I got CHEWED OUT ! Here is why.

By
Home Inspector with Pioneer Property Inspectors LLC
I got chewed from one of my competitors for doing a inspection on a Sat. He lost the booking to me. Well I see it as customer service. He also chewed me out for  offering FREE RADON with every inspection saying I was killing the prices in our market. WRONG, is the way I see it.. I see as giving people a better bang for their buck. I can not see charging $100-150 for something that only runs $20 to buy.. Heck I throw it in and use it for a marketing tool. AM I wrong? I do not think so..

Comments (33)

Gene Allen
Fathom Realty - Cary, NC
Realty Consultant for Cary Real Estate
Its just value added service.  Its like credit checks.  A lot of real estate services charge $40 or more to run a rental application.  Most of the cost they attribute to the credit report that costs less then $2 bucks to produce. 
Nov 13, 2007 07:11 AM
Rod Finch
Pioneer Property Inspectors LLC - La Crosse, WI

My radon tests are done in according to regulations. I WOULD NEVER use a sub-standard product, or do anything to jeopardize my business or anyone's safety or any law. Not to sound like I am chewing anyone out but if you were to do the research you would and could find cheaper canisters out there. OR use the computer. And as far as Have I been trained OF COURSE. I am not new the home inspection business, I know the ropes. OH! and I have found this business to VERY profitable.

Nov 13, 2007 07:49 AM
Elizabeth Nieves
The Elizabeth Nieves Realty Group - Durham, NC
Bilingual Raleigh - Durham North Carolina Real Estate Team
GREAT idea! I wish the inspectors in my area would do the same. So many people forego the radon testing because of the extra expense. Blessings!
Nov 13, 2007 08:53 AM
Danny Thornton
R & D Art - Knoxville, TN
WordPress Guru
Rod, first I would tell the other guy that maybe he should be available when the customer is. Last time I check the customer service manual, it idid not say anything about a 9-5 monday through Friday work week.
Nov 16, 2007 03:01 AM
Gary J. Rocks
Juba Team Realty - Jefferson Township, NJ

Rod

Good job, always offer something he other guys dont. You have to feed your family not their.

Nov 16, 2007 03:48 AM
Atlanta's Home Inspector, David Lelak IHI Home Inspections
IHI Home Inspections 404-788-2581 - Canton, GA
Experience the IHI Difference

Rod,

Sometimes you have to do what is neccesary and that may include working on Saturday.  The one thing that I have always been taught is "You have to satisfy your clients."  If you don't have clients, you're out of business.  I work Saturdays to, when needed, it's just plain "good customer service"

 

Nov 16, 2007 04:09 AM
Rod Finch
Pioneer Property Inspectors LLC - La Crosse, WI
thanks for the support.
Nov 16, 2007 06:58 AM
Darleen McCullen
Raleigh, NC
Broker - Raleigh, NC Real Estate
Rod, I don't see anything wrong with you offering something free to your clients. It's your business - and you have the right to run it the way that you wish, as long as you're within legal and ethical guidelines. Don't listen to your competition!
Nov 16, 2007 12:29 PM
Esko Kiuru
Bethesda, MD

Rod,

As far as I know, you can set your prices wherever you like. And you are allowed to market your services with any incentives you prefer. Someone is just sore because you signed up a customer from under his nose.

Nov 16, 2007 12:35 PM
Steve Spinelli
Titanium Laboratories, Inc. - Nutley, NJ

Rod,

I work on Saturdays, too.  A lot of people work during the week and taking an appointment on a Saturday accommodates your customers' needs.  If your competitor doesn't want to schedule an inspection on a Saturday, well, that's his loss!  Sometimes Saturdays are our most profitable days ;)

 

