Included as part of PCT’s Top 100 coverage is an interactive map. The map shows the locations of each of the headquarters of PCT’s Top 100 firms, all of the demographic data included on the list and live links to each of the companies’ websites.
How does a pest management professional turn a buyer into a customer? That was the question posed by Jeff Tucker to attendees at this year’s BASF Skill Development Seminars. The answer, Tucker said, is for pest management professionals to sell on value, not price.
Tucker first noted the important distinctions between a buyer — a person who makes purchases — and a customer, defined by Tucker as "a person or company that has had a positive experience with a product or service they purchased and will, in all likelihood, purchase the same product or service again. They are also likely to recommend the product or service to others."
Tucker provided key insights into companies — and not just pest control companies — that excel at value-added selling. He said a value-added company:
• Delivers a valuable total experience to their customers
• Does not react to competition
• Pursues excellence in all that they do
• Outperforms the competition by creating lasting value, NOT by copying a competitor or trying to tweak a "me too" solution
• Consistently challenges themselves to reach higher
• Always sells value, not price
Specific to the pest control industry, Tucker cited Bugs Burger Bugs Killers as a great example of a company that didn’t follow the leader, but charted its own course. In the early 1980s, the South Florida company, under the direction of charismatic leader Al "Bugs" Burger, shook up the industry. "[Burger] said, ‘I can do this better. I can bring more value to the customer and get more money for it.’"
Burger sought out hotels and restaurants because he liked the hospitality industry. "He said, ‘I tell you what. I want to do your pest control. If you ever see another cockroach I will give you back every dime you ever paid. If a customer sees a cockroach I will personally apologize and bring them back at my expense and give you all your money back. Oh, and it will cost you 10 to 15 times what you are paying now.’"
Burger made millions of dollars with this "outside the box" business model.
Tucker also related the story of Burger attending an industry meeting, standing up and declaring, "If you have roaches in your commercial accounts and you are taking money from your customers you are a thief." Burger was so successful that he was literally feared by his competitors. "People would say, ‘Oh no, Bugs Burger is coming to town. Get your women and children off the streets. Hide your commercial accounts. Bugs Burger is going to get them and he is going to get them for 10 to 15 times what we are getting them for.’"
PEOPLE ARE THE KEY. Ultimately it is the customer who determines whether or not your company is delivering value, which is why the single, unique dimension of value is people. So what is a service technician’s role in turning buyers into customers? After all, for the most part, the sale typically has been made by the time technicians become involved. It’s important to remember that the sale doesn’t end just because your company has been chosen to do the work, Tucker said. "They are still buyers at this point, so the technician’s role in value-added selling is critical."
Tucker cited the example of a standout Texas service technician, whom he has shadowed. She worked as a residential service technician for almost 20 years, servicing fairly high-end accounts. Realizing what a stellar job she was doing, her company approached her about becoming a supervisor. She proceeded to inform her customers she would be leaving to transition into management and phones began ringing at the office with customers upset about the prospect of losing her. Her customers had come to rely on, depend on and trust her. Her company had to put off her integration into management for several months and, ultimately, a 10-year veteran technician took over her route after she introduced him to her customers.
Tucker has ridden with her and witnessed first-hand her ability to deliver value-added service. "The minute her feet hit the ground she is in value-added mode," he said. "If there is a newspaper in the front yard…without even thinking about it she will pick up that newspaper and hand it to the customer. If there is a garbage can that has been emptied and in the street, she will drag it from the street back to the house before knocking on the door. That’s value added. It’s not always about pest control — it those little ‘something extras’ that customers remember."
Tucker said that the value she has built into her route is priceless.
Opportunities abound for service technicians to provide value-added services by showing concern for the customer and their environment, including judiciously and safely using pesticides to solve pest problems with minimal disturbance to a customer’s surroundings.
"These are things that are hard to quantify, but in the customer’s mind that is value," Tucker said. "If you don’t keep that in mind when you are selling value, you miss out. There are a whole bunch of great things to sell — to talk about with the customer — other than simply price."
The author is Internet editor and managing editor of PCT magazine and can be contacted at firstname.lastname@example.org.
Everyone is getting hosed at the pump this summer. With fuel prices higher than $4 per gallon as of press time, the pressure is on especially for service companies with fleets, where vehicle costs including gasoline can be the fourth largest budget line item, as is the case at Rollins.
