the once stagnating financial company.

One might wonder what would entice the former star marketing chief at Target and the second-in-command at Uber to take a corner office job at a stodgy, compliance-driven firm.

Jones offers two reasons. He was attracted to the offer of becoming a CEO, his first time in this role, and the gig would be challenging. His goal was to turnaround a household name that had gone through six CEOs in the preceding decade, was losing market share in the tax preparation space, and failing to adapt to how clients want to be served in the digital era.

“I knew we were trusted, and I knew we were well known, but we were kind of that dusty place on the corner,” he tells Fortune. “I’ve never been embarrassed or ashamed to say I’m working at a place that needs to evolve.”

That self-awareness has led Jones to go all-in on tech, launching the mobile banking app Spruce last year, which lets users access their tax refunds early. Jones is also targeting the small business segment and adjusting how it serves gig economy clients who find tax preparation complex.

About six years in, H&R Block has seen a return to growth—modest, to be sure but growth nonetheless. Annual sales stagnated at about $3 billion when he became CEO and rose last fiscal year to $3.5 billion. “We’re not a [fast] growth company, and there’s nothing wrong with that because we can create a lot of shareholder value by growing 3% to 6% a year, and that’s what we are doing,” he says.

This interview has been edited and condensed for clarity.

Fortune: Target and Uber are far more glamorous than H&R Block. What drew you to this relatively staid company?

H&R Block was going through a crisis of relevance. I knew the company had a great reputation and name recognition, but again, it was that dusty place on the corner, and the company wasn’t growing. It was a chance to determine if we could improve the service, strengthen the culture, and digitize the business. H&R Block has enough assets that are worth doing something with.

Many people’s tax situations have gotten more complex due to phenomena like the gig economy. How has H&R Block adapted? 

People value expertise and help, period. So when the economy goes crazy, when you’re getting new sources of income from different places, people don’t know what to do. So that’s where the strength of the brand comes in. People know that we do taxes. Every year, our 80,000 tax professionals go through between 60 and 100 hours of training. About 10% of our tax professionals are attorneys for the most complex situations.

There have long been cries, notably among Republicans, to address that complexity by junking the tax code and implementing a flat tax on a post-card sized form. Would that kill H&R Block? 

It won’t happen. One of the reasons it won’t is that the U.S. tax code is our way of distributing welfare in America. It is complicated by design with all the credits and deductions people get. They’re incentives for people to pursue the American dream, making taxes more complicated. At the end of the day, we don’t control tax laws. 

Some Republicans have also talked about slashing the number of IRS auditors and enforcers. Could that hurt your business if people feel emboldened to cheat?

No. Most people file a return to get a refund, so they don’t think about not filing properly. The average American gets a refund of a few thousand dollars.

H&R Block has a new ad campaign with the festive name, “It’s Tax Season.” As Target’s former CMO, do you still have marketing in your veins?

What I have in my veins are customers. What I try to make sure of is that we understand our customers deeply. We have a great CMO who, not long ago, came to us from PayPal. I don’t have to worry about making commercials but rather focus on innovating.

Do you still shop at Target?

Oh, yeah. I still have a RedCard, and I still use the app.

Last year, some 21 million Americans used H&R Block to file their taxes. How do you get more customers? Where does growth come from? 

The core of our growth has to come from the consumer business, and we have reversed that decline trajectory we were on. We have been offering better service and better value. We lost clients when we raised prices so dramatically a few years ago. The second component has been to be more digital and understand that while people still want to look their tax person in the eye, you shouldn’t have to make a trip every time you drop off a document. In addition, we are growing our small business and financial products segments. But if our core consumer business doesn’t grow, we can’t achieve our ambitions.

Let’s talk about small businesses. What’s the opportunity there for H&R Block?

A small business client is someone who runs a little flower operation or a small chain of restaurants. We have about 2 million small business clients. We didn’t have specific products or pricing, or expertise for them. But now we do. We do taxes, bookkeeping, payroll, and stuff like that. Of our 80,000 tax pros, roughly 20,000 have advanced certification to serve small businesses. 

You have 10,000 locations. But with the ability to send documents digitally, and given that many of your advisers— often retired and mostly seasonal—work remotely, do you need that many offices?

We do lease a lot of locations, but we have incredible flexibility to reposition them since about a third of the leases come up for renewal every year. We are also rethinking their size. We don’t need as many, and they don’t have to be as big, but the physical presence and human relationships are not going away.

In 2017, you famously left your job as president of Uber’s ride-sharing business after only six months, saying at the time that the “beliefs and approach to leadership that have guided my career are inconsistent with what I saw and experienced at Uber.” What have you kept from that experience as CEO of H&R Block?

Before joining Uber, I saw a culture unlike any I’d ever seen. Uber’s culture was incredibly strong, but in hindsight, it was just misplaced. The founder recruited me for many, many months before I went. But at one point, I literally thought, ‘I don’t care about money, period. I care about my reputation.’ I knew that wherever I went after had to be different. And I brought that with me to H&R Block because the culture has been completely transformed. 

With Spruce, you are taking financial products more seriously, including a service that allows customers to tap their tax refunds early. What does H&R Block have to offer in such a busy space?

Most people don’t realize we used to be a federally chartered bank, so we’ve been in financial products. It’s not a new thing. What’s new is Spruce. We saw an opening in what the traditional banks offer, but at a relatively higher fee, and what emerging challenger banks do that most people haven’t heard of and don’t trust or know exists. So H&R Block fits in the middle.

Get to know Jones:

  • He intended to major in fashion photography and still considers photography his greatest hobby. (Jones majored in communications instead.)
  • He married his college sweetheart 35 years ago, and because he was D.J.ing to pay his way through school, he took her to a gay nightclub in Cincinnati where he was spinning on their first date.
  • He attended Fork Union Military Academy, a private, all-male, college preparatory military boarding school in Virginia. 

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