Home inspection volume on a national level continues to be softer than normal compared to recent years around this time. Mortgage rates have nearly tripled since this time a year ago, yet housing prices remain high, and according to the National Association of Home Builders, which publishes the Housing Market Index, the housing market is officially in a recession.
Home inspection volume on a national level continues to be softer than normal compared to recent years around this time. Mortgage rates have nearly tripled since this time a year ago, yet housing prices remain high, and according to the National Association of Home Builders, which publishes the Housing Market Index, the housing market is officially in a recession.
As many of us brace for the chillier months of winter, countless home inspection business owners are bracing for future inspection volume challenges due to sustained issues in the housing market and an uncertain economy in 2023.
Turning the corner
We all know the late fall and winter months are traditionally a slower period for most inspectors across the country. However, if they aren’t careful this year, they could easily see a slower season turn into an economic blizzard for their business.
There will continue to be no shortage of speculation on what our housing market is going to do next year, but most housing market prognosticators do agree that things are going to be a lot slower in 2023 than they have been in the past few years. And yes, that downturn will obviously have an impact on inspection volume. Yet, it’s what inspection business owners do during this downturn that will truly separate the success stories from the failed and forgotten. Here’s how to pivot now and improve your odds of becoming a success story when the tale is told.
CX & Speed
As incoming leads become scarcer and home inspection business owners are forced to compete more with each other, they must:
We know inspectors have heard a lot of perspectives and ideas on what they can be doing right now to help their businesses manage through this slower inspection cycle. And there’s some solid actionable advice and insights out there – including the other methods and approaches we cover in this series that can help home inspectors not just survive during these slower times, but actually thrive. However, a lot of it is tactical. This is helpful when looking for specific actions you can take to help your business better cope with what we’re experiencing right now, but never as effective and impactful, long term, as when they are associated with a comprehensive plan. A strategy behind those actions. And one strategy for truly changing your future as a home inspection business owner from questionable success to a rock-solid, thriving brand, is to sharpen your focus on: CUSTOMER EXPERIENCE.
Uncovering your competitive advantage
When the housing market was going gangbusters, there was more than enough inspection volume to go around. However, as the housing market continues to correct to better fit with current affordability, demand and supply, inspectors are struggling to gain a competitive advantage in an increasingly competitive landscape.
As difficulties persist, some inspectors start thinking about price. Maybe charge a bit less for an inspection. Or they start thinking about their services – offering up free ancillary services and creating more promotions to entice customers. Or they even think about quality – potentially altering or refining their approach to how they perform inspections, the reports they provide, the manner in which they provide them, and more. These approaches aren’t necessarily wrong, but the tough reality is, it is extremely difficult to build and sustain a competitive advantage rooted entirely in price, services, or even quality. However, it is entirely possible for an inspection business to be the best at how it makes customers feel. And THAT is the game-changer for your business that you’ve been looking for.
The game-changer: CX
Just how likely is it that you’ll close more leads and create more loyal customers simply by focusing more on customer experience (CX)? Extremely. Could it really be that simple? Absolutely! Here’s why.
You might have seen some of these statistics in an earlier post in this series, but they definitely bear repeating:
At this point, some of you might be thinking, “We always provide great customer service to our clients. It’s something we really pride ourselves on.” And it’s at this point we must make a brief, but critically important, distinction between customer service and CX.
The main difference between CX and service is that experience incorporates every touchpoint a customer can have with your brand, and customer service is one single touchpoint. CX doesn’t require interaction with a representative, but customer service usually does.
Experience is also proactive, while service is reactive. With experience, you can delight your customers without them even having to reach out to you. While service usually begins when a customer initiates a conversation when they need a home inspection or other ancillary services you might provide.
When you start to think about the difference, you realize it’s much easier to provide great customer service than a great overall customer experience. And we often hear many business owners speak highly and confidently about the quality of their customer service. But why then, according to a 2018 report by New Voice Media, is poor customer service costing U.S. businesses more than $75 billion a year? Is it possible those businesses who think they are crushing customer service, really are not? The answer is “yes” and “no.”
Many home inspectors do an outstanding job performing inspections. And the reports they ultimately provide can be well-organized, insightful, comprehensive, and easy to digest. Many inspectors also quite often interface with agents and customers on-site – and do a fantastic job interacting with those agents and customers. But those three important touchpoints don’t make up the entirety of the home inspection process lifecycle. Meaning, it’s possible to positively crush those three customer service touchpoints, but absolutely fold like a cheap suit on other fronts.
The American Customer Satisfaction Index (ACSI®) reported this year that customer satisfaction in the U.S. is at its lowest level in 15 years. So, when you think about all those statistics that clearly outline the massive benefits to businesses simply by focusing on providing a better experience to their customers, why do businesses continue to do it so badly? The more important question we pose to home inspectors is, “Don’t you see a massive opportunity staring you right in the face?”
Whether referencing studies done by the Temkin Group, research performed by SuperOffice CRM and Walker Information, or a dozen other sources that cite data about the importance of customer experience for businesses, the conclusion is crystal clear: Investing in CX initiatives can dramatically increase your revenue.
And where does this revenue come from exactly?:
The need for speed
As we noted, knocking it out of the ballpark when it comes to providing great customer service on a case-by-case basis is a far shot easier than providing an exceptional, end-to-end customer experience every time. But if you’re REALLY looking to gain a competitive advantage right now and set your inspection business up for success in the near future and beyond, then it’s time to really up your game by investing in CX.
If you accept that CX is the best way to close more leads and gain and retain customers, then the next step is to determine what processes you must stop, start, or change to markedly enhance CX. But candidly, that can be a tall order for any business. There are nearly infinite ways a business could alter its behaviors and approaches to enchant customers and prospects, but it turns out…there is just one that matters most: SPEED.
But first…the “must-haves”
Before we dive into why “speed” over all else, let’s make sure you have some basics in place when it comes to optimizing for customer service at multiple touchpoints. It’s investments in these basic initiatives that will serve as the foundation for dramatically altering your CX and bolstering your competitive advantage in your market.
The state of speed
Responsiveness. Your customers want you to be responsive to their outreach and requests. And they want you to be quick about it.
In many scenarios, business responsiveness has been imperiled by the pandemic and its aftermath. Thankfully, this isn’t a scenario that is overly prevalent in the inspection industry. Nonetheless, customers have been forced to wait in ways that would largely have been unthinkable pre-pandemic. And now, customers are, well, over it.
According to a national Consumer Patience Study performed by StatSocial this year, nearly three in 10 customers expect businesses to be MORE responsive than before the pandemic, at least in terms of response time. This includes when a lead or customer contacts a business via email, text, live chat, social media, or messaging applications. Just how responsive? According to HubSpot Research, 90% of customers rate an "immediate" response as essential or very important when they have a customer service question. And 60% of customers define "immediate" as 10 minutes or less.
How speedy do you need to be when you’ve got a lead or customer on the hook? Speedy!
Speed and revenue
Being faster than your competitors isn’t just a nice attribute to possess. It can be the difference between success and failure for an inspection business owner. Why? Because your potential customers are voting for fast when they make purchases, or when they choose not to do so. In fact, 64% of customers say speed and responsiveness are as important as price when they decide where to make a purchase. (The 2022 Consumer Patience Study)
Consider the following. How likely is it that someone who calls your inspection business and gets a voicemail will simply move on to the next inspector or inspection business on their list? According to a study by Consumer Reports, 75% of callers who can’t reach a live person at a business will not leave a voicemail. Maybe this number is less for your business, but do you know what that number is? Your repeat customers and agents are more likely to leave a voicemail, but will new business leads?
