Marketing for Home Inspection

1. Marketing for Home Inspection Speaker: William A. Price, Attorney at Law wpriceiit@yahoo.com, tel. (630)362-8840

2. Defining Your Market • Markets the Association Can Reach • Markets You Can Reach • Markets Your Referral Sources Can Reach • New Markets

3. Association Marketing • Nonprofit Mailing Rates: 25 cents first class postage vs. 39 cents • Joint Marketing is deductible to each contributing member, as dues or as a marketing fee • Costs can be spread across many companies

4. Other Association’s Marketing Lawyer referral: • 800 number and website, county bar associations and Illinois State Bar Association • Basic signup fee, plus a small referral fee for the first hour of service collected

5. Other Association’s Marketing Realtors: • Realtor’s Associations Websites: direct referral to product (homes) • Assocation advertising for profession’s image • Contracts designed to recover fees • Membership fees cover costs

6. Customer Group Marketing AARP: • Provider signup for mention on AARP website ($600/lawyer) • Other “partnering” by transaction (VISA card percentage to AARP, etc…) • Monthly magazine advertising • Provider/advertising fees and membership dues cover costs

7. Newspaper Advertising Group may cover costs individuals can’t pay: 20 marketing exposures needed • Chicago Tribune, $1500/insertion • Daily Herald, Central DuPage, $400/insertion • Paddock Press, $3-500/insertion • “Homes For Sale/Farms For Sale”

8. Cable TV Advertising • Regional and Sub-Regional Coverage Available: Infomercials! • Cost/Insertion similar to Tribune • Community Cable studios/COD students and other college production facilities • 800 number for immediate response/measurement

9. Websites • Mention the site in all advertising • Use “pay-per-click” to increase traffic: $7,000 at 10 cents/click = 70,000 visitors for your keyword. Use Yahoo/Overture keyword rankings to pick words. • Have downloadable content, free and paid • Cross-link to increase site rankings

10. Expensive venues Generic referrals Extended production efforts (infomercials, brochures) Referral websites and phone services Guerilla Marketing Individual Referral Relationships Past Customer Marketing Contractor and other Business Partnering Association vs. Individual

11. Guerilla Marketing • Uses Very Little Money • Goes Around Points Of Resistance • Makes The Population Your Friend and Hiding Place

12. Guerilla Tactics • No-postage distribution: Neighborhood leafleting, “welcome wagon” distribution for post-purchase re-inspection and repair, community website mentions and referrals, public library flyers for educational events, homeowner’s association distribution (email, flyer, and direct mail – offer a group discount!)

13. Referral Relationships • Realtor Economics: Volume, not quality • Anti-kickback rules mean no direct payment for referrals • Realtor/Lawyer/Accountant/Other Trusted Intermediary (?Insurance Agents?) referrals possible • Rule of Reciprocity: how can you help them? Why are you the best source?

14. Past Customers • Cheapest cost of customer acquisition (10x less than new customer) • Reminders at least quarterly • Possibilities: Newsletter, e-newsletter (cheapest), discount coupons (transferable), non-sale services (energy audits, annual maintenance checklist/audits, rehab estimates…)

15. Partnering • Reliable vendors are always at a premium • Note general contractor services/pricing: 10% of project costs, need insurance, licensing? • Logical add-on to inspections • Possibilities: plumbers, drywall, electrical, HV/AC, insurance, etc…

16. Know Your Value Chain SERVING SELLERS: • Realtor creates customer • Mortgage bank qualifies customer • Lawyers collect the funds

17. Know Your Value Chain SERVING BUYERS: • Realtor creates customer • Inspectors qualify properties • Lawyers verify ownership and funding details, are gatekeepers for funds • Insurance, utilities, subcontractors, cleaners, etc… may be needed by new homeowner • You could create the customer for them

18. The Idea: What do you sell? What else could you sell? The Market: Who do you sell to, and who else sells the same, or alternative services? Is this market growing, or shrinking? The Team: Why are you/is this team the best/cheapest/fast-est in the market? The Plan: How do you acquire customers and deliver products and services? Business Planning Issues