According to a National Pest Management Association 2010 Operating Cost Study, a pest management professional will allocate an average 4 percent of total vehicle expenses toward fuel — the largest vehicle cost. When prices go up pennies on the gallon every week, the monthly gas bill is a real slap to the bottom line, no matter the size of your operation.
Mark Slater felt the burn in 2008, the last time gasoline prices topped $4 per gallon. "Almost overnight, our fuel bill went up close to 25 percent," says the president of Turner Pest Control, Jacksonville, Fla. "Fortunately, we had anticipated a fuel increase that year — however, that increase in 2008 redefined our definition of high fuel prices."
In fact, that 2008 increase had a 1-percent impact on Slater’s bottom line. "We would certainly rather have that 1 percent in our pockets to invest in the business or our employees," he says.
Summer 2011 could set the bar even higher. And stakes could be greater if political unrest in Northern Africa and the Middle East continue to drive prices in a U.S. economy struggling for air after the recession. Meanwhile, PMPs are watching the cost of materials rise as they manage this fuel hit and skittish consumers who could think twice before spending on any "luxury" services like quarterly pest control (depending on where you live), says Rusty Markland, chief operating officer, Superior Pest and Lawn Management in the Washington, D.C., metro area.
"We’re not the only ones faced with rising gas prices — our customers are," Markland says. He maintains that pest management professionals who want business must find a way to offset higher costs by running leaner, not charging customers more. "If you lose that empathy for your customers and you raise prices, you make it harder for them to pay the bills," Markland says.
You can’t control the cost of gasoline. But this summer you can look inside and find ways to protect your bottom line and retain clients. "We learned that over time, as it relates to fuel and many other aspects of our business, that you have to look at it as a process and not a program," says Gene Iarocci, Orkin’s vice president of corporate administration, speaking on behalf of parent company Rollins. "We put processes in place to manage our fuel consumption that have become part of our daily routine."
Here We Go Again. The last time prices hit $4 per gallon, in 2008, Bert Snyder took a close look inside his operation, Palmetto Exterminators based in Charleston, S.C. "We did a hard self-analysis of our operational efficiencies," he says. Route optimization efforts included plugging every account into a software program that organized tight, efficient routes.
Over the years, Snyder has worked to improve each technician’s productivity by 25 to 30 percent by revisiting routes on a regular basis, along with reducing customer callbacks by educating customers on which pest problems necessitate a visit, and which problems don’t (i.e., on the South Carolina coastline, spotting an already dead cockroach is no reason for a four-alarm fire). "It’s hard to get technicians to spend the time educating customers," Snyder says. "They want to go in and do what they need to do, and they don’t want to dialogue a whole lot.
"We have to emphasize to technicians the importance of communicating services: what is a realistic callback and what are realistic service expectations," he adds.
These strategies helped Palmetto Exterminators avoid price hikes and keep up with inflation since 2008. "Moving forward, the bigger challenge for us will be how to absorb additional costs of chemicals plus the gasoline prices when you have 80 trucks on the road every day," he says, noting a 20- to 30-percent increase in fuel costs as of late March 2011. "We’ll have to do another self-analysis," he says.
Vicki Hummel, vice president of Myers Services, headquartered in Dallas, Texas, referred to the U.S. Energy Information Administration’s website (www.eia.doe.gov) to estimate fuel prices while budgeting back in 2008. She saw the hike coming. "The [site] is not precise, of course, but it’s better than getting slapped in the face," she says.
Still, fuel cost Myers Services an additional $35,000 more than budgeted, just between the months of June and August 2008 when prices peaked. So the company installed GPS systems in all vehicles. This way, managers began to monitor personal use of vehicles. (Technicians are only allowed to drive trucks to and from work.) "By paying attention to the details and making technicians aware that we were watching it," says Hummel, "we let them know they need to do their best to help us because it affects the bottom line."
Do employees care? Sure they do. "Our guys could make more money [by improving route efficiency] because they work on commissions," Snyder says.
What’s different this summer compared to 2008 is the economy. The rise in oil prices will reduce the pace of economic growth and inflation somewhat, but should not lead to another recession, or "double-dip," according to a March 2011 report by Raymond James Financial Center in St. Petersburg, Fla. Meanwhile, the Federal Reserve will watch the impact of oil prices and is not likely to tighten monetary policy, the firm predicts.