More than half of all customers (52%) have willingly paid more when making a purchase to work with the business that responded FIRST. (The 2022 Consumer Patience Study). That number alone should be a huge motivator to enhance the rapidity of responsiveness for any inspector.
Speed and loyalty
Customers will come back again and again to those inspectors that are consistently fast. According to research performed by Salesforce, an overwhelming number of customers (85%) say that speed and responsiveness are key components of their brand loyalty. Conversely, that same study shows brands that take longer to respond than customers believe they should face a meaningful loyalty decay.
The impact of speed on loyalty covers the full range of the buyer’s journey and home inspection process lifecycle. Whether answering questions for a new business lead, addressing issues during the inspection process, or responding to inquiries about a report, speed becomes a critical factor in making a customer “sticky.”
Speed and how it makes your customer feel
One of the main reasons speed or lack of speed correlates to revenue and loyalty is that being faster (or slower) than your customers expect creates strong and meaningful feelings within those customers.
Face it, we’re in a time where customer service is often mediocre at best. So, when we get immediate attention to our customer service needs, not only are we a bit surprised, but we’re often downright giddy. It feels great. Refreshing for a change. When asked how a customer feels toward a brand or business when they respond to you faster than expected, 56% said “appreciated,” 53% said “valued,” and 41% said “respected.” (The 2022 Consumer Patience Study).
CX & Speed: 5 ways for improving business now
ACC (America’s Call Center):
ACC is a fully integrated customer service and communication-handling solution exclusively for home inspectors – no matter if you’re a sole proprietor or a multi-inspector firm.
ACC has 25 years of experience and knowledge of what it takes to successfully navigate more challenging economic cycles. And when budgets are tight, it’s good to have a partner that has a history of producing an increase of 15% – 30% in revenue after inspectors begin services while only paying an average of $2 – $5 an hour for those services. That’s a big boost for such a small investment! We are inspectors’ smartest approach to growth and the essential partner that will make all the difference for your business. During this shift in our industry, make a shift for your business. Make a shift to ACC.
As we previously noted in the first post of this series, home inspection volume on a national level continues to be softer than usual this time of year. Now, with winter around the corner, combined with sustained challenges in the housing market and an uncertain economy, home inspectors remain concerned about the future of their business.
Shifting gears
We all know the late fall and winter months are traditionally a slower period for most inspectors across the country. However, if they aren’t careful this year, they could easily see a slower season turn into an economic blizzard for their business.
While there’s no shortage of speculation out there about what our housing market is going to do over the next year, most housing market prognosticators do agree that things are going to be a lot slower in 2023 than they have been in the past few years. And yes, that downturn will obviously have an impact on inspection volume. Yet, it’s what inspection business owners do during this downturn that will truly separate the success stories from the failed and forgotten. Here’s how to pivot now and improve your odds of becoming a success story when the tale is told.
Driving & delighting
As incoming leads become scarcer and home inspection business owners are forced to compete more with each other, they must:
We encourage you to explore the other methods and approaches we cover in this series that can help home inspectors not just survive during these slower times, but actually thrive. However, there’s little debate that engaging in the right marketing efforts while having a strategic plan for managing the greater customer experience, are always things an inspection business owner should be doing. No matter if economic times are lean or fat.
Upping your marketing game: A list of “must-dos”
It’s simple. When there’s less inspection volume, you have to compete more for leads. And marketing is all about promoting your brand in the market to drive more of those leads so you can convert them. However, these days, there are a dizzying number of methods for reaching your audience. But when budgets get tight, it’s time to narrow your focus on where you get the greatest ROI. Here are a few key areas you’ll want to make sure you’re investing in right now:
As you engage in promoting your business and services in the market, it’s important to remember to do it all in a clear, consistent, and branded way. Whether your audience interacts with or has exposure to your brand on a website, on social media, in a marketing flyer, or in an email, you must present it in a way that is unique to your brand’s voice, its look and feel (color pallet, logo, tagline), and that it produces the perceptions you wish to convey to your audience.
Managing your leads: A comprehensive approach
Now that you’re successfully promoting your brand with your target audience, expanding awareness, and building interest, you need to ensure that every lead crossing into your brand territory is closed, delighted, and ready to return for another round of awesome – hopefully in the near future. Here’s how to greatly improve your chances of nailing this most highly coveted trifecta of business-building outcomes.
Incoming
These days, potential customers expect to find your business and request to engage in the services and products you provide quickly, easily, and in a multitude of ways. Phone, email, text, business and referral websites, social media, and more. The convenience this provides to a would-be customer is immeasurable, but for the inspection business owner, it means you MUST have a process in place to manage those incoming leads as they flow in from those many sources.
Every incoming lead is always important and should be handled strategically and with care. But right now, especially so. You simply cannot afford to lose a customer because you let an incoming call go to voicemail. Or maybe you missed a text message and then forgot to respond until the next day. Or perhaps you didn’t see an email until several hours later because you were on an inspection and then it got pushed down further on the list as the day went on.
The simple act of responding quickly to an incoming lead in our industry is a business imperative. Did you know it’s been estimated that as much as 85% of callers who can’t reach an inspection company on the first try will not call back? And according to Consumer Reports, 75% of those same callers will not leave a voicemail. It’s also been proven that companies who contacted leads within an hour were seven times more likely to qualify a lead than the companies who decided to contact a lead just an hour later and sixty times more than the companies who waited 24 hours or longer.
The bottom line is...if you don't respond immediately or soon after to an incoming lead, the odds of you converting that lead decrease dramatically. If you haven’t already, make the investment in establishing a thorough process for managing incoming leads so you can be as responsive as quickly as possible.
Closing
Just because a lead comes knockin’, that doesn’t necessarily mean you’ll get the job. Some inspectors answer their own phones and emails, respond to messages on social media and from their website, and more. They often feel there’s no better person to speak to and interact with a potential customer about the services they provide and how they provide them than the owner. And this may be hard for some inspectors to hear, but in most cases, they would be wrong.
The simple fact is you shouldn’t be the inspection business owner, the inspector, AND the sales manager. We know this because after a quarter of a century serving inspectors, we’ve closely analyzed the lifecycle of small- to medium-sized inspection businesses; and our experience overwhelmingly shows that the most successful ones are those whose owners focus more on doing inspections and growing the brand – NOT managing leads.
An inspection business can and should automate certain aspects of its lead management process. Automated email and text responses, chatbot integration for websites, and more. Consumers have embraced these technological advancements in communication and are willing to complete simple steps in the transaction process. However, according to a survey performed by research firm Clutch, nearly 90% of your customers will still prefer to talk to a real human being at some point. And it’s absolutely in your best interest for this to happen!
For example: A call comes in and they need a home inspection. Ah, the beginning. This is your opportunity to upsell your ancillary services. To educate, if needed, the caller on the process. To ask key questions about property specifications, access, utility considerations, client attendance, and more. To turn each and every lead and inquiry into an actual inspection – while showcasing what’s unique about the inspector and the brand. Can a form or chatbot do all that? Of course not.