Nov 16, 2007 04:27 PM
Chris Griffith
Downing-Frye Realty, Bonita Springs, FL - Bonita Springs, FL
Bonita Springs Listing Specialist - Agent
I would imagine if the market is slow (which i do not know about your area) the inspections could slow and you have to use whatever tools you need to get business.  In our area inspectors are also offering a follow up inspection prior to closing.  We have a lot of absentee owners that aren't in town.
Nov 20, 2007 09:39 PM
Rod Finch
Pioneer Property Inspectors LLC - La Crosse, WI
Yes our market is slow. But I do this all the time not just when the market is slow. Thanks for all of the comments. keep 'em coming.
Nov 28, 2007 04:52 AM
Anonymous
Tim Howe

Rod,

Of course, you absolutely should run your business the way you see fit, and it is not your competitors business to challenge you. But, since you asked:

What he should be doing is letting clients and prospective clients know what is involved in buying, placing and retrieving radon monitoring equipment. Explaining that this testing is a real expense (if done properly) in terms of time, equipment, mileage, administration, etc., has real value, and that as a person in business to make a profit he charges accordingly. If I were your competitor, I would love the opportunity to get the word out that that I had competitors who did not value their services. You see, people perceive a certain relationship between price and value. If a product or service is cheap (or better yet, free), most intelligent people perceive that the cheap or free service has little or no value. Smart people don't give valuable things away. They just don't. Smart people aren't fooled by gimmicks. If a prospective client has made a few calls and gets quotes of $100-$200.00 for radon testing, and then you tell them that it is free, what is he to surmise? Speaking for myself, I would surmise that;

A. You are desperate for business. RED FLAG

B. You are cutting corners on the test. RED FLAG

C. That you do not value the service you are offering. RED FLAG

E. You are using substandard equipment. RED FLAG

F. That you do not value the service that you are offering (I know, but it's redundant for emphasis).

(It may well be that none of the things I would surmise are accurate, but all I have to go by is a business card and a voice on the phone).

My philosophy on pricing (whether I am selling or buying) is that people who are good at what they do charge more than people who are not so good at what they do. They do not offer discounts and price breaks (we are not retailers. and we can't apply economies of scale and other discounting factors that retailers can).

People who are good charge more because they can.

People who are VERY good at what they do, charge more than all of their competitors. They charge for ancillary services because they know what their costs are. Smart consumers know this and willingly, even happily (PERCEIVED VALUE) pay.  Smart consumers are well educated, well employed, and they buy big houses. Why in the world would any HI not go after the smart consumer?

Entering my 5th year in this business, the thing that surprised me most at the start and still amazes me today is how HI's undervalue their services. I noticed a few Realtors comment positively on your idea to give your time and money away. That is interesting because I have met hundreds of Realtors, and I have never met a single (successful) one who slashes their commission to drum up more business. They don't do this because they have mentors (Brokers) who tell them that it is a losing proposition (the Broker dang sure ain't slashing HIS/HER commission).

You build up business by getting more (client) referrals. You get more client referrals by providing superior service. When you provide superior service and charge for it, upscale clients (you will weed out the price shoppers, thankfully), will flock to you. They will call you because of, not in spite of, your high prices.

As for the Saturday thing, if you snooze, you lose, tough for him; but if I were in your market, I would welcome another opportunity to illustrate to my clients the difference between a top shelf, high dollar inspection, and a discounted inspection. Not a right or wrong situation, just different approaches.

 

Tim

 

 

 

 

Nov 28, 2007 06:44 AM
#26
James Quarello
JRV Home Inspection Services, LLC - Wallingford, CT
Connecticut Home Inspector

Tim,

Nice to hear from you, haven't seen you around the rain for awhile. An excellent response. I wish I said it. But you are absolutely correct. I charge a premium price for my radon testing because I provide a premium service. Same goes for my inspections.

I have begun to not concern my self with the price shoppers. They are not worth my time. In my seven years in business I have gradually raised my prices along with my skills. I have made more money per inspection every year I have been in business. So when its slow my bottom line isn't as affected. I also have diversified and have income from other inspection related businesses.

One of these is radon testing and mitigation system inspections. Because I use professional equipment, CRMs, and have the training, people seek me out for this service. I bet that doesn't happen to inspectors who include testing in their standard inspection fee.

