How can I Compete with that?!

[rgardner]

Recently began marketing in a town 30 miles from home, as I have just begun my HI business here in Southeast Colorado. While speaking to a realtor, she said I have stiff competition. When she asked my praice, I told her $285.00 She then showed me a post card of a NACHI inspector doing homes for $199.00 As well, he is offering a $20.00 discount off of that! WHAT"S UP WITH THAT???
I thought we are supposed to add credibility to the industry. Am I out of line here? I was so without words to respond, not wanting to speak ill of another colleague. Any wisdom?

[mporras]

Originally Posted by rgardner

Recently began marketing in a town 30 miles from home, as I have just begun my HI business here in Southeast Colorado. While speaking to a realtor, she said I have stiff competition. When she asked my praice, I told her $285.00 She then showed me a post card of a NACHI inspector doing homes for $199.00 As well, he is offering a $20.00 discount off of that! WHAT"S UP WITH THAT???
I thought we are supposed to add credibility to the industry. Am I out of line here? I was so without words to respond, not wanting to speak ill of another colleague. Any wisdom?

Ron,

Market yourself as the "NOT cheap" inspector, and forget the Realtor. As an example (with credit to Russel Ray, and Nick Gromicko for the ideas) take a look at this page: http://www.ehinspections.com/gpage.html1.html of my website.

Market yourself as the best, most thorough, most (fill in the blank) etc., but don't market yourself as the cheapest inspector. Then deliver...

Hope this helps....

[jmichalski]

Ron,

What is the average rate for the area? Is it a full i nspection or a limited (or walk/basic) inspection? And did the postcard include that famous small print disclaimer "starting at"?

Dig a little deeper. It may be that the guy is a low baller - there are plenty of them all over, even here. There is nothing wrong with being at teh bottom end of the pricing spectrum when starting, but being at teh bottom end by a wide margin is the definition of low baller.

[rgardner]

Thanks Mike for the wisdom, sits well with me. Enjoyed the website. I guess I was caught off gaurd considering he is a NACHI inspector. Like the old addage,, "If you can't say anything nice..." Anyway I believe I offer a, quality inspection at a fair price. I hope that other inspector is representing "Team NACHI" with integrity.

[rgardner]

ALl I know is that she said her clients are really satisfied with his inspection.

[rgardner]

Joseph,

My price is right in line with the area $250.00-$300.00 for a full inspection. As I understand it the other inspector is doing a full inspection at $199.00

[rmccullough]

Originally Posted by rgardner

Joseph,

My price is right in line with the area $250.00-$300.00 for a full inspection. As I understand it the other inspector is doing a full inspection at $199.00

Everyone sets their own price,, More expensive doesn't mean a better inspection, just as lower priced doesn't mean a poorer inspection, if they make what they want or need to live on,, who's to fault them?

[Joe Funderburk, CMI]

Originally Posted by rgardner

Joseph,

My price is right in line with the area $250.00-$300.00 for a full inspection. As I understand it the other inspector is doing a full inspection at $199.00

I tell price shoppers who call me my price and say, "I'm not the cheapest. If you're looking for the cheapest I can tell you who to call. But also compare qualifications and quailty. If you want a $200 home inspection you can get one and you'll get what you pay for. Those folks do 3 or more a day and they do them quick. Now let me tell you about me..."

[Joseph Burkeson, CMI]

Originally Posted by rgardner

Joseph,

My price is right in line with the area $250.00-$300.00 for a full inspection. As I understand it the other inspector is doing a full inspection at $199.00

10 a week ain't a bad living.

[Nick Gromicko]

http://www.nachi.org/convert.htm

[rhumphries]

Here's something that may help.

The COMPARISON CLOSE (or VALUE CLOSE)

Use MS-Word or some other word processing program. Create a two-column table. On the left side, list everything you will do for your customers now PLUS you will also want to list your inspection education (mold, radon, pest, etc.), inspection-relevant background (such as having been a builder, electrician, engineers, etc. at one point), and other ancillary offers you provide (such as newsletters, free books, check-up house calls, etc.). List one "value point" per line. All of this will lend credibility to your value. Leave the right side fields blank as this is what your prospect will use to compare your competitor to you.

When your prospect tells you that a competing inspector charges "less" for the "same thing", send your prospect a copy of this form. If you send the form via email, then you can expect that the prospect (Realtor or homeowner) will not likely "question" the other inspector. In other words, the vast majority of your prospects will simply not take the time to call the other inspector and question him or her on a point-by-point basis. BUT, you will win serious credibility points for itemizing every 'feature and benefit' you offer.

(If you are face-to-face with your prospect, use the form as part of your meeting.)


The key to making this all work is to list the "little things" that make a big difference on your form, i.e., your real values and perceived values. You may have to add some thing to this form that you do not currently offer to "fatten it up". In other words, if you don't send out newsletters now, then start doing it -add to form. If you don't provide your customers with a freebie (tool kit - $20+; house plant - $10+; home-improvement book - $15+; home design software - $20+), then start doing it - add to form. If you don't provide bi-monthly check-up calls, then start doing it - add to form. If you haven't partnered with a local handyman or landscaper to provide just your clients with discounts, then start doing it (in exchange for marketing them, they provide your customers with discounts) - add to form. If you don't offer $25 gift cards to Home Depot or Lowe's, then start doing it - add to form. Think of more things you can do that don't cost you a lot of money (if any). LIST ALL OF THESE ON YOUR SIDE OF THE FORM.

