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The Importance of Customer Experience Management (CXM)
22 Dec

The Importance of Customer Experience Management (CXM)

[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:

  • Branding – Do you have a personal brand or a business brand? Is it clear, concise messaging? Do people know your company and what it stands for?
  • Business Development and Marketing – Are you doing regular agent and customer outreach? Are you engaged online?
  • Lead and Sales Management – Are you educating clients, booking and upselling your services at the highest possible level?
  • Inspections – Are there opportunities to increase efficiencies with your existing systems?
  • Customer Experience Management – What are the experiences for the agents and clients who engage your company? Are you considering the experience from before they reach out to you to well past the inspection report and summary?

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:

  • 80% of customers say the experience a company provides is just as important as its products or services – McKinsey & Company
  • 70% of buying experiences are based on how the customer FEELS they are being treated – McKinsey & Company
  • 67% of customers say they would definitely be willing to PAY MORE for a great customer experience – McKinsey & Company
  • 51% of customers will never do business again with a company after just one negative experience – Forrester Research
  • 33% of Americans say they will consider switching companies after just a SINGLE INSTANCE of poor service – American Express 2018 Customer Service Study

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…

  • Customer Experience (CX) – The perception of your customer on their interactions with your company.
  • Management (M) – The process of identifying how well (or not) your company is meeting the customer expectations with each interaction between the customer and your company and putting plans in place to maintain areas that are currently positive and improve areas that are not.

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:

  • Do your agents say “You need to give XYZ Inspections a call, they will take great care of you!”?
  • Does your website give the impression you will provide them with a great experience, or does it overwhelm them with details?
  • When their call is answered after a few rings, does a friendly voice greet them, giving the time to answer all their questions about one of the biggest purchase decisions they may be making in their lives?

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]
05 Nov

13 Business Metrics Every Home Inspector Should be Tracking [Part 2]

[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.

  • Do most of your inspections come from a few agents? If so, focusing on expanding your agent base should be a priority, in the event one of those agents stops using you for any reason (retirement, moving, you upset them…)
  • Do you have a broad base of agents using your services? If so, great! The next step is to see how the clients are distributed across those agents and see if there are opportunities to gain more of an individual agents’ 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]
10 Aug

13 Business Metrics Every Home Inspector Should Be Tracking [Part 1]

[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?

  • It can help you decide how much to spend on attempting to acquire new agents.
  • It can help you decide where to invest with your existing agents.
    • You will be able to see which agents provide the most value to your business.
    • You will be able to see which agents have potential to provide more value to your business.
    • If you have an agent who has only ordered one inspection from you, but they are a top producer, building that relationship to attract more business will increase the value of that agent and generate more revenue for your business.
  • You will be able to see where you should shift your investments to get the greatest return per agent.

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.

Top 5 Things You Cannot Afford to Ignore When Busy
04 Jun

Top 5 Things You Cannot Afford to Ignore When Busy

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?

  • Relevancy – In most regions of the country web searches to find inspectors are increasing; so, keeping your website updated with new content and active SEO (Search Engine Optimization) will help you push to the top of any searches. Google Ads can help as well to expand visibility and relevancy.
  • Brand – Your website and social media posts reflect you and your brand, and potential customers will often go to your website to determine if they want to use your company. Is your website clean, simple to navigate and easy to understand? Or is it cluttered, with way too much information and challenging for a new home buyer to figure out what you do, what makes you different, and ultimately, why they should use you? Do your social media posts reflect your concern for your client? Are the posts informative, helpful, and valuable? Start by considering how you want to help them with one of the biggest purchases they will ever make and most social media posts will take good form.
  • Security – If you are managing your own website this can be a challenge. While typically the home inspection industry is not a target of hackers, it’s important to stay diligent – as too many companies have been compromised through vulnerabilities on their website.

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.

It’s getting busy in the inspection world. Are you?
28 Apr

It’s getting busy in the inspection world. Are you?

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?