Running Leaner Operations. You can’t control gas prices, but you can consume less and offset the cost by working smarter. Enter GPS systems and mapping software designed to optimize routing. "It’s easy to monitor what happens inside the four walls of your office, but the second you get outside of those four walls…" says Mark Roberts, chief marketing officer for Discreet Wireless, a 10-year-old producer of mobile tracking devices.
"With the correct management approach, you can leverage your resources and that can have a real positive benefit on your day," Roberts says, noting that 30 to 45 minutes of idle time is about 1 gallon of gas — or $4 per day. "You multiply that by the number of vehicles you have, and over a year, that adds up."
Technician accountability is emphasized at Massey Services, Orlando, Fla., through processes that ensure production standards are met for every job function, says Adam Jones, vice president, quality assurance. Daily mileage logs are reviewed by supervisors and summary reports are prepared for each technician. "We look for discrepancies and if we have to, we do individual audits," Jones says.
Slater instituted a variable pay component for service managers that rewards them for improving route efficiency on a monthly basis. It works like this: By using historical data gathered from trucks’ GPS systems, each manager calculates the "baseline" route efficiency measured by miles per stop. At the beginning of the year, the company sets targets for each manager and develops strategies to reach those goals. "If the manager is effective in implementing the initiatives and properly managing his business, he shares in the gains that he is bringing to the company," Slater says. "I believe it is key to the success of our business to have our management team properly rewarded for contributing to the success of the organization."
Slater also encourages associates to shop for the lowest fuel prices, though he says, "Hands down, the best investment we ever made that helped us manage our fuel usage was installing fixed active GPS in our fleet."
Iarocci shares that Orkin can manage fuel charges through a preassigned fuel card distributed to each technician. Employees must punch in their I.D. number at the pump to use the card. Reports are generated and reviewed at a branch level, so Orkin can tell whether a technician filled his truck with high-test gasoline rather than "regular," or if more gallons were used than a route requires.
Technology is helpful, but it’s not necessary to have GPS to improve routing and reduce fuel consumption. Arnold has explored GPS for his fleet of 80 vehicles, but he hasn’t invested in truck-mounted units yet. He does, however, use a software program to optimize routes. "We run 200 to 300 stops in a month and the average truck runs 12 to 15 stops a day," he says of the volume. "We found that with quality employees, if they can run the route we assign to them, we stay efficient."
Prepping for Price Hikes. Arnold remarks on this summer’s expected gas price hikes: "This time, I’ll tap the oil well behind my office here and start producing at home." He’s kidding, of course, though given the political turmoil in Northern Africa and the Middle East, the lure of extracting black gold from home to fuel the fleet is mouth-watering.
But then there’s reality. And it’s not pretty for any industry — and there’s an economic domino effect triggered by rising fuel costs. According to IHS Global Insight, for every sustained $10 per barrel increase in oil prices, U.S. gross domestic product declines by 0.2 percent. High prices at the pump put a damper on consumer spending. And during a one-month period when the Libyan civil war broke out, gas prices shot up to more than $3.55 nationally (up 38 cents). By the time of publication, PMPs could be facing costs in excess of $4 per gallon.
Arnold talks casually with his business partner about the self-fulfilling prophesy of fuel talk. "You get enough people talking about $5 per gallon gasoline at the pump," he says.
But the hike is happening, and Roberts sees no end. Who knows how high the ceiling could be. "If I could predict the price of a commodity…," he muses.
So what are you going to do about fuel, aside from dream about a backyard well?
"We are going to grab some more work," Markland says. "We are all faced with fuel costs every month and you can’t control those. But we can generate more business to cover those costs. We can sell ourselves out of this problem."
Specifically, here are some strategies you can put into place today at your company to take the edge off of that next trip to the gas station.
• Pair the vehicle to the job. Arnold has two Toyota Prius hybrids in his sales fleet that average 45 to 55 miles per gallon of gas. The rest of the sales force drives Toyota Scions, which average up to 35 miles per gallon. "We scaled back on the type of trucks we use, and by being more effective in our Integrated Pest Management approach, we don’t necessarily have to carry the bulk of product that we used years ago," he says, noting that the four-cylinder trucks average 17 to 20 miles per gallon, but larger trucks with V8 engines average 10 to 15 miles per gallon.