Delighting
Your lead management process should be bound together by a strategic thread. A simple idea that guides each step and activity during the entirety of the lead management process and even through the inspection process lifecycle. To delight the customer.
The good news is, if you’ve established a comprehensive and thoughtful lead management process, you’re most of the way there. But it’s important to listen, learn, modify, and improve your process over time.
While the bulk of what we covered here was about active leads and turning them into inspections, you must also have a process for leads that don’t convert right away. Establishing a process for following up with these leads is just as important as the active ones. And just as you want to delight those converted leads all the way through the inspection lifecycle process – including the final delivery of the report, that last follow-up email, and even a thoughtful holiday card – you’ll want to determine how to do the same for those non-converting leads. Some simple follow-up communications include:
ACC (America’s Call Center):
ACC is a fully integrated customer service and communication-handling solution exclusively for home inspectors – no matter if you’re a sole proprietor or a multi-inspector firm.
ACC has 25 years of experience and knowledge of what it takes to successfully navigate more challenging economic cycles. And when budgets are tight, it’s good to have a partner that has a history of producing an increase of 15% – 30% in revenue after inspectors begin services while only paying an average of $2 – $5 an hour for those services. That’s a big boost for such a small investment! We are inspectors’ smartest approach to growth and the essential partner that will make all the difference for your business. During this shift in our industry, make a shift for your business. Make a shift to ACC.
It’s not exactly breaking news that home inspection volume on a national level has been on the decline for the past several months. Now, with winter around the corner, combined with sustained challenges in the housing market and an uncertain economy, home inspectors are rightfully concerned about the futures of their businesses.
Late fall and winter months are traditionally a slower period for most inspectors across the country. However, if they aren’t careful this year, they could easily see a slower season turn into an economic blizzard for their business.
While there’s no shortage of speculation out there about what our housing market is going to do over the next year, most housing market prognosticators do agree that things are going to be a lot slower in 2023 than they have been in the past few years. And yes, that downturn will obviously have an impact on inspection volume. Yet, it’s what inspection business owners do during this downturn that will truly separate the success stories from the failed and forgotten. Here’s how to pivot now and improve your odds of becoming a success story when the tale is told.
As incoming leads become scarcer and home inspection business owners are forced to compete more with each other, they must:
While there are many methods and approaches we’ll explore in this series on how home inspectors can survive and even thrive during these slower times, one surefire method for improving the odds you’ll close more leads and increase your average ticket price is by diversifying your services.
Think about it. A lead comes in and they need a home inspection. OK, great, but many times, they really need or want more than that. That’s why offering additional ancillary services can be very attractive to customers, as they represent more of a one-stop solution for home buyers. Not only is it a great way to attract and retain more customers, but it’s a great way to boost your bottom line and grow your business. And during a time when you need to close more leads than the competition and boost those average ticket prices, you don’t want to lose one because you don’t offer radon testing or termite inspections.
As a home inspection business owner, you might already offer a set of ancillary services. Some of the more popular ones being offered by the top businesses in our industry today include:
If you’re an inspector who doesn’t offer some or all of these ancillary services, now is the time to invest in adding them into your offering. You already recognize so many issues that affect homes — yet many of these issues aren’t technically within your purview as you write your report. So, now is the time to consider additional certifications in areas you’re already likely well versed in, or which are popular in your area. Worried about the extra investment right now to add in those services? Don’t be.
Too often, when home inspectors begin to experience much slower periods in their businesses, they mistakenly end up cutting out critical business initiatives – sacrificing long-term growth and stability, for short-term financial comfort. Sure, trimming back on some business costs during leaner times is a smart strategy for sustainability, but certain initiatives need to be bolstered, not clipped.
Truly maximizing every lead and upselling your diversified services in a way that feels more helpful than salesy, isn’t always easy. And it can get even tougher during a down economy. But it’s the businesses that have a thoughtful approach to customer service, and a strategic plan for managing the greater customer experience, who will always win the day.
We’ll explore this in greater detail in another blog post, but as leads present themselves, how you market and sell your inspection services becomes just as important, if not more so, than what you sell. Consider the following statistics:
According to a 2018 report by New Voice Media, poor customer service is costing U.S. businesses more than $75 billion a year. And the American Customer Satisfaction Index (ACSI®) reported this year that customer satisfaction in the U.S. is at its lowest level in 15 years. So, with so many upsides to providing a great experience for customers, why are so many businesses doing it so badly?
Most home inspection business owners understand the concept of providing great customer service and the benefits that come from its application. However, the customer experience is a little harder to wrap your noodle around. Because it involves how your agents and clients perceive your brand from the moment they first interact with it, all the way through the inspection lifecycle process – including the final delivery of the report, that last follow-up email, and even a thoughtful holiday card. That’s the “experience.” But bottom line, too few inspection business owners are placing enough importance on customer experience management. During slower times, this will be a costly mistake for some, but an opportunity for others.
Maximizing every lead. Upselling more ancillary services. It all starts by focusing on creating a greater, overall customer experience. Have you spent the time and made the right investments to ensure every new lead and customer will have a great experience with your brand? Ask yourself these questions:
Not every home inspector is a natural marketer or salesperson. In fact, very few are. Becoming an inspector, performing thorough inspections, creating insightful and valuable reports for clients, keeping up with continuing education requirements, and trying to run a profitable and sustainable home inspection business…all that is hard enough. But when an inspector chooses to trim back on business costs that are actually critical business initiatives – like lead management and upselling by highly trained professionals – they are jeopardizing their ability to provide an exceptional customer experience for your clients.
ACC is a fully integrated customer service and communication-handling solution exclusively for home inspectors – no matter if you’re a sole proprietor or a multi-inspector firm.
ACC has 25 years of experience and knowledge of what it takes to successfully navigate more challenging economic cycles. And when budgets are tight, it’s good to have a partner that has a history of producing an increase of 15% – 30% in revenue after inspectors begin services while only paying an average of $2 – $5 an hour for those services. That’s a big boost for such a small investment! We are inspectors’ smartest approach to growth and the essential partner that will make all the difference for your business. During this shift in our industry, make a shift for your business. Make a shift to ACC.
[This article recently appeared in Working RE magazine]
You own a home inspection business. Congratulations! You are a rare individual representing less than 10% of the U.S. working population who is taking the risk to own their own business. It is not easy being a business owner, but it can be an extremely rewarding experience for you and those you help with your business on a day-to-day basis.
You also chose a very competitive industry tied to the real estate market. Depending on where you live, it might only require a simple business license to start a home inspection business. Even in licensing states, the barriers to entry are relatively low when compared to other businesses. According to IBIS World, there are over 32,000 inspection businesses employing almost 50,000 inspectors. This includes sole proprietors, multi-inspector firms, and franchises. The good news is that most home inspection transactions are at a local level. The not-so-good news is that, at a local level, you might be competing against both well-established inspection businesses as well as the newcomers hoping to score big by lowballing prices (which is not good for anyone in the industry).
Real Estate: Not Following Typical Cycles
In addition to a competitive home inspection industry, we have a non-traditional real estate market, where inventory has been at record lows for a considerable amount of time. Add a pandemic on top of the seasonal market cycle and many regions are seeing an even lower inventory—new housing starts are well above median home prices and a shortage of low-income and affordable housing. This can make it very difficult to predict what is next for the housing market! Despite all of that, 2021 was a record year for many businesses while others had to shut down. While there is still expected to be a lot of volatility in the market, 2021 is projected to see existing home sales up seven percent and single-family home housing starts up nine percent (https://www.realtor.com/research/2021-national-housing-forecast/). IBIS World is forecasting that 2021 will end with an over eight percent increase in home inspections over 2020.