______

SIDEBAR: Remember that any 'features and benefits' you provide today that cost you money can be recouped if your newletter (or sales people) consistently promote warranty or maintenance inspections that you can do around one year after the initial inspection. The key here is to do whatever you can build a "first-name" relationship with your customers. Show you truly care by communicating with them on a semi-frequent, yet moderated and consistent basis.
______


Finally, the last part after you have either emailed your list to your client, or gone through it on a point-by-point basis with them while face-to-face, ask them by phone or face-to-face if they understand where your value exceeds your competitor's value.

And though most prospects will immediately understand your value based on what's listed on your form, you need to prepare for those who will ask you to reduce your price anyway. The BEST part about this is that they will tell you that they don't NEED a "tool kit" (you save $$), or they don't NEED home design software (you save $$), or they don't NEED a house plant (you save $$). Here's what I mean:

Mark-up strategy - From a pure project management and estimating standpoint, you should increase your price 50-cents to $1 for ever $1 you spend on ancillaries. In other words, if you spent $20 on a home-improvement gift for new customers, your inspection price should go up $10 to $20 over the price of the book (those of you who sub-contract know this). So, if you want to net $250 for your inspection, then include the book and charge $280 ($10 + $20 cost of book) to $290 ($20 + $20 cost of book). So, if your prospect decides they don't want the book, you don't LOOSE money, and they feel they've "won". You actually MAKE money NO MATTER WHAT, and the prospect feels as though you are doing them a favor.

You ARE NOT cheating your customers. This system works like a wholesale mark-up. If you can buy your ancillaries at a wholesale price to begin with, then that's even better.

Even if an ancillary doesn't cost you money, put a price on it anyway - any price.



This 'closing technique' is not as complicated as it seems (typing it out here makes it seem more complicated than it really is). Understand the human psychi - that consumers don't like to go head-to-head to challenge anyone by nature because it is uncomfortable. In most cases, they would rather concede than to (a) call you a liar, or (b) call your competitor a liar. By using this technique, you take away the "price versus value" argument. By using the "mark-up" strategy you position both you and your prospects to win by providing THEM with a middle ground on which to meet you.

But, as was stated earlier, ten a week at $199 is a great living....so is ten a week at $250. The choice is yours.

Hope this helped.

-R-

___


One more thing...

The REFERRAL-LETTER CLOSE

There is always going to be the arguement of price versus value. Keep in mind that people will pay more for (a) brand names they recognize, and (b) products or services that are heavily endorsed by others people with credibility. If you want the short and sweet way to justify higher prices, simply show your prospects praises and referral letters written by satisfied customers. When I say "referral letter", I mean a letter on letterhead that literally endorses you to the next prospect - a "To Whom It May Concern" letter. As a stock broker, I used used to keep these types of letters in a portfolio.

Your referral letters should not quote your rates on them because you are trying to impress upon your prospects that you have great value regardless of (or in spite of) your price-point. This allow allows you to provide low-cost inspections up front to get more referrals letters.

Believing strictly in the "if I charge more, then I appear to be of greater value" arguement will kill your business UNLESS you have a reason to charge more. What I mean is - if you show that you are in high demand, then you can certainly justify charging more. Having ten or more referral letters on top (that are not more than two or three months old) can help you achieve this.

[wforsyth]

I quoted my price for a 3000 sq ft home at $625 to a gentleman selling his home down the street. He told me that my price was too low at that and listed off my business expenses he expected I would have.
He has been in business for 50 years at least and I have to say, if I had quoted my price at even what my local competitors are, around $350 or so, he wouldn't EVER have taken me seriously. He agreed with me that my price shows that I value myself and my services and will attract an exclusive clientele that will build my business through referrals in a desirable community, reducing the time/money spent in advertising eventually and being able to rely on referrals almost exclusively.
Being able to price myself in a higher bracket will allow me to do something I learned from Stephen S. here in WA. State and that is to only do one inspection a day. I tell my clients that I am their's exclusively for the day, there is no rush on the inspection, they are welcome to spend the day with me and I will be completely at their disposal. I also explain that I don't do onsite reports, all reports are written from scratch and are complete with digital photos of the entire home.
He's going to be encouraging his lawyer to use me as well as friend's across the state and into Alaska even who have investments.

[Stephen W. Stanczyk]

Careful with the Alaska inspections. Home Inspectors are licensed there. I had a guy in class from Alaska and he said there was some pretty weird licensing stuff up there. He brought up a couple really strange items but I don't remember what they were. I just remember everyone in class including the instructor was shaking their head.

[wforsyth]

Oh, I think that he just knows people in Alaska who have investments in Wa State. Not sure, but thanks for the warning.

[Roy D. Cooke, Sr]

Originally Posted by wforsyth

I quoted my price for a 3000 sq ft home at $625 to a gentleman selling his home down the street. He told me that my price was too low at that and listed off my business expenses he expected I would have.
He has been in business for 50 years at least and I have to say, if I had quoted my price at even what my local competitors are, around $350 or so, he wouldn't EVER have taken me seriously. He agreed with me that my price shows that I value myself and my services and will attract an exclusive clientele that will build my business through referrals in a desirable community, reducing the time/money spent in advertising eventually and being able to rely on referrals almost exclusively.
Being able to price myself in a higher bracket will allow me to do something I learned from Stephen S. here in WA. State and that is to only do one inspection a day. I tell my clients that I am their's exclusively for the day, there is no rush on the inspection, they are welcome to spend the day with me and I will be completely at their disposal. I also explain that I don't do onsite reports, all reports are written from scratch and are complete with digital photos of the entire home.
He's going to be encouraging his lawyer to use me as well as friend's across the state and into Alaska even who have investments.

Good for you Wendy we have been the Highest in our are from the get go . Yes some times we do more then One in a day but we are a team of two and I am not working alone it does make a difference .
Then we have the $200:00 inspector who is out under two hours .
I guess they are just more efficient then us we take about three hours +or- with writing the report on site
.

Roy Cooke