Like you said many inspectors grossly under value their worth. Your time, expertise, and knowledge are a commodity that should not be given away cheaply.

Nov 28, 2007 07:03 AM
Rod Finch
Pioneer Property Inspectors LLC - La Crosse, WI

Tim- you are right but, if you knew my market and how I run my biz compared to others then you would understand. Here as far as Radon testing goes most use the same tests including this HI who called me. I can not see why charge 100-200 for something as simple as radon. yes my comp ( yes I cAN DO BOTH COMP AND CANISTERS) was pricey but I have made my money back and then some. So if someone wants to ask why I tell them. But they might wonder why I charge more for an inspection. lol the things that make you HUMMMMMM>

Nov 28, 2007 07:09 AM
Anonymous
Tim Howe

I can not see why charge 100-200 for something as simple as radon.

Because you have provided a service that the market has valued at $100.00-$200.00. For the life of me, I cant see why you wouldn't charge for a valuable service (I would also disagree that radon testing is simple, but thats for another forum). I always thought that was the idea of commerce; to exchange goods and services that have value for other goods and services (and cash) that have value.

I gather that you recoup the cost (your cost), of the test by virtue of increased fees for your inspections and increased inspections due to your sales gimmick?  If I am following you correctly, you forgo the fee (lets say $150.00) as a 'hook' to get clients to call. When they call, you tell them that you provide a service that the market has valued at $150.00 (approx 1/2 of the average national home inspection fee), for free. You tell them you do this because?

  •  You need a hook?
  • The service has no value?
  • Your business is dependent on Realtor referrals, and Realtors are always looking to save their clients a buck? ;^)
  • You better manage your business and expenses than your competitors?
  • You charge a premium for an inspection that includes a radon test, thus actually charging your client for the radon inspection? (This tactic, while often used, does not fool anyone, and IMO makes it seem as though you take your client for a sap). IF, this is what you are doing, it is somewhat disingenuous

I would be willing to bet that if you maintained or increased your inspection fees, INCREASED your radon test fees to a point above those of your competitors, offered NOTHING free or discounted, and emphasized the fact that you charge more for everything because you are worth it, you would make more money doing fewer inspections. Of course, for this model to work, you really do have to provide superior service.

You are right when you say that I don't know your market. But I do know 'markets', and I have a pretty good understanding of consumer psychology. There are 'premium clients' in every market and there are price shopping low-ballers in every market. Price shoppers are not good (or profitable) clients. A marketing scheme that is aimed at that segment is doomed to fail, IMO. Someone will come along and low-ball you eventually, and then, without an affluent upmarket clientele to provide referrals,you either out low-ball the low-baller, or you go teats up (or become a RLH). In my experience, the inspectors who are respected and have strong businesses charge the most in their market. If you charge the most, you will give the impression of expertise and stability. Gravitas, in other words.

This is just an opinion on the subject of pricing in general, and not a criticism of the way you run your business. I just feel very strongly that price cutters and discounters (along with non-alarmists and fair-to-the-house-inspectors) are some of the biggest hurdles we face in establishing this thing we do as a true profession.

 

Tim

 

 

 

Nov 28, 2007 09:57 AM
#29
Anonymous
Tim Howe

Hi James,

 Haven't been here for a while. A combination of being very busy (our market has been pretty steady), and my inability to resist calling out bucketheads. This (my) lack of restraint has caused a couple of threads to degenerate to name calling and innuendo, and I needed to take the proverbial 'ten deep breaths'. This inspector makes make no promises, however, that he will not post strong opinions about inspectors who are 'non-alarmist', 'fair to the house', passive voiced,  low-balling, x-ray vision claiming ....see, Ive started already :^).

 

I have begun to not concern my self with the price shoppers. They are not worth my time. In my seven years in business I have gradually raised my prices along with my skills. I have made more money per inspection every year I have been in business. So when its slow my bottom line isn't as affected. I also have diversified and have income from other inspection related businesses.