What’s going to happen in 2022? Nobody has a crystal ball, but Freddie Mac is predicting that while home price increases will moderate or slow in 2022, home purchase mortgage originations will increase from $1.8 trillion (2021) to $1.9 trillion, with the number of home sales transactions remaining relatively flat at 6.9 million. If that prediction holds true, it means 2022 should see a similar number of home inspection transactions as 2021.
Competitive Landscape
2022 will see a potentially flat market, coupled with new inspection businesses starting in most regions along with some churn with your agent/customer base. These factors could have a significant impact on your bottom line if not anticipated. If you have an established business plan and are hitting all your business goals, great! If not, there are ways to improve.
There are several aspects of your business you should evaluate to see if they are at the level you would expect:
The rest of this article is going to focus on one aspect of your business that can have a tremendous impact: Customer Experience Management.
Importance of Customer Experience Management (CXM)
You may have seen some of the following:
How you treat your customer, from the moment they first contact you and throughout the entire experience, is paramount in not only retaining your agents and clients but is critical to growing your business. In today’s world, it is what separates you from the other inspectors around you. Assuming you already have a solid marketing plan in place, it can be argued that CXM is now one of the most important business growth tools a business owner can deploy. Controlling and managing the customer experience from the very first call (when they are making the decision to use your services) and beyond will make for a happy client, which will translate into a happy agent, which will turn into more referrals, increased positive reviews and more!
What is Customer Experience Management (CXM)?
CXM has been defined as: The discipline of understanding customers and deploying strategic plans that enable cross-functional efforts and customer-centric culture to improve satisfaction, loyalty, and advocacy. (Gartner.com)
Stated more simply…
Perception is a key word here. You’ve heard the adage “Perception is Reality” and that is very true in this industry. You may believe your customers have the best customer experience, but you really don’t know unless you ask and get honest feedback. And that perception is across all aspects of your business. The customer is building a perception of your business and your brand from the moment they hear about you—whether from an agent, a website search, or that first call. Does that first impression set the stage for the rest of their experience?
For example:
And it goes on from there. Are you focused on delighting the customer at every step of the process? Are your marketing materials friendly and engaging? Are you handling leads, offering your services, and booking inspections in a helpful, easy manner? Is handling special requests a non-issue? After the inspection, how would you describe the reaction of your customer? How are you addressing questions or concerns they may have? What are you doing post-inspection to make sure the agent and client received the best possible experience?
How to Develop a CXM Strategy
Here is a four-step process to help you develop a CXM strategy.
1. Understand Your Customer
2. Create a Customer Journey Map
3. Develop an Emotional Connection
4. Capture Customer Feedback
Understand Your Customer
There are several ways to better understand your customers. One of the best is to consider the different types of customers you have experienced, so you know how to market to them. Typical profiles include the first-time homebuyer, the down-sizer, the up-sizer, the investor, etc. Write them down, then create “personas” for them. A persona is a fictional representation of the customer based on what you know about them. A first-time homebuyer might be “Melinda Millennial, who saved up enough money for a down payment, has a steady job and two dogs, and is nervous about homeownership.” Once you capture some of the key characteristics you can tailor your marketing accordingly.
Create a Customer Journey Map
Here is where you want to capture:
• The Buying Process
• User Actions
• Emotions
• Pain Points
• Solutions
There are multiple templates on the web that you can select and tailor to your needs, the important thing is to capture all the different areas where the customer interacts with your “brand,” how they move from one experience to another (initial contact, booking, delivered inspection, post-inspection follow-up, etc.) and what they experience at each step. This may feel like a lot of work that you inherently “know,” but the exercise is well worth the effort. You’ll probably be surprised at the new insights it will bring to your business and brand.
Develop an Emotional Connection
This can be challenging, especially during a pandemic. Still, at the most basic level, when a client or agent is interacting with you, your business and your brand, you want them to feel:
This person/brand/company is honest, has integrity, and I can trust that they will do their best for me throughout the entire process.
If they are not feeling a connection, develop an approach that will get you there. Brands that gain that reputation will be the ones experiencing the growth.
Capture Customer Feedback
Research from Bain & Company shows that 80% of companies believe they are providing great customer service. Only eight percent of their customers agree with them! That’s a big gap. How do you capture customer feedback?
• Send a follow-up email
• Initiate surveys via text/SMS
• Create physical survey forms
• Conduct customer interviews
• Monitor social media channels
• Offer incentives for feedback
• Host social media contests
• Use feedback monitoring sites
• Use a reputation management service
• Reach out to agents who have stopped using you
Bottom line, if you are not asking for customer feedback on a regular basis you probably don’t have a good idea as to what they are really thinking.
Conclusion
Customer Experience Management will require both thought and effort, but once you have a system in place the benefits will far outweigh any costs. And you are not alone—everyone associated with your brand, including your inspectors, office staff, and partners, has a role to play and can help with the ongoing efforts. In the end, if you have a brand that is perceived to be delighting its customers, you will see more business, more revenue, and more satisfied agents and clients.
![13 Business Metrics Every Home Inspector Should be Tracking [Part 2]](https://americascallcenter.com/wp-content/uploads/2021/11/13-Business-Metrics-Part-2.png)
[PART 2 OF 2]
In part one of this post, we explored some of the key business and financial metrics that can directly impact different aspects of your business and ultimately your profitability. Much like the previous recommendations in part one, the following front office, sales and marketing metrics are the base recommended metrics for a home inspection company. They are not exclusive – and if you have others that you track and you see value in that process, you should continue.
As a refresher, let’s briefly touch upon what exactly are business metrics, why they really matter, and what kind of an impact the tracking of specific metrics can have on your home inspection business.
First off…what are business metrics?
Depending on your experiences in the business world, business metrics can mean different things to different people in different situations. In the case of your home inspection business, it is a quantifiable measure of components of your business. They are used to track and assess the various aspects of your business – providing you a good sense of how your business is performing and if you are meeting your business goals.
Why the heck are they so important?
There are three key reasons why metrics are important to your business.
A. It will improve…
Your decision making with business decisions. Often business owners rely on their instincts when making decisions, which can be led by emotion and not objective reasoning. By looking at the data, you can avoid, or at least minimize, the emotional bias with key decisions. By relying on the facts and the data behind them, rather than an opinion, you will make better decisions that will increase the success of your business.
One example is with your pricing. Do you have data that says you cannot increase your prices 10% or more, or are you relying on your gut? By tracking a few items in your business, you can make a change, see how it impacts your business, then adjust accordingly, rather than guessing change is bad, artificially limiting your ability to grow your revenue.
B. You can track…
Your progress towards your goals. Many business owners are tracking their inspection volume, which gives them a map that both tells them where they are and the path of their home inspection journey with the number of inspections. But if you are looking to grow, by setting goals and tracking your progress in other areas (Sales and Marketing, for example) you will be able to see progress you are making and see if you may need to take other actions if improvements are needed.
C. It allows…
You to catch problems. Looking at the data over time will allow you to identify trends and spot a problem before it damages your company. For example, you notice while inspection counts are stable the number of agents using you has declined. What would happen if one or two of those top agents went away? By finding these trends early you can dig in and try to find and resolve the underlying issue before it impacts your company’s bottom line.