  • Ask!
    • Ask your top trusted agents that are still using you if they would provide you honest feedback. Let them know that business is down and that you are trying to understand how you can get back into growth mode.
    • Reach out to agents that have stopped using you and ask why they have stopped. Do not call those where you may know the reason why, but if there are some where you are not aware of any issues, ask.
    • In all cases, approach it with an honest effort, expecting to hear things you probably do not want to hear, and don’t get defensive. Thank them for their feedback no matter how hard, wrong, or bad it is, and if you are willing, let them know that you want to earn back their business and solicit how you can do it. It is not an easy thing to do, but critical if you discover you have a negative reputation within the agent community for whatever reason, deserved or not.
  • Analyze
    • Take a step back and look at your marketing efforts – have you been content while your competitors have not been complacent? Are you “out of sight, out of mind?”
    • Think on your customer’s overall experience, from the initial call from the agent or client to the post-inspection contact. Are you and your company focusing on delighting your customer throughout the entire experience? Is it easy to book an inspection? Are they always getting your best? Are you giving the perception that every customer is the most important customer? Are there things you could be doing to improve the customer experience?
    • Honestly assess your mindset. Do you hate having to be in Sales and Marketing? Are you tired of running your business and just want to inspect? Have you been ramping down as you are planning on retiring in a few years? Your mindset has the biggest impact on your business and your agents and clients will see it even if you don’t.

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:

  • Maybe it is time to sell, if you have something to sell. This is where pride can be a real stumbling block, and further honesty is often required. If you have not been doing many inspections, you don’t have much to sell, but your phone number might be worth something to a growing inspection company. Nobody will buy your company based on its potential if the potential was not realized. If you have a solid business, and are willing to help with transition, you have a good asset that you should be able to sell.
  • Maybe it is time to consider simplifying your life and work for another inspection company. With your peers that you know, like and trust, talk to them about the possibility of you working for them. If you have a good reputation and have good experience you should be able to negotiate a very favorable arrangement. Will you be making as much money as you were in your business? Maybe, maybe not, but the biggest trap for folks making this transition is again looking at the potential, and not the reality, as well as looking at some of the other non-tangible benefits that will come of it. As an owner you might be pulling in 70%-80% on an inspection, and as an inspector 40%, but if your new company can keep you busy you may end up with an equivalent income (or more) with a lot fewer headaches and a higher quality of life!
  • Maybe it is time to invest.
    • Partner or hire in those areas you do not want to deal with. Often the biggest challenge here is “nobody can do it as well as I can.” Which may be true, but that is an excuse, as hundreds of highly successful inspection companies have successfully partnered and hired all of the different aspects of their business. Do not be your own limiting factor and try to find the right partner while trying to be a good partner yourself.
    • Do not be afraid to ask your successful, growing peers about their partners. You may be surprised at how many are willing to share to help you be successful. Why? The smart inspection companies realize that if they have strong competitors out there it not only raises their level, but it is good for the industry as a whole. And if they are busy, they might kick some business your way for a referral fee.
    • Find a good coaching team to help you refine your business goals, help identify the areas that you need to invest in, and most importantly, keep you accountable once you set your goals. While it can be difficult to share the details of your business with others, getting that honest feedback from those that want to see you successful can only help.

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.

How Customer-Centric is Your Home Inspection Business?
21 Dec

How Customer-Centric is Your Home Inspection Business?

In today’s home inspection industry, competition for customers is more intense than ever. And there exists a multitude of marketing tactics any inspector can employ to reach a variety of demographics. However, while marketing is incredibly important, studies continue to show that an enhanced customer service experience quite often surpasses those marketing tactics — and serve as a powerful marketing tactic in its own right. In the following, we’ll take a look at the importance of providing exceptional customer service — and how it can actually boost your home inspection business and its bottom line.

In an article on Forbes.com, contributor Shep Hyken states that customers expect above-the-bar service with every experience, and they make decisions such as repeating business or taking their patronage elsewhere based on just one subpar experience. Hyken writes, “Your customers no longer compare you just to your direct competition. You are being compared to the best service they have ever received… Customers now know what great customer service looks like, and they expect it from you.” Sound a little unfair? Sure does! But if your customer is riding high off of their amazing meal from last night at that local five-star restaurant with the best, most charming, attractive and attentive wait staff in town, well…you better be ready to meet (and maybe exceed) those customer service expectations they now have fresh in their mind and will be comparing to your approach to customer service.

Excellent customer service even outranks quick service. Shocked? I mean, who doesn’t love quick service? We’re Americans! We want everything yesterday. However, turns out, we’re willing to sacrifice a bit of time for excellence.