• Purchase wisely. "Instead of buying small, we bought big which brought [material] prices down, and we have the ability to stockpile," Markland says.
• Prevent callbacks. "Stress to your technicians the importance of doing the job right the first time to minimize callbacks," Hummel says. Send the message that saving on gas is a priority — but skimping on service is not acceptable. "You have to make the customer happy," she says.
• Reassess routes. Hummel is reviewing routes "more aggressively and more often," at least monthly and always after winning a big piece of business. By communicating with technicians the company goal to route tightly and use less gas, she says employees are sometimes the first to point out route overlaps. Meanwhile, in the pursuit of avoiding zig-zag and reducing windshield time, Hummel is careful to honor all customer requests for time of service. "Routing has to be in the customers’ best interests, as well," she says.
The author is a freelance writer based in Bay Village, Ohio. Send her an e-mail at email@example.com.
Surcharge or Not to Charge?
Not sure whether to pass on the higher pump prices to customers? PCT talked to companies to find out the pros and cons of fuel surcharges.
Mark Slater, Turner Pest Control: Turner Pest ran a test pilot program for fuel surcharges several years ago. "We came to a quick conclusion that the approach was just not a good fit for us or our customers," Slater says. "The effort it took to explain the charge to customers far outweighed any costs that the fees offset." The lesson: Don’t itemize the price increase. Slater says customers were more accepting of a small increase in regular fees to cover the increased cost of doing business.
Rusty Markland, Superior Pest and Lawn Management: "What fuels the business is business," Markland says. "If you add a fuel surcharge or raise prices to cover gas prices, that can decrease your business. So then you’re hit with a double whammy."
Gene Iarocci, Orkin: "We have not been an advocate of the fuel surcharge," Iarocci says, despite some transportation industries’ tendency to pass on the cost to customers. "We look at pricing annually to determine based on costs that we incurred from the previous year if we need to make adjustments."
NPMA Legislative Day 2011 was a homecoming of sorts for one the industry’s own — Robert Dold (R-IL), who represents Illinois’ 10th Congressional District and is the former president of Rose Pest Solutions. Dold was elected last fall with the support of many pest management professionals from across the U.S. Dold gave the luncheon keynote address, sponsored by FMC Professional Solutions.
Dold ran his campaign on a pro-business platform and his first act after being sworn into Congress on Jan. 5, 2011, was co-signing H.R. 4, "The Small Business Paperwork Reduction Act." This bill fights to defeat a part of the recent health care reform law — a provision that would directly impact businesses of all sizes, but would be particularly painful for small and medium-sized businesses, which includes the majority of pest management companies throughout the country.
At Legislative Day, Dold said he’s proud to be a part of a freshman group of congressmen who are "pressuring leadership" to act pro-business and fiscally responsible. "Our job is not to create jobs, but to create an environment that allows you to create jobs," he said.
IMPORTANT ISSUES. Legislative Day attendees took to Capitol Hill to encourage their representatives to consider the industry’s position on a pair of important issues.
The first was support for H.R. 872, the Reducing Regulatory Burdens Act of 2011, which was introduced in response to a January 2009 Federal Appeals Court ruling that requires costly and burdensome Clean Water Act National Pollutant Discharge and Elimination System (NPDES) permits for millions of pesticide applications. This ruling would impact many pest management professionals, especially those performing mosquito and aquatic weed treatments.
Just weeks after Legislative Day, on March 31, the U.S. House of Representatives by a vote of 292-130, passed H.R. 872. Fifty-seven Democrats joined 235 Republicans to get to the two-thirds vote necessary to pass the bill on a House suspension calendar. The bill now moves to the U.S. Senate.
In a separate but related matter, on April 4, U.S. Sen. Pat Roberts of Kansas introduced legislation similar to H.R. 872 in the U.S. Senate.