What should you be tracking?
As mentioned before, the recommendations below are the base recommended metrics for a home inspection company. The focus is on key metrics that can directly impact different aspects of your business and ultimately your profitability.
Front Office/Sales Metrics
7. Sales Target / Quota
If you are a one-person business, you are your sales team. As you grow, you will bring on partners (like ACC) or go through the process of hiring and managing an office staff to handle your calls, emails and texts to educate your customers to ultimately upsell and book inspections for your business. Setting targets for your team for the number of inspections performed in each month, along with the revenue generated by those inspections, allows you to know if you are on track to reach the revenue goals you have established for your business.
8. Close Rate
As experienced business owners know, not every customer contact (call, email, text, etc.) is an opportunity to provide a service to a customer. The close rate is the percentage of actual opportunities you were able to turn into a sale (revenue). To calculate your close rate, first you must be able to track and categorize your customer contacts for a given month, then simply divide by the number of inspections booked for that month.
Close rate percentage = (Total number of Sales / Total number of opportunities to sell) * 100
For example, you booked 20 inspections in the month, had a total of 150 calls of which 25 were categorized as opportunities. Your close rate would be (20/25) * 100 or 80%. Note that in this industry it can take multiple contacts to book a single inspection, so you do not want to include any additional calls past the initial outreach.
Tracking at a company and individual basis will help you identify opportunities for your company. If your close rate is high, great, you are effective at closing! If not, it is probably time to evaluate your sales process and adjust.
9. Missed Calls
There are several ways to measure this, but the simplest is “how many calls went to voicemail?” More advanced would be “how many calls were dropped after ringing for XX second?” During typical business hours for the real estate world, if a potential opportunity call goes to voice, odds are the caller will reach out to the next inspector on their list.
After tracking this metric, if you discover you or your team are seeing a significant number of missed calls, you will need to explore why. It could be a capacity issue during peak call times (too many calls, not enough people to handle them) or even something as simple as you your phone system not being able direct calls during high volume times.
10. Average Price per Inspection / Additional Services per Inspection
These metrics tend to go hand in hand, and by tracking them you will be able to see how well you and your team are able to upsell your additional services which has a direct impact on the bottom line. If you see changes in performance at a company or individual level, you will be able to take corrective action once you understand the reasons behind the changes. It might mean changing how your team approaches upselling, running promotions in your market for your additional services or evaluating if your competition is doing something new or different (for example, offering services with a package discount).
Marketing Metrics
11. New Agents
In the residential home inspection industry, revenue growth primarily comes from acquiring new clients. Those clients are typically referred by real estate agents. To make sure your business has a broad customer base and is not susceptible to a few agents changing their minds and using a different inspection company, how many new agents have you started working with every month?
Setting a goal around new agent acquisition, then tracking it, will help drive your marketing programs and better guide those investments. While this is referring to agents that have not used your services in the past, agents new to the real estate profession are also a great opportunity to “get in early”. While transaction volume with newer real estate agents is typically low, if you can find them, then help them, they will see you as a valuable partner on their team.
12. Agent / Customer Distribution
Knowing where your business is coming from is key in understanding the health of your business. This is where your business management software should make it easy for you to see this data via built-in reporting. Once you have the data, compare it to your goals for your business.
Combined with the other marketing metrics, this will help you focus on where you need to spend your marketing time and dollars to make sure your business is on a stable footing and ready to grow.
13. Return on Marketing Spend / Breakeven
Simply put, for every dollar you are spending on marketing, advertising, etc. how much revenue is that generating?
Return on Marketing spend = (Sales from Marketing – Marketing costs) / Marketing costs) *100
For example, you run a direct mail campaign to new real estate agents that generated four inspections from new (to your business) agents. If the revenue from those inspections was $1,600 and it cost $400 for the campaign, your return is:
(($1,600 – $400) / $400) * 100 or 300%
You can also use this a simple way to evaluate different marketing campaigns by building up your assumptions around them (how much will it cost and the potential number of inspections generated) and then comparing them.
Breakeven is another simple way to determine if the opportunity makes sense. For example, your average revenue per inspection is $400 and your gross margin is 70%. An opportunity arises for you to spend $1,000 with a local real estate agency to become a “preferred vendor” (a marketing expense) for a year. Your break-even is:
Investment / Profitability per Inspection = Number of inspections to break even
$1,000 / ($400 * 70%) = 4 inspections
If you think the arrangement will bring in at least 4 inspections during that year it is probably worth the investment but should be compared to your other marketing.
Conclusion
For new business owners, this can initially be overwhelming; so, having a business management system, and spending the time to learn and use it, is critical to your business success and growth. And even for experienced business owners, it is important to not spend your time only collecting or analyzing the data without using the insights provided by the data to actively manage your business.
The list above, and in the previous post, is a starting point for making sure you have good visibility into your business’s performance, and you will want to take the time to tailor the metrics to fit your particular needs. Having the appropriate business metrics in place ultimately allows you to steer your company towards achieving the goals you have set.
![13 Business Metrics Every Home Inspector Should Be Tracking [Part 1]](https://americascallcenter.com/wp-content/uploads/2021/08/13-Business-Metrics.png)
[PART 1 OF 2]
First off…what are business metrics?
Depending on your experiences in the business world, business metrics can mean different things to different people in different situations. In the case of your home inspection business, it is a quantifiable measure of components of your business. They are used to track and assess the various aspects of your business – providing you a good sense of how your business is performing and if you are meeting your business goals.
Why the heck are they so important?
There are three key reasons why metrics are important to your business.
A. It will improve…
Your decision making with business decisions. Often business owners rely on their instincts when making decisions, which can be led by emotion and not objective reasoning. By looking at the data, you can avoid, or at least minimize, the emotional bias with key decisions. By relying on the facts and the data behind them, rather than an opinion, you will make better decisions that will increase the success of your business.
One example is with your pricing. Do you have data that says you cannot increase your prices 10% or more, or are you relying on your gut? By tracking a few items in your business, you can make a change, see how it impacts your business, then adjust accordingly, rather than guessing change is bad, artificially limiting your ability to grow your revenue.
B. You can track…
Your progress towards your goals. Many business owners are tracking their inspection volume, which gives them a map that both tells them where they are and the path of their home inspection journey with the number of inspections. But if you are looking to grow, by setting goals and tracking your progress in other areas (Sales and Marketing, for example) you will be able to see progress you are making and see if you may need to take other actions if improvements are needed.
C. It allows…
You to catch problems. Looking at the data over time will allow you to identify trends and spot a problem before it damages your company. For example, you notice while inspection counts are stable the number of agents using you has declined. What would happen if one or two of those top agents went away? By finding these trends early you can dig in and try to find and resolve the underlying issue before it impacts your company’s bottom line.
What should you be tracking?
The recommendations below are the base recommended metrics for a home inspection company. They are not exclusive and if you have others that you track, fantastic! The focus is on key metrics that can directly impact different aspects of your business and ultimately your profitability.
Business/Financial Metrics
1. Total Revenue
This metric tracks the amount of money your company is bringing in. Simply put, without revenue you do not have a business and fortunately this tends to be one of the easiest to track. You will want to look at this from a month-over-month perspective (MOM – which accounts for the seasonality of the inspection industry), year-over-year (YOY – to see how your business is growing) and year-to-date (YTD – to help you with your goals).
