I’m not sure if it’s real or imagined on my part, but it seems like almost every time I engage in a conversation on a home inspection forum or discussion board, the topic inevitably turns to pricing. What we charge for what we do seems to always be a topic that’s top of everybody’s mind; it’s always on the radar. Most inspectors are constantly complaining about the low prices that their competition is charging for doing inspections.
I’m no psychologist, but I think this may be an indication that the vast majority of us are not comfortable with the price we get for our product. Therefore, we complain about what other inspectors charge for their home inspections every chance we get.
In psychology, it’s called psychological projection: the tendency to deny a certain trait in yourself while simultaneously attributing that trait to others. Could it be that most of us are so ashamed of what we charge for our home inspections that we can’t wait to throw the blame for our industry-wide pricing problem onto our competition?
If it wasn’t for all of those other inspectors giving away their inspections, I wouldn’t have to do the same thing to stay in business.
It’s really the only way that I can compete. If I raised my prices, all the business would be going to those other cheap inspectors.
So, how do we decide on where to price our product? What sort of thought process are we subjecting ourselves to? What are the criteria that we use to analyze our situation and our marketplace, in order to determine where to best bracket our pricing?
The moment you make a mistake in pricing, you’re eating into your reputation or your profits.
Katharine Paine
Wouldn’t it be great if there was one big chart that we all referred to when pricing our services? 2000 sq ft, 15-year-old home with one HVAC system: $450. 3000 sq ft, new construction raised home with 2 systems: $575. Man, wouldn’t that make things easier?
Unfortunately, it doesn’t work that way. There is no master pricing chart that they give to you when you first become a professional home inspector.
Well, now you’re official. Here’s your license number, your Klein screwdriver, outlet tester and your copy of the official North American Home Inspection Pricing Guide.
Instead, we’re left to our own devices. It’s up to us to figure out what to charge for what we do. So, most of us do a quick little market analysis. We gather as much information about our competition as we can, trying our best to make sense of what our competitors charge for comparable houses. How much for this square footage; higher pricing for multiple HVAC systems; up-charges for additional space outside the living area; add-ons for common extra services; we do our best to get a grasp on what it is our market will bear. Then we take all that information and attempt to set our own price structure.
All too often, our own pricing comes down to one thing: getting in at a price point lower than our competition. We figure that’s probably the only way we’re going to get any business, by beating everyone else on price.
I’m just looking to make enough money to keep my company in business.
I’m just trying to survive here; I’m not looking to make a killing.
But, when you stop to think about it, it’s really not that simple. It’s not simply about keeping the doors open. It’s not only about putting food on the table and a roof over our heads. Now, don’t get me wrong; if we don’t do those things, none of this other stuff really matters one bit.
But, that’s not all there is to it. There’s got to be more to a job than collecting a paycheck. If that’s all there is to it, we probably wouldn’t have made the leap to owning a small business. Hell, it would’ve been a who lot easier to keep collecting a check while the boss worried about all this other crap!
Owning your own small business has to mean more. We should care about the product we provide. We should be proud of the work that we put our name on. We should feel satisfied, knowing that the service we perform helped our clients make an amazingly difficult decision with a little more confidence than they had before they met us.
We should be confident enough in what we do to charge a fair price for our product. We should be secure in the belief that we’ve done enough for our clients to see the value that we bring, the experience we possess and the benefits that we offer.
Pricing is actually pretty simple…Customers will not pay literally a penny more than the true value of the product.
Ron Johnson
We should be confident in the story that we tell ourselves and the story that we present to the world.
If we’ve done our job correctly, all our marketing, all our advertising, all the work that we’ve done up until now, our story will shine through. It will all culminate in our potential clients getting our message, hearing our story and getting what it is we’re selling; the value we’re providing.
They hear our message, they understand our value, and they feel like they’d be missing out if they didn’t get the chance to work with us.
Pricing is branding. Branding is a mindset. Your mindset, not the market, determines how much money you make or don’t make.
Richie Norton
Every one of us is a consumer. On a daily basis, we make decisions about where we’re going to spend our money. We choose where each of these decisions lies on our own personal scale of importance. Some things are trivial, and we rarely give them a second thought. But many decisions are important, or at least we’ve been trained (through effective marketing) to believe that they’re important. It’s these choices that require us to do a bit more analysis before we make a decision.
If we want to be a successful small business owner, and we want to ensure that we can charge a fair price for our services, then it’s our job to be sure that our clients know that deciding to hire a quality home inspector is important, too.
Price is what you pay. Value is what you get.
Warren Buffett
Once you firmly grasp who it is that you’re serving, you start to understand who qualifies for the title of your ideal client. When you understand the value of the service that you’re providing, it becomes easier for you to relay that information to your potential client. Which (hopefully) makes it easier for them to figure out that they’re making an important decision, one that should be based on much more information than who’s got the lowest price.
It’s all about the story we tell ourselves and, in turn, the story that we relay to our clients. If we’re successful, if we do a good job with our self-talk, that confidence shows through to our customers. Once you get clear with who you’re serving and how you’re serving them, the dilemma of pricing gets a whole lot easier.
Do not compromise on the quality and your customers will not negotiate on the price.
Amit Kalantri
Would you like to get an email every Friday where we share the newest things we’ve discovered about home inspections? CLICK HERE to sign up.
Want to be an Influencer in Your Field? Share This Post!
Thanks, Joe
