Growth In A Down Market Despite tough Economic times…
Top 100 firms continue to grow through savvy business tactics and
A focus on continuous improvement.
How do they do it?
The economy is in the dumps, by you’d never know it by looking at the pest management industry. The majority of companies ranked in PCT’s Top 100 saw revenues increase in 2007 and expect the positive growth to continue this year. How do they do it?
COMMERCIAL REGIONAL MARKETS. While residential markets felt the squeeze, commercial and industrial business proved a winner for many professionals.
“ The commercial side has not slowed down at all, “ said Gregory Pest Solutions President Ben Walker, Greenville, S.C, who saw a 10 percent jump in revenue last year. “That’s where our concentration has been. “
Commercial work “was probably the strongest segment of our business,” said Modern Pest Services CEO Scott Stevenson, Brunswick, Maine.
A beefed up commercial and technical department helped Viking Termite & Pest Control in Bound Brook, N.J., differentiate itself from competitors, which was especially important in a challenging year like 2007, said President Ed Bradbury.
In Canada, where the commercial sector accounts for 80 percent of pest management, a housing-driven economy had little affect on business, said Abell Pest Control President John Abell, Etobicoke, Ontario, whose firm saw close to a 13-percent revenue jump.
The U.S. did have some economic bright spots. “Central Texas has continued to grow and economically prosper,” said Bobby Jenkins, president of ABC Pest & Lawn Services, Austin. “I’m very grateful we had reasonably good economic conditions down here.”
Roy Richardson, president of Royal Pest Management, New Castle, Del., shared the sentiment. In greater Baltimore and Philadelphia, gas prices were not as high as in other parts of the country, and housing and job markets remained strong. “ The economy in this particular area is really not so bad.”
It does help to have a recession-proof service offering, said Critter Control CEO Kevin Clark, Travers City, Mich. “Fortunately the animals don’t wake up reading the doom and gloom in the newspaper. They just continue damaging and infesting homes and property.” Compared to insects, animals often are perceived as a bigger threat by homeowners, and development in rural areas continues to set the stage for conflict, Clark added.
EXPANDING MARKETS, SERVICES. Firms with diversified services also fared well. Abell Pest Control began offering pest control and food safety sciences consulting. These non-traditional services “add value-added revenue to an existing client base,” said Abell. The firm took “a very aggressive marketing sales posture” to grow market share, and embarked on a major drive into the residential sector, which resulted in a “substantial increase” in revenue.
Critter Control expanded its preventive services with installations of chimney caps, insulation and gutter guards. “We continue to find ways to expand the brand and the services we offer,” said Clark.
Green pest management was a popular new offering. Not only did the service draw in new customers, but many existing customers upgraded to the program, said B&B Exterminating President Jessica Miner Killian, Jacksonville, Fla. Meanwhile, Modern Pest Services made its residential home Care Program “greener,” and also developed a quarterly residential tick program.
Some companies even bucked the downward termite trend with great success. Gregory Pest Solutions expanded the reach of its post-construction termite offerings from a few branches to branches in five states. And David Royce, owner of Moxie Pest Control, Corona, Calif., started a termite department from scratchy. Targeting only its current pest control customers, the firm pulled in $1.4 million in termite work last year.
On the flip side, Vulcan Termite & Pest Control, Pelham, Ala., focused on selling pest control to its existing 13,000 termite customers and increased pest control revenue 25 percent, said General Manager Fred Smith. Known as a termite company for 40 years, Vulcan combined its pest and termite operations last year. “The termite side is experiencing those economic difficulties…so pest control is where we feel we can step in and get a lot of good positive, smart growth,” said Smith.
Fumigation was golden for Royal Pest management in 2007. Its new 18-acre off-port fumigation site in Norfolk, Va., “was profitable in the first six months,” said Richardson. “It’s beaten all expectations.”
Rodent exclusion was “an incredible source of new revenue” for ABC Pest & Lawn Services last year, said Jenkins. “That’s accounted for a lot of our residential growth, because as the termite business has continued to go down, the residential rodent exclusion business has skyrocketed.” The company’s lawn care and maintenance business grew 22 percent last year and handyman services had “fabulous growth.” Diversification played a big role in last year’s gains, noted Jenkins. “We’re really hitting some great critical mass in terms of the staffing and the public’s awareness that we offer those services.” Customer trust in the ABC relationship will allow the firm to move forward with these types of services, Jenkins added.
Other firms grew through acquisitions. Middleton Pest Control in Orlando, Fla., expanded its footprint into South Florida by acquiring six companies last year. “It’s our intention to become a statewide company,” said CEO Chuck Steinmetz, who reported 12 percent growth in 2007. Organic growth will now be the focus. “We have a very aggressive plan and we’re very optimistic about this year. Conditions are such that I think there’s lot of opportunities for us to grow. “
SALES AND ‘STAY’ MOTIVATION. As Top 100 firms put the push behind cross-selling, they also found ways to motivate employees. Vulcan held monthly and quarterly drawings on goods ranging from $254 restaurant gift cards to big screen TV’s as extra incentives for technicians and office staff. “I think we’ve gotten a lot better (at cross-selling),” said Smith.
Middleton started a monitoring system to increase the activity of its sales efforts. “Sales are a function of how many people you ask to buy,” Steinmetz said. The new system is going to “increase sales dramatically.”
Strong door-to-door sales and customized service plans for each client remained Moxie Pest Control’s successful model. “If you really focus on quality, everybody feels better about it,” said Royce, who expanded into San Diego last year. “That’s how we acquire customers and made our dent in the market.”
B&B Exterminating zeroed in on employee team building. “We really try to take good care of our employees,” said Miner Killian. “That’s been a big part of having better service.”
Retention is key, said Bradbury. To help keep customers with specific economic needs on the books, Viking began offering flexible service plans. “We don’t want to lose customers out the back door.”
INVESTING IN YOURSELF. To grow and expand, always keep an eye on how you can improve, agreed professionals. “When things are tough, you have to invest in yourself if you can,” said Bradbury, who’s developing a new call center for Viking. “We’ve made arrangements so we can always try to continue to invest in ourselves, through better marketing tools and materials, advertising, training, whatever it may be.”
Miner Killian, who took the helm of B&B Exterminating two and a half years ago, began a program for promoting from within, expanded Internet advertising tactics and budgets, and saved costs by changing cell phone service plans, eliminating old text pagers and adding GPS.
Gearing up for an expected 16 percent revenue jump in 2008, Modern Pest Services expanded its corporate office, moved into a new service center and expanded another.
Royal pest management saw revenues increase 16 percent by changing from a wage-and-hour model to a production-based one. The switch took three years to complete, but was worth it, said Richardson. Not only did technicians take greater ownership of their customers, but profits and salaries rose, the customer loss ratio dropped 25 percent and turnover became nearly non-existent.
“The morale at the company is stronger than I’ve ever seen it,” said Richardson, who saw 20 percent organic growth in the first quarter of 2008. “All this growth…speaks to the professionalism and morale and the strong company we’re building around us,” he said. “It’s been a busy year, but it’s been an extremely fun year.”
The author is a frequent contributor to PCT magazine and can be reached at email@example.com.
Taken from PCT May 2008 Top 100 Edition.