2. Overhead – Fixed Costs
A home inspection company is generally a low overhead business when starting out and often increases as you grow. Fixed costs are those expenses that you pay to run your business, even if you are not doing any inspections (those expenses – variable – are covered below). Rent, employees (typically non-inspectors), vehicle payments and insurance are considered fixed expenses. If you do an owner draw this would be a fixed cost as well. You will want to look at this on a monthly and annual basis as a percent of your revenue.
3. Variable Costs
These are expenses that relate to delivering your services (the home inspection and ancillaries). An example would be inspector commissions on services performed. Other expenses that are only incurred because a service was performed would include lab fees, sample costs, etc. You will also want to look at this on a monthly and annual basis as a percent of your revenue.
4. Profit / Gross Margin
Subtract your fixed and variable costs from your revenue and you have your profit. At the most basic level you want your revenue to be higher than your expenses, else it is hard to run your business (unless you are just starting out, then you should have goals in place to get to break even by a certain date).
In addition to tracking your overall profit you should track your gross margin. This will tell you how much profit you are making from each sale. There are several options for calculating it, but for your business keeping it simple is better.
The simple formula is: Gross Margin % = ((Total Revenue – Total Costs) / total Revenue) x 100
For example, if your annual revenue was $100,000 and your total costs were $30,000, your gross margin is 70%.
Gross margin goes together with profitability, and typically as your business expands (bring on new inspectors, expanding your partnerships) you may see your margins decrease a touch while profitability increases. That is okay! When planning you should use both to decide where you may want to invest to grow your business and you should look at this at a monthly, annual, MOM, YOY and YTD basis.
5. Inspection / Services Volume
In addition to tracking the number of home inspections by type, it is important to track all the other services you provide as well. This will help identify trends and areas of future focus. Are you seeing a change in the number of Radon tests associated with a home inspection? Do you see an opportunity to grow your new sewer scope service? How many of your inspections include ancillary services? As the industry is typically cyclical, seeing the trends can help you adjust your marketing efforts to build awareness of other services during the slower times to help maintain your revenue stream.
This will also provide data if you may need to adjust how you are selling your services. Bundling services into different packages may increase ancillary sales if there is perceived value. Based on the trend data there may be indicators that it is time to revisit your pricing. Having a good pulse on all of your services may also help you identify future growth areas.
6. Agent Lifetime Value
Many businesses track customer Lifetime Value (LTV), but due to the nature of the real estate industry the customer is typically a real estate agent, with the client being the home buyer or seller. For a variety of reasons, data shows that the average length of home ownership has increased to over eight years (ipropertymanagement.com). So, unless your client is an investor, the typical lifetime value of a client is the price of a home inspection. Real estate agents, on the other hand, are now averaging 10 residential transactions per year (NAR). The reality is that some agents are doing a lot more than 10 per year, while others are doing significantly less (in some regions there are many part-time agents where the average might be one transaction per year or less!).
Knowing your agents, how many transactions they do a year and how many inspections they book with your company will give you guidance on projecting future revenue and helping hone your marketing strategy. To formula to calculate Agent LTV is:
Agent Lifetime Value (LTV) = Average inspection cost x Number of inspections ordered per year x Average Agent lifespan (recommending capping at 5 years) x Gross Margin
For example, if you have an agent regularly bringing you five inspections a year, averaging $500 per inspection, assuming a 5 year “lifetime” and gross margins of 75%, the LTV of that agent is $500 per inspection x 5 inspections per year x 5 years * .75 or $9,375.
Why is this useful?
In part two of this post, we’ll explore seven other business metrics every home inspector should be tracking, including critical metrics associated with sales and marketing.
[ This article, authored by ACC President Paul Zak, originally appeared in Working RE Magazine ]
Your inspection business is booming, and you are finding yourself stuck between a rock and hard place – you want to grow, but there is not enough time in the day to do anything but work your business and maybe get some sleep.
What is consuming all of your time? Typically, all aspects of the inspection lifecycle, as you are focused on delighting your customers during every step of the process.
[For a refresher on a customer-centric focus, check out our blog here (How Customer-Centric is Your Home Inspection Business? – America’s Call Center (americascallcenter.com)]
So how do you find time to do something different when you are already spending 12+ hours a day, 7 days a week working your business? The first thing you need to do is make a conscious decision to do something different. Invest your time and money in the short term to get the benefits long term.
You have decided to make an investment to grow. Great! So, where do you find the time?
You could try working even more hours, but that is difficult to sustain, especially if you are doing 2-3 inspections a day. Instead, block off time on your schedule (typically an existing inspection slot) to specifically work “on” your business instead of “in” your business. Yes, you will be losing that inspection revenue, but the return on investment will make it worth it in the long run!
You blocked off some time, now what? Start by thinking about how you are going to repeatedly find the time to do something different. To oversimplify, the options generally come down to:
All while keeping in mind your priorities…
If you are doing things in your business that do not fall within those priorities, stop doing them!
Work Harder
This might be an option for some, and this can take on a couple of different forms. The simplest is to add some extra hours to your workday not slotted for inspections. Just keep in mind that family and sleep are general viewed as important 🙂 Or spend some time on your day off to spend some of that time working “on” your business, identifying ways to eventually buy that time back.
Work Smarter
This encompasses looking at ways to become more efficient and effective in running your business, which is essentially saving or buying time.
Have you optimized your inspection process and maximized the capabilities of your report writing software? There are many extraordinarily successful inspection businesses that provide high-quality, on-site or next day reports. Even if on-site is not a part of your business model, if you can have most of your report done on-site you could save hours or more a day. Have you optimized your comment libraries or are you writing custom novels for each report? (And sorry to say, very few people are willing to sit through a 120-page report – it is hard enough to get agents to read the summary!) Are you using the native capabilities of your device for photos, etc. so you are not having to waste time simply moving data around? If you do not know how to optimize your report writing software, you should take advantage of the software’s support team and the various community forums that are available.
Are you taking advantage of your business management software? Have you automated all your agent and customer notifications? Have you automated your invoicing and integrated with a payment processor? Do you have secure, automated report delivery? Are you taking advantage of online scheduling? Are you using your business management software to help drive your marketing activities? There can be a good amount of effort required to initially set up your business management software, but once up and running that can save you even more time during the day, as you are not having to spend your precious time on details that can be automatically handled. Taking the time to learn and utilize the tools you have available now will reap many benefits down the road.
One subtle time killer, that many inspectors do not consider, is an overcomplicated pricing structure. How does this impact your time? If you have 5 different water quality options, 4 different air quality options, different prices for add-on services based on base inspection types, etc. that builds in unnecessary complications in having to understand or explain the differences. In most cases the client or agent does not care, they just want what they need. While there are some areas that are highly price sensitive, most consumers are willing to pay a little more for simplicity. Offer packages, keep your non-mainstream services off your online scheduler and have commonality across add-on service pricing. These are all ways to simplify, saving you time and possibly even increasing your average inspection fee.
Now look at where you are spending your time. If you are making $100-$150+ per hour per inspection, doesn’t it make sense to hire out some of the job functions that are important but probably would not cost you $100 per hour?
