Growing Your Home Inspection Business through Risk Reversal – Part Two
In part one, we discussed the importance of providing quality service to your clients by being a competent home inspector, and how starting with home inspector training can help you do just that. In this post, we explore what happens if a client is dissatisfied, as well as how risk reversal can benefit your closing ratio.
What if some clients don’t pay or ask for their money back? That may happen. Before we look at the numbers, let’s set the stage. If you are just starting out, many of your calls will be from shoppers. A mature home inspection business will get inspections from its referral base, but there will always be shoppers. Getting more inspections is important to most home inspection companies unless they are operating at capacity.
Number of Sales Calls and Closing Ratio
Do you know how many sales calls you get in a week or month? Do you track your closing ratio? How many people shopping for a home inspection firm end up choosing you now? Don’t include the referral people who are simply calling to place an order—they have already selected you. Just count those who call trying to decide on an inspection firm and end up booking with you.
If you know how many sales calls you get and your closing ratio, you can measure the improvement you get with risk reversal. If not, you can take our word for it that you will do better! The goal of risk reversal is to improve your closing ratio. Let’s get to the numbers.
If consumers typically call 3 home inspection companies including your firm, you might expect to get the inspection about one third of the time. If you offer shoppers the risk reversal solution, you will win more, perhaps one half of the time. By the way, if you don’t get the business, you have lost nothing. You won’t win every prospect, but we are very confident that your closing ratio will improve. Even a modest improvement will improve your bottom line. Let’s see how it works.
If you get any more inspections by offering risk reversal you are ahead of the game. Every additional client is an additional inspection fee. If one in 50 of the additional clients (a conservative number based on our experience) pays less than your full fee or wants their money back later, this sales tool has cost you 1 in 50 or 2% of gross sales. To put it another way, you got 49 more paid inspections and you did one for free. If your inspection fee is $400, you got $19,600 (50 x $400, less $400) more business and it cost you $400. Would you spend $400 to earn $19,600? We would. Remember, offering risk reversal up front on the phone is free, other than the 30 seconds it takes to explain.
Most would agree that’s a pretty effective sales return. Whether it takes you a month, a year, or 2 years to get the 50 additional inspections depends on how often your phone rings. But irrespective of time, the numbers work.
Give it a try. What have you got to lose?