 

Ya know whats funny? That model works. It works for everyone who is honest and competent. It takes a few years of part time work (and/or diversification) and a lot of rice and beans to get to that point, but there is always a price to pay for success. And even though this model is endorsed by experienced, successful inspectors who have nursed their businesses through the tough times of starting up and building a client base, we still encounter new guys on forums like this who think that they will shortcut the process by low-balling, discounting, promoting false expectations, etc., etc. I don't know if these ideas come from the HI schools (the discounting, low-balling, and Realtor stroking were all advocated at the the school I went to). But they are proven to be losers as business models.

Tim

 

Nov 28, 2007 10:39 AM
#30
Bonner Thomason
Keller Williams Realty - Kernersville, NC
CRS, ABR, GRI, e-Pro

You should send all the responses to the person that chewed you. This is still America and free trade.

Bonner 

Nov 28, 2007 11:07 AM
Anonymous
Anonymous

Gene,

Its just value added service.  Its like credit checks.  A lot of real estate services charge $40 or more to run a rental application.  Most of the cost they attribute to the credit report that costs less then $2 bucks to produce.

Not to put too fine a point on this, but...a radon test is not really anything like a credit check. Where is the liability in a credit check (huge liability in a radon test)? Where are the transportation costs (to retrieve the test device) in a credit check? Where is the required expertise (attained through training and experience, both of which represent real costs to the inspector) in a credit check? Where are the administrative costs (documentation, record keeping, communications) in a credit check? Where are the lost opportunity costs (you cant inspect another house, wash your truck, do your taxes etc. while you are retrieving, documenting, mailing, etc. that radon test) in a credit check? I fail to see the similarity. A properly done radon test represents actual expense to the HI.

 A value added service must not only pay for itself to make business sense, it must create revenue. As you know, this payback can take many forms. It can be in the form of increased volume resulting from consumers wanting to get the most value they can from a service (the problem here is that how does one know that volume is not increasing organically or because of external market forces, or..... It is virtually impossible to determine if the service that you are giving away is causing the phone to ring, or if the phone is ringing because you are more established. The only people I have seen that discount are relatively new and do not have adequate data to make that determination).

Perceived payback can come in the form of increased revenue due to higher 'per service' charges (I think this is Rod's approach). That is, instead of a $300.00 inspection and a $150.00 radon test, you charge $400.00 dollars for the inspection and throw in a 'free' radon test. This is cost shifting, not adding value.

Another way that some inspectors look at it is as a marketing cost. If you 'give away' a service that you could be easily charging $150.00 for, you will bring in more business, Realtors will refer you to price shoppers, your name will get out there, etc. Even if the actual difference is $50.00 (as in the cost shifting scenario), you are spending $50.00 PER INSPECTION in marketing. That is absurd in this business. The iincrease in volume would have to be enormous before any pay back was realized.

Again I find it interesting that Realtors think that giving away a valuable service (that if charged for accordingly would represent approx 30% of an average inspection fee) is a good idea. I am still waiting to meet the Realtor who discounts their commission by 30% just to 'add value'.

I am also a little dismayed by Rods assertion that radon tests are easy, virtually expense free . I cant see how this attitude furthers the interests of consumers or our profession. Inspectors who are properly trained and equipped know that radon testing is NOT easy, expense free or valueless. To denigrate and minimze the services that one offers just doesnt make sense to me, and it certainly does not paint an accurate picture to any homebuyers that are reading this blog. To me its kinda like an agent saying that all a realtor has to do is walk through a house, print out a canned contract and charge 20 large for the trouble. I dont think I will ever hear a Realtor say anything like that.

Tim

 

Nov 28, 2007 12:09 PM
#32
Robert L. Brown
www.mrbrownsellsgr.com - Grand Rapids, MI
Grand Rapids Real Estate Bellabay Realty, West Mic
Good job. Your working for your customer and from where i sit your doing a great job.
Nov 28, 2007 12:38 PM