But “nobody can do it as good as me!” Ah, yes. That argument. Prepare for your balloon to be deflated because, guess what – that just is not true. While another person might not do it exactly the same way you do, there’s plenty of proof out there that others can do just as good a job as you and sometimes better. There are countless inspection companies in our industry that are extraordinarily successful who do NOT do it all themselves. If you are an “only I can do it” person, you will always be your biggest limiting factor. And unless you get past that, you will be greatly limiting your growth.
Hiring People and Partnering
You recognize that there are resources out there to grow your business. So where do you start? The easiest “go-to” is to hire another inspector to increase your capacity. You will have to make sure you have enough volume to keep them busy, have a plan for a training and a compensation program, and a good general rule of thumb is that if you are repeatedly at 80% capacity or more, you should start hiring now. And as the new inspector ramps up and starts working on their own, you should have more time to further work on your business. Though recognize this also comes with some overhead – as you must find the right person, train them and actively manage them. While in principle it sounds easy and is very necessary, be aware it can consume quite a bit of your time at the start. Talk to your peers who have been successful at this and borrow as many of their processes as you can that make sense for you.
The biggest return you will get is trading your time to find and engage the right partners. For example: Do you have somebody helping you with your taxes? Do you have somebody helping you with your insurance? If you are running your own business, the answers should be “Yes!” which means you already have a couple of business partners.
You have already made the decision to not spend your precious ($100+/hour) time on those activities, now think of where you are spending time in your business that does not absolutely require you to do the work. What might be helpful is to put it into context.
There might be some items that you are not willing to give up (like marketing), which in some cases could be okay, but be cautious. Remember, it is about the ROI. Far too many people fancy themselves marketing “experts;” when in reality, someone can do just as much harm as good by engaging in the wrong marketing activities and spending limited advertising dollars on tactics that simply don’t pay off. The best-case result from this is simply wasted time and money. While the worst-case result could be damage to the brand and your bottom line.
As the president of ACC, I can say without hesitation, that in my 20-plus years of experience in the home inspection industry, one of the other most difficult things for inspectors to give up is answering their own phones and managing incoming leads. Again, the most common argument is “nobody can do it as good as me!” And that very well may be the case; but how can an inspection business grow if the owner never relinquishes that part of the home inspection process lifecycle? Bottom line – they can’t.
However, after two decades of refining our process at ACC for home inspectors, I’ll comfortably put any of our talented customer service agents on the front lines for our inspector clients and their businesses. Because our customer service agents know this industry and they utilize our proven customer-centric growth approach. In fact, our customers see an increase of 15% – 30% in revenue after starting services with us while only paying an average of $2 – $5 an hour for those services. Sure, I’m clearly biased, but that’s a huge value for the dollar.
ACC isn’t the only solid ROI partner out there for which inspectors should seek to engage if they want to grow. There are plenty. Just make sure you spend the time to find the “right” partner. Start by asking yourself a few key questions:
Too often new business owners (and even some experienced owners) bring a “only my way is the right way” mentality when developing a new partnership – which is unfortunate. They do not look at it from a perspective of “this potential partner has been doing their specialty for 5, 10 or even 20+ years; I might be able to learn something from them.” Not viewing the potential arrangement as a partnership puts the partnership in a death spiral from the start, as more than likely the partnership will be deemed a failure with the first potential mistake, probably based on an unreasonable expectation.
If you approach it from a perspective of “I want to find a strong, experienced partner who will work with me to grow” and “I need to figure out how I can take the best advantage of the partnership, even if it means change” you will find an abundant return on your investment. It does not mean that there will not be hiccups along the way, but when they are encountered, how you and your partner work through them will set the foundation for a solid, long-term partnership that will more than pay for itself over time.
Lastly, once you have developed a partnership, make sure to give it enough time to draw the right conclusions. It probably took longer than a month or two to dial in your business processes and to get your phone ringing off the hook. So, make sure you give any partners you decide to work with the same grace you gave yourself. If there are obvious signs that this new partnership simply is not a fit, then by all means call it quits quickly; but otherwise, realize the partnership is an investment on both sides. Consider reviewing your partnerships on a six-month basis, evaluating if you are saving time, saving money, and/or even making money with them. If so, great! If not, are there things that you or your partner can be doing differently to turn that around?
So, what’s next?
Your time is your most precious commodity, so you need to use it wisely. Make sure you are focusing on the bigger picture (remember, return on investment) and are intentional about your business goals. Then make the decision to find the time to work more “on”, and less “in”, your business. Once you have made that decision, are you going to work harder or smarter? Going down the smarter path means you will be bringing on people or partners or both. While they have different sets of challenges, the partnering path (outside of actual inspections) can help bring you positive returns more quickly than hiring, as you are gaining the advantage of having an experienced team you do not have to directly manage. As a business owner, asking for help is a sign of strength, as it shows you want to see your business be successful. If you are content with your state of your business, you probably would not have made it this far in the blog, which is also an indication you are ready to invest in your growth. And with opportunity abounding in the world of home inspections, now is the time to do it!
Your business is booming, with you and your inspectors doing two to three inspections a day, and little time for anything else. That’s okay, right? A full schedule is the best schedule to have for any inspection business. When things slow down you can simply pick up all those things that you stopped doing when things were slower, and all will be well.
For those business owners that want to maintain a healthy, stable business during the periods when the total volume of real estate home inspections slows down, there are five things you want to make sure you are always doing – yes, even when things are busy – to ensure your business stays top-of-mind when the market begins to slow.
#1 Don’t ignore educating new customers.
With changing home buyer demographics, there are a significant number of first-time home buyers who do not understand the value of a home inspection and the services that are typically associated with them. And depending on their agent, they may not realize they need a Radon test, a sewer scope or some of the other additional services you provide. When you are busy, it is easy to think “I do not have the time to deal with this shopper and I am busy enough; so, I won’t really miss the business”. While in the moment that may be true, you run the risk of losing a potential long-term customer. Further, there’s a strong chance you won’t be referred by their agent as a company that focuses on giving the best customer experience.
So how do you spend the time when you don’t really have any to spare? Bring on additional resources to help you.
There are several options available, from hiring an office staff that will cost $15+ per hour per person (who typically work 40 hours a week, and you have to train and manage) to partnering with industry experts to handle your front office (like ACC) that typically costs significantly less, with more hours of coverage and fewer management headaches.
#2 Don’t ignore your website and social media.
Unfortunately, this area is often the first to get ignored when times get busy. Why are these important?
Partnering with a company that specializes in website and social media management can relieve the business owner of most day-to-day management of this important aspect of the business, boosting business while removing headaches. Industry forums (InterNACHI, ASHI) are great places to look for recommendations, as you will want a partner that is focused on the home inspection or real estate industry and not a generic “we’ll manage your website for $19.99” company (you get what you pay for!)
#3 Don’t ignore your pricing.
This can be a sensitive area for some inspectors, and it really shouldn’t be. You are providing a valuable service and it is worth every penny to give the potential homeowner a thorough understanding of the home. There are right ways and wrong ways to raise your prices; so it is important to plan ahead before you do it. In general, if you are booked two+ weeks out or are having to turn away business, you should increase your prices (and hire more inspectors if you want to grow).
Consider this: Home values increased 11.6% in 2020 and are projected to increase another 11.8% in 2021 (per Zillow). If you are averaging $400 per inspection and do a small 5% increase ($20), you could bring another $10k a year to your bottom line. And do not limit yourself to only doing it once a year. There are many successful inspection businesses that use a variation of the two+ weeks out rule who have raised their prices more than 3-4 times each year! It’s simple supply and demand, and it often ends up being a non-issue with agents and clients as they are getting a great value for the money spent.