The other goal for Legislative Day attendees was to encourage their representatives to support H.R. 967, the "Bed Bug Management, Prevention and Research Act of 2011." H.R. 967 was introduced by Representative Jean Schmidt (R-OH) in response to the dramatic resurgence of bed bugs in the United States in recent years. It aims to find ways to help Americans cope with this pest. Specifically, the bill initiates and directs a commonsense strategic federal response to the bed bug pandemic, including:
? Authorizing a federal bed bug research funding program to resume research that has been neglected for 50 years;
? Requiring efficacy testing for minimum risk pesticides to protect consumers from products that don’t effectively manage bed bug infestations;
? Adding "quality of life" criteria the EPA must consider when registering a public health pesticide so as to help provide professionals and consumers with safe, affordable and effective tools;
? Establishing a Bed Bug Mitigation Pilot Program to provide subsidized treatments for those on fixed and low incomes
ROVE SPEECH. Another highlight of Legislative Day was an appearance by Karl Rove, former senior adviser and deputy chief of staff to President George W. Bush. Rove gave the afternoon keynote speech, sponsored by Dow AgroSciences. Rove expressed dismay at Congress for the problems passing a budget resolution. "Imagine if you were six months into your fiscal year and not having a blueprint for your fiscal year," he said.
The author is managing editor of PCT and can be contacted at firstname.lastname@example.org.
Orkin Pest Control’s Chris Gorecki
Receives FMC Legislative Day Award
In a career that spans 23 years, Orkin’s Chris Gorecki has been one the pest control industry’s most active members when it comes to regulatory issues — not only at Orkin, but for NPMA, where he currently chairs NPMA’s Government Affairs Committee. For these and other contributions Gorecki, Orkin’s vice president of quality assurance, government and environmental affairs and termite claims, was presented with the annual FMC Legislative Day Award.
Gorecki’s responsibilities at Orkin include the development, implementation and auditing of procedures for termite, residential and commercial pest control services for all of the Orkin branches. He also acts as the corporate representative, expert witness and fact witness in termite litigation matters for Orkin.
Gorecki serves on the Georgia Structural Pest Control Commission as well as several pest management committees.
Amy O’Shea, director, FMC Professional Solutions, presented Gorecki the award and noted that his nominator described him as "a positive influence within the Orkin organization. He is truly concerned about the company, his employees and their customers. He is an exciting executive to work with."
Copesan Raises Over $13,000 for Pest Management Scholarships and Research
Copesan and Syngenta teamed up to raise record dollars for two nationally recognized organizations providing scholarship funds and research support to the industry.
During Copesan’s annual conference, attendees, including members of Copesan’s Partner network and pest control suppliers, generously contributed a record $6,625. Copesan matched this amount for a total donation of $13,250 to be equally divided between the Pi Chi Omega Scholarship Fund and the National Pest Management Association (NPMA) Foundation. Pi Chi Omega will also receive $450 raised in an auction of a unique "Arthropod of the Hour" clock featuring preserved insects on each hour of the face. The clock was created and donated by Dr. Gerry Wegner, technical director and staff entomologist, ProGuard Commercial Pest Solutions of Columbus, Ohio, a Copesan Partner.
Pi Chi Omega, a pest management professional fraternity, provides a number of $1,000 scholarships each year to deserving entomology students at universities across the country and around the world. The NPMA Pest Management Foundation has been providing grants for the research, development and refinement of pest management tools and techniques for more than 30 years. "Copesan is once again pleased to support both Pi Chi Omega and the NPMA Pest Management Foundation," said Deni Naumann, president of Copesan. "The record dollars raised reflect the excitement of our attendees and are a testament to the commitment of the Copesan network to growth in our industry. We believe strong, future leaders and scientific developments are essential to providing the best possible service to our clients now and in the years to come."
Sponsored by Syngenta, 2011 marked the tenth anniversary of the Annual Charity Raffle where the Copesan network and suppliers have donated more than $60,000 to Pi Chi Omega and to the NPMA Pest Management Foundation.
PCT Technicians of the Year Honored
NPMA Legislative Day 2011 was an opportunity for PCT to recognize the 2010 Service Technicians of the Year. For the past 15 years PCT has recognized a trio of standout service professionals in the residential, commercial and termite categories.
This year’s winners were:
• Residential Technician of the Year — Mariano Acosta, Arrow Exterminating, Lynnbrook, N.Y.
• Commercial Technician of the Year — Jim Bailey, Orkin Pest Control, Columbus, Ohio
• Termite Technician of the Year — Todd Walker, B&B Exterminating, Jacksonville, Fla.
