Growing Your Home Inspection Business through Risk Reversal – Part One
When consumers look to buy a product or service, they are taking a risk. The product may not be any good; the service may not deliver as promised. Most of us have been disappointed with something we have bought. Risk management is an issue for all consumers.
We Are in the Risk Management Business
It’s interesting that home inspectors are in the risk management business in one sense. We help people understand the physical condition of the home they’re buying so they can make an informed decision. We don’t guarantee that there’s nothing wrong with the home, but we do substantially reduce the risk. As a home inspector, high-quality home inspector training is the first step to being informed and performing well as an inspector to provide better service to your clients.
Let’s look at risk management another way. When people are trying to choose a home inspector, they have the same problem. It’s difficult to evaluate the service they’re going to get before the fact, and therefore who to choose. Many home inspection companies make compelling claims about their knowledge, competence and value. When clients call a number of home inspectors, they rarely know the right questions to ask, and often default to price in making their decision because that’s the only variable they can measure easily. When you can’t differentiate, you assume they’re all the same. We think you’ll agree that not all home inspectors are created equal.
Risk Reversal – A Powerful Sales Tool
We are assuming here that your phone rings. If it doesn’t, that’s a marketing issue rather than a sales issue, and a topic for different discussion. When clients call your home inspection firm shopping for inspections, you might be able to win with the lowest price; but everyone can play that game, and there are no winners. Even then, a convincing sales pitch from one of the least qualified inspectors may win the business. Let’s look at a different strategy. Clients don’t know whether you are any better or worse than any other firm they call.
What if you could remove the risk for the client? You can, and it’s not difficult. Explain to the client that you understand it’s very hard to compare various home inspection companies. Tell them that you are so confident in your services that you are willing to take on the risk, so they don’t have to. Tell them your fee, and then tell them that if at the end of the inspection they don’t feel they got great value, they can pay you whatever they think is fair—including nothing at all.
You might go a step further and say that if in the future they are ever unhappy with the value they have received, you will return their fee, no questions asked. Some folks take this to a different level, offering to a satisfaction guarantee that includes returning 2 or 3 times the inspection fee if the client is dissatisfied.
It’s called risk reversal for a reason. You are taking on the risk. Of course it’s scary. You should be scared if you’re going to do a poor inspection. On the other hand, if you do great work and provide great value, as most competent home inspectors do, your clients will generally be more than satisfied. We find we consistently exceed the expectations of our clients, although sometimes we need to make sure they understand the scope of work.
This makes it easy for the client to choose your firm for a couple of reasons. Firstly, they are now not risking their inspection fee in the event they are disappointed with the service. Secondly, and far more importantly, they will sense that you are very confident in your ability to provide a great service for them. Getting a good home inspection is far more valuable to them than getting their money back if the inspection isn’t good.
In Part Two of this post, we’ll talk about what happens if a client isn’t satisfied, as well as how risk reversal will benefit your closing ratio. See you at Part Two!