19. The Idea • What Do You Sell? Peace of Mind: financial and personal safety. Not drills, holes…. • What Else Could You Sell? Financial products (insurance), safety products (build-out, CO monitors, Radon monitors, baby monitors, etc…)

20. The Market • Pick An Addressable Niche • This means one you can afford to communicate with 20 times this year

21. Market Size • How many of your services/products are bought each year in your market? • What percent of these are you capturing? • What can you/your association do to increase the size of the market? • Is the market growing, or shrinking? • What other related markets are there?

22. Related Markets • Annual inspections: could insurance companies or mortgage lenders require inspections? • Would apartment owners or absentee landlords buy your inspection/contractor referral and supervision services? • Can you sell related products?

23. Market Competition Who are your competitors? • Busy realtors, who refer at lowest cost to get the job finished. • Apathetic customers, who don’t know what an inspection is worth • Ignorant lawyers, who don’t bring you in immediately • Other inspectors

24. The Team • Identify All Business Functions Needed • Find Out Which You Don’t/Can’t Do • Hire/Retain People To Do Those Jobs • Remember the nondelegable functions: sales, team member recruitment, financial and personal responsibility for results and process • Is your team the best in the world?

25. The Plan • 90 day plans are reasonable • #1 cause of business failure: running out of money! • 80% of money/time: acquiring customers • 20% of money/time: service, billing, and followup on contracted work

26. What Are Your Milestones? • 12 referral sources, who each can give me 12 customers this year • 24 guerilla, association, and other marketing contacts to my market this year • 36+ hours/week marketing, 12 inspecting

27. Rate Setting When The basic service has become a commodity • Two-sided markets: a free service to bring people others need in, and a charge to others who need to reach them. (E.g., add-on monitor sales.) • Value-added services (Contracting) • Additional services for customers (energy, remodeling estimates, etc…) • Disruptive innovations (10x faster, better, cheaper than others in the value chain.)

28. Pre-Closing Issues Material defect? Discussion vs. Counter-Offer Time to finish inspection/work Amount of & cost of escrows Payment at closing Post-Closing Issues Services liability: What would a reasonable expert do? Post-closing repairs: budget, contracts, timing, payment methods Annual inspection and other follow-on services Legal issues

29. Defects and Casualties • Material defect: contract breach, with DuPage contract remedies • Casualties: 10% or more casualty required to let buyer out of the contract (DuPage contract): inspection could verify

30. Time to finish inspection/work • Inspection is controllable • Subcontractors and other work before closing is difficult • Make sure closing is extended, or you and others may not be paid! • Remember: mechanic’s lien rights apply to you

31. Escrows • Title company or lawyers hold the money • $175-250 fee to do one • Escrow conditions strictly enforced: completion of work, reasonable satisfaction, release of liens, only then release of funds

32. Payment at Closing • Know when the closing will be • Know who your customer is: the seller, the buyer? • Who pays you? The seller’s lawyer’s secretary, if they control title • Make sure you are paid before you release your lien • Consider collecting at closing, or on closing day

33. Expert Liability • Standard: What would a reasonable expert do? • Protection: What disclosures were given to the buyer? • Insurance: non-wilful and not grossly negligent professional errors and omissions: cost of defense, cost of judgment • Remember California: mudslides, other outside conditions • Contract may limit customer remedies: strictly construed

34. Post-Closing Work • Pick your role: general contractor, or owner’s representative? • Separate contracts are needed. • Payment for services (percent of job, or time on task) needed. • Reliable subcontractors needed. • Time pressure is lower, budgets are tighter.

35. Annual Inspection and Other Follow-On Services and Products • Define the service by contract: don’t be an insurer • Update services to meet new dangers (radon, mold, gas, floods, etc…) • Verify product liability/warranty coverage for manufactured products, have retailer functions covered in insurance • Note sales tax payment and reports

36. Conclusion: Any Questions?