#4 Don’t ignore your customer follow ups.
Always relevant, but even more so in hot markets. There are many reasons why customer follow ups should be a part of creating an exceptional customer experience, and if they are not, you should consider adding them. In hot markets, while you hear “agents are waiving inspections,” it’s typically the good agents, working in the best interest of their clients, who are not. And these clients may be making offers on multiple houses during their home buying journey. So, if you follow up with them at the start, asking if they have any questions, checking in on how things are going, and simply showing that you care, you’ll create a customer who will want to use your services again. There have been reports of some inspection companies doing 6-8 inspections for a single customer in a single month! With the customer continually coming back despite the all-too-common frustration these days of not being able to buy a home. Those companies are clearly focused on delighting their customers and agents. If you ignore the follow ups, it is too easy for that client to think “Just another home inspection company. Maybe I should shop around since I’m going to be doing more of these things” and move to a competitor.
#5 Don’t ignore your agents.
It is too easy to take your top-performing agents for granted, as you have their business today. But as many successful inspectors know, agents can be a bit fickle. And despite years of working with your company, just one mistake, one little whoops, can result in that agent not using you anymore. And you do not realize it until months go by, when you have time to sit and look at your numbers and realize they are no longer a top agent. Are you staying in touch with your agents? Are you including them in your approach to providing an exceptional customer experience at every touchpoint? Are they aware at how well you are taking care of their customers? Are you thanking them for their business?
Obviously, you do not want to overwhelm them with overcommunication, but you don’t want to think they are forgotten either. There’s an obvious balance to be struck here, but make sure you are doing some of the basics right. Are you dropping them a handwritten “Thank you” note once a month? Are you consulting with them on potentially challenging clients? Are you serving them at the level they need?
And do not forget about your other agents and new agents. While they may not feel critical now, as the markets start to slow you will benefit by having a larger pool of agents who want to use your services. And they can be instrumental in helping you sustain your inspection volumes even during the slower periods. By paying attention to the different areas above, you are setting yourself up for success in the long-term. Ultimately, the home inspection industry is all about relationships, which take time to create, nurture and grow. If you don’t have time to do it yourself (and in many cases, you probably shouldn’t!) be sure to find the right partners with the right experience who will work to help you grow your business. Again, the solution may be to hire part-time or full-time office staff, tap marketing experts, or outsource the management of the bulk of the inspection process lifecycle to an industry specialist like ACC (America’s Call Center) – but whichever partners you choose to bring on, ensure they fit with your vision for sustained success and the strategic path on which to attain it.
While the current COVID real estate market is not following typical patterns, the National Association of Realtors ® is projecting the number of housing transactions (both existing and new) will remain solid, if not increasing in 2021. Despite record low inventories, a flood of new home inspectors into the industry, real estate agents working from home, very tight contingency periods and other factors, many home inspection companies are booked solid for weeks, having to turn away business. Are you one of them? If so, great, hire more inspectors!
If not, why not?
There could be many different reasons why agents and clients are not calling (or texting, or emailing, or ordering online…), and the reasons tend to be different depending on if you are an established inspector vs. one just starting out.
Beginning with established inspectors, we will look at several of the typical reasons behind inspection companies not being busy as the market activity is increasing.
YOU ARE AN ESTABLISHED COMPANY.
So, you’ve been around a while, and you are not busy. The question to ask: Is it your market or you? Are you talking with your peers to see how they are doing? Are you staying close to the current market conditions? If everyone is slow, keep marketing!
If you see that your peers are staying busy or having record years (which many are!), it could be you… The “you” aspect again could be a variety of things, the important thing is to figure it out and decide if you want to do anything about it. So how do you figure it out?
What’s next?
Hopefully the hard part is done, you’ve done your soul searching and have come up with an honest “why”. So, what do you do with it?
If your agents gave you feedback, it is important to understand that their perception is their reality. You need to make a conscious decision – are you willing to do what is necessary to attempt to change their perception? If yes, great! If not, continue reading.
Have you realized, for whatever reason, that you are tired of the business side of your business? The good news is that there are options, depending on the direction you want to take:
YOU ARE NEW TO THE INDUSTRY. WELCOME!
You have recently decided to start up a home inspection business. Congratulations! Did you realize, once you decided to become a small business owner, that your first role is to play Marketing and Sales? Many inspectors come into the industry wanting to become home inspectors, to show up at a home, perform the inspection, share their findings with the client, cash the check and call it a day. There is absolutely nothing wrong with that, but it will not grow a business. The home inspection industry is a relationship business, with most inspections coming from real estate agent referrals.
Have you built up your referral base? If not, go to open houses and introduce yourself. A recent non-qualitative survey of Keller Williams agents in a single market recorded one inspection company showing up at two open houses (out of over 30) in a one-month period. As open houses are typically performed by newer real estate agents it is an opportunity to get established with an agent who doesn’t already have their “go to” inspection company and give established agents a backup in case their current inspector is too busy. Go visit real estate offices to see if folks are coming back, as you might be surprised. Even if they are not, get to know the office managers, try to get in to do office presentations, figure out how to offer CE credits to agents – do what you need to do to establish those relationships.
Do you not know where to start as a business owner? The first easy step is to get tied into the industry associations and forums (InterNACHI, ASHI) and just make sure to ignore the cranky home inspectors that don’t like newbies – there are a lot of helpful inspectors out there that realize it is not a zero-sum game. Another step is to get professional industry coaching. There are several excellent organizations out there at different levels (Home Inspection Whisperer and iGo are two) that can help. As they have already been successful in the industry, they can help you avoid common start up mistakes IF you are receptive to change. If you do not like change, or just want to do inspections, skip down a few paragraphs.
How long have you been marketing your new business? Too often folks are hoping for immediate results, which rarely happens. It can take 6+ months to see the full fruits of your marketing investments, and typical new inspection companies can take 6-12 months just to break even. And once established, you do not want to stop marketing, else the next round of new companies will steal your mindshare.
Are you priced right? A common mistake for new inspection companies is not understanding their market and how their competitor’s price their services. This is not price fixing, but basic market analysis. Another common mistake is thinking “if I price it below everyone else the business will start rolling in!” Unfortunately, time has proven that approach to be a short-term focus that ends in failure – while you will get some business, good agents want the best quality, service and value for their customers and do not want the potential liability of the cheap inspector missing something major. The third common mistake is not providing a similar level of services as your competitors. Key note here, you do not have to do it all yourself, as often there are others (pest companies, radon mitigation companies for radon gas testing) that you can outsource to until you can bring those services (if you so desire) in-house. When starting out, put your pricing in the middle of the pack, and once you are established, do not be afraid to raise your prices (a topic for a future blog).
This started off with a simple question of “it’s getting busy, are you?” and the reality is that there is not a single magical solution, as the underlying reasons as to why you are not busy are varied. Though in all cases, it starts with you understanding what your goals for your business are, doing an honest assessment of where your business is relative to your goals, then deciding to do something about it. There are a tremendous number of resources out there to help strengthen and grow your business if you want to engage them as well as existing inspection companies who are looking to grow who would value an experienced, capable inspector. In all cases try not to let your pride get in the way of helping you find the right path, wherever it could take you.
