Streamlining Your Business

Customer acquisition. It’s a phrase that most of us had never even heard of, much less thought of, before we became business owners. Now, whether we call it that or not, it’s something that we can’t get out of our mind. Trying to figure out how to get more people to hire us ranks right up there with food and shelter on our hierarchy of needs. Customers mean income, and income means that we get to keep doing what we love: inspecting peoples’ houses. Without customers, we’re right back to that dreaded 9 to 5, the stupid job we worked so hard to get away from when we became a home inspector.

home inspection client about to pay for their inspection

In an excellent article from Shopify.com (which every business owner should read), customer acquisition is defined as “the process of finding and persuading prospective customers to buy from your business…” The Shopify article explains eight different customer acquisition strategies available to the business owner to grow their customer base.

  • Paid advertising
  • Influencer sponsorships
  • Email
  • Referral programs
  • Traditional advertising
  • Search engine optimization
  • Audience building
  • Content marketing

The article outlines each of these approaches, explains their advantages and pitfalls, and elaborates on which strategy works best for each different type of business.

In the inspection industry, each of these tactics (in some form) can be successfully utilized to grow a business. The strategy that works best for an individual business is affected by many different things, including where the company operates, how long it’s been in business, the predominant marketing strategy utilized by its competitors, the skill and abilities of the business owner, the available marketing budget, and the intended target market. Most businesses will take advantage of these various options, mixing and matching a few of the different strategies to tailor an approach that best fits their marketing needs.

But, when push comes to shove, most inspectors rely on referrals to grow their business. Whether it’s a recommendation from a real estate agent, a previous client, or some other influential person, referrals are the lifeblood of most inspection businesses. If we ever hope to build a profitable, sustainable, and long-term business, then we’re (at least partially) dependent on referrals from other people to acquire new customers.

Many successful inspectors are able to generate business on their own, through advertising, SEO, and outreach programs, and these methods can be quite successful in the hands of a skilled marketer. But the reality is that most of us got into the inspection business because we hated our previous jobs, not because we were marketing geniuses longing to tackle a new industry.

So that means we’re going to be dependent upon our local real estate agents giving us their stamp of approval.

While there are certainly going to be inspectors that will argue against the previous statement, and not every marketing strategy holds up in every market, the fact remains that most successful home inspectors get most of their business from real estate agent referrals.

When we’re starting out, most of us spend a considerable amount of time trying to increase the pool of agents who are willing to recommend our services to their clients. We hit all the local real estate offices, wining and dining agents and brokers in an attempt to garner their attention and convince them that we’re the inspector for them. We market to everyone, in the hope that anyone will use us.

Eventually, most of us will be successful. We’ll be able to get some agents to recommend us to their home-buying clients. And, if we’re halfway decent at our job, and don’t scare the crap out of every new homebuyer we encounter, the number of agents that recommend us will start to climb and we’ll be able to build a successful business.

Slowly, things start to click for us and we start to get better at our craft. We become a more effective inspector. We increase our knowledge and abilities, and we’re better able to explain the significance of our findings. We develop our craft and become more adept at marketing our business. Basically, we finally figure out what the hell it is we’re supposed to be doing!

And that’s when something funny starts to happen.

All those years we spent trying to gather more and more agents into the fold suddenly disappear, and we start to notice that a greater percentage of our inspection jobs are coming from a smaller number of agents. Fewer and fewer agents are responsible for a greater amount of our income.

And we’re left to wonder what the hell is going on!

Investopedia.com states that in the field of economics, “the… theory of diminishing… returns… predicts that after some optimal level of capacity is reached, adding an additional factor of production will actually result in smaller increases in output.” Simply put, once we reach our stride, the more effort we put into getting better, the less benefit we get from all that extra work.

In the same vein, I’ve come up with the theory of diminishing referrals. This theory predicts that as we become more adept at our job, we begin to develop deeper business relationships with agents who’s moral and ethical views more closely align with our own. As a result, those agents are responsible to more of our business (more referrals), while the agents whose views don’t line up with ours move on to inspectors who better fit their needs (diminishing referrals).

It’s a fact of life that there’s a wide variation in peoples’ moral and ethical views. Some people would never consider doing anything that could be perceived as being even remotely wrong, while others have no problem doing everything in their power, even if it’s illegal, immoral, or unethical, to make a buck. And we typically feel most comfortable working with individuals whose moral compass best lines up with our own.

As a result, the agents who are uncomfortable with the way we conduct business, whether that’s because they’re more principled than we are or less, tend to move on to other inspectors who share their moral outlook. Sometimes the agent is the one who makes this move, while other times we’re the one who initiates the change. Regardless of how it happens, there’s a natural migration that occurs whereby agents and inspectors with similar mores tend to end up working together (the theory of diminishing referrals).

We tend to instinctively weed out from our business life (and our regular life) those people who cause us to expend more energy than we gain benefit from the relationship.

Face it, we’ve all had to deal with someone in our business who simply does not hold up their end of the bargain. It could be that they’re always late for every inspection they schedule. Perhaps they’re always asking you to go above and beyond your normal job description to compensate for their lack of follow-through, showing no remorse at all for making you do extra work to cover their butt. Or maybe they end up cancelling every other inspection they schedule simply because they didn’t practice due diligence.

When we’re new to the inspection game, putting up with this type of behavior is a necessary evil: we’re got to scratch and claw for any inspection clients that come our way. We need all the revenue that we can get, so we’re willing to put up with bad actors if it means that, eventually, we’ll be getting some money into our bank account. Once we’re more successful, and not dependent on that next inspection check to keep us out of foreclosure, we can afford to be more particular with the people we choose to work with. We can afford to let the more difficult-to-work-with agents move onto some other unsuspecting home inspection company.

So, the question then becomes, how long should we wait before we start streamlining our client base. Unfortunately, there’s no easy answer to that question. Like everything else in life, there’s no right or wrong answer. There are many different variables that must be considered when making such an important business decision, and these factors are unique for each business owner.

There are many different questions that we should ask ourselves before making this important decision. Taking time to assess the current state of our business and examine where it is that we’d like to be in the future, can help us make a more informed decision regarding our customer base.

Like most important business decisions, the principal metric that must be considered first is our financial health. Are we just starting out in business and struggling to keep the lights on and the bills paid, or are we 12 years in, with consistent, self-sustaining month to month revenue? Which end of the revenue timeline we’re currently occupying will dictate how willing we are to put up with the stress of working with less than desirable clients.

In my own business, there are many agents that I worked with earlier in my career that now reside on my “do not inspect for” list. When I was trying to get my business off the ground, any revenue was good revenue. Now that I’ve got an established brand, and my income is relatively stable, I find working with difficult agents less and less appealing. I prefer to work with agents and buyers whose outlook and values line up with mine.

saying goodbye to difficult home inspection clients

Making the choice to streamline our business can be a difficult decision. Concentrating our efforts on an increasingly smaller number of referral sources can seem counterintuitive to most business owners and doing so is not without its own list of potential challenges. But, in the end, some people are just easier to work with than others, and we all deserve to right to enjoy our jobs.

In this season of renewal and change, we’ve got to remember that making the tough choice to remove difficult people from our lives is never easy. But, in the end, we’ve got to do what’s best for us, for our businesses, and for our own mental health.

And isn’t that reason enough to change?

I welcome all feedback (both positive and negative) on this post.
Please take a moment to leave a comment below. Thank you!

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Thanks, Joe

pic of me, Joseph Cook Jr, home inspector

Comments 4

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      Hey Kristina,

      Thanks for the comment. I agree wholeheartedly! Get an inspection!

      Joe

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