After being faced with an onslaught of “potential spam” calls on their smart phones, automated call services that give them the runaround, and online chatbots, Glady.com’s 2018 Customer Service Expectations Survey found that customers prefer a personalized customer experience far more than speedy service: “Sixty-one percent of the people surveyed felt they were treated like case numbers rather than people. The survey found that 59% of customers said being treated as an individual was more important than how fast the issue was resolved (53%).”

Is it any surprise that after so many years of companies making “progress” on how fast we manage the sales and service process – sacrificing that personal touch and those basic human interactions called “conversations” – that we’re now experiencing a shift back to a more human-to-human approach?

As customer service continues to evolve, staying on top of (or rather ahead of) what customers want most when it comes to their experience is extremely important. Meeting and exceeding the needs of your customers will often land you in a strong position to charge more for your services. How so? Because consumers are even willing to pay a premium to ensure they receive the kind of high-quality, no hassle customer service they expect. In his Forbes article, Hyken notes that customers will “reward the companies they enjoy doing business with by coming back – and paying more.”

And the Glady survey results back that claim, indicating that 68 percent of survey responders would pay more to the company that provides great service. The majority of the surveyors (27 percent) would pay 10 to 20 percent more and eight percent would even be “willing to pay over 20% more if the service was great.” Another study performed by McKinsey & Company reported that 67 percent of customers say they’d definitely be willing to pay more for a great customer experience.

So, ask yourself this: What would it cost you in time, money and resources to better ensure that your inspection company could provide exceptional customer service at every interaction and impression point your customer has with your business? Are you doing it already? Is it completely effective or do you need to make some improvements and tweaks? Whatever the case, once you’re truly dialed in, not only would you be able to charge more, but you’d immediately set yourself apart from the competition who believes they are already providing exceptional customer service – when in fact, they quite often are not. And that “not,” can come at a high price.

One of the biggest issues saddled with not providing superior customer service in today’s world of online reviews and social media, is that word spreads like wildfire…

According to the American Express 2017 Customer Service Barometer, “Americans tell an average of 15 people about a poor experience, versus the 11 people they’ll tell about a good experience.” That same study also reported a whopping 33 percent of Americans will consider switching companies after just one single instance of poor service. More alarming yet, Newsvoicemedia.com reports that “U.S companies lose more than $62 billion annually due to poor customer service.” A lot of inspectors today can’t afford to take the risk to lose even one customer due to poor service – let alone experience a wave of new or repeat customer losses as a result of crushingly negative online reviews.

Whether it’s the home inspection industry or not, companies that interact with customers in any capacity should consider themselves in the business of people — of making them happy and retaining them. This in itself can make a vast difference in a business’s bottom line. Bain & Company reports that “increasing customer retention by five percent increases profits anywhere from 25 to 95 percent.” There’s likely not a company out there that couldn’t benefit from increased percentages like that by refocusing their efforts on providing excellent customer service.

Now, back to that question of how much time, money and resources should you invest to ensure you are providing an unparalleled and consistent customer service experience with every customer interaction. The benefits of providing awesome customer service are clear, but the time, money and resources required to make it happen are probably still a bit muddy. The answer is: It depends.

There are many shapes and sizes of home inspection companies and no one inspection business owner operates completely the same. Further, depending on what business lifecycle phase (the progression of a business in phases over time) your inspection company is in, will dictate what kind of approach to take and/or changes you should consider making on the customer service front. In addition to that, you must really examine the severity of the issues that may or may not be hampering your ability to provide beginning-to-end exceptional customer service. Once you’ve done that, you’ll have a far better idea of just how much time, money and resources will be required to make critical alterations and course corrections.

Now more than ever, home inspectors need to be providing a level of customer service that is truly exceptional. Your customers demand it, are willing to pay more for it, and they’ll tell others all about it. In today’s highly competitive, highly automated world, good old-fashioned customer service is king. And to achieve long-term, sustained success…you must do what’s required to earn the crown.

5 Proven Customer Service Tactics to Level Up Your Home Inspection Business
10 Aug

5 Proven Customer Service Tactics to Level Up Your Home Inspection Business

Providing excellent customer service has become one of the most highly effective ways to increase business. Consumers have time and again recognized the value of this component — and are willing to pay a premium for the kind of customer service they have come to expect, and nothing less. While it may sound like a daunting task, providing unparalleled customer service can be easier than you think. Here are five customer service tactics to help you take your business to the next level.
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