"PCT’s annual Technician of the Year Program is an opportunity to recognize a trio of service professionals who truly stand out," said PCT Managing Editor Brad Harbison. "These individuals go above and beyond their job description, whether it’s mentoring new service technicians, assisting with training programs or growing their routes through sales efforts."
|GET LISTED ON THE 2012 PCT TOP 100
PCT magazine is in the process of identifying the largest 100 pest management firms in the U.S., based on 2011 revenues. Please fill out the online form with information about your company and submit it to us by Friday, February 17.
Editor’s note: May 2011 includes PCT’s Top 100 List, the annual list of the pest control industry’s 100 largest company’s based on year-end revenues (in this case 2010). CLICK HERE to download this year's list.
A few notes about this year’s list:
• The abbreviations on the list are as follows: * = estimated figure; n/a = no answer/unknown; NC = no change; % GPC = general pest control; % TC = termite control; % Other = other services (see next bullet point); % RES = residential; % COM = commercial; EMP = employees
• In the “other” category, services include turf and ornamental work, landscape maintenance, “home” services (i.e., handyman services, home inspections, carpet cleaning, insulation services, moisture remediation, etc.), fumigation, heat treatments, bird control, mosquito control, wildlife exclusion, etc.
• Companies in the PCT Top 100 list earned revenues of $4,996,409,782 in 2010, which was an increase of $230,363,239 from 2009.
• There are 30 states and three Canadian provinces represented in this year’s list. Florida has the most firms on the list (14) while California has the second most at 12.
• Revenues for the three Canadian firms on this list are reflected in U.S. dollars. The late-April exchange rate was 1.05 Canadian dollar to U.S. dollar.
• Terminix acquired Chino Hills, Calif.-based Antimite Termite and Pest Control and its Arizona affiliate, SOS Exterminating, in August 2010, so Antimite/SOS is not included on this list. Antimite/SOS’s revenues in 2009 were estimated to be $40 million, ranking the firm at #20 on PCT’s Top 100 List.
• Rollins acquired Waltham Services, Waltham, Mass., in July 2010 so Waltham is not included on this list. Waltham’s revenues in 2009 were $18 million so last year the firm ranked #33 on PCT’s Top 100 List.
• In December 2010, Atlanta-based Arrow Exterminators acquired Nader’s Pest Raiders of Ponte Vedra Beach and Fernandina Beach, Fla. Since this list reflects 2010 revenues, and Nader’s operated as a separate entity for nearly the entire year, it is listed separately from Arrow.
• This is the first time the revenues of Massey Services (#5) includes those of Middleton Pest Control, Orlando, Fla., which it purchased in December 2009.
• Visit PCT’s interactive map (http://bit.ly/pcttop100) to see company information and view live links to each of the Top 100 firms’ websites.
• This list was compilied by the PCT staff throughout the spring of 2011. E-mail PCT Editor Jodi Dorsch at
email@example.com with comments about this list.
New to the List: EcoFirst Pest Control
David Royce, CEO of EcoFirst Pest Control (#51), is a man with national aspirations.
Last month, the company he founded just two short years ago announced it was opening new locations in Houston, Austin, San Antonio and Sacramento, giving EcoFirst a presence in nine states — California, Washington, Oregon, Arizona, Texas, Utah, Colorado, Kansas and Missouri — despite the country’s much-chronicled economic woes. "Pests don’t know there is a recession," he said.
A member of EPA’s Pesticide Environmental Stewardship Program, Royce has positioned EcoFirst as an "environmentally responsible" company, a message he believes resonates with modern-day customers. "We wanted to create a reduced impact service that took away the initial fear from the customer," Royce said. "Customers want to know that the professional servicing their home is using the most progressive products available."
Royce, 34, got his start in the industry working for another highly progressive company, Clark Pest Control (#10), Lodi, Calif. Following his sophomore year at Brigham Young University (BYU), Royce returned to his native California to work for the family-owned business. He had never sold pest control services before, but a college friend recommended that Royce give it a try. "He told me how much he was making and I didn’t believe him at first," he said. "I actually made him show me the check."
Sure enough, his friend was earning a good living, particularly for someone with limited sales experience. "I really respected Clark," he recalls of those early days in the industry. "I liked the pride they had in their company and the higher quality work they provided."
Upon returning to BYU the following year to earn his finance degree, Royce saw an ad in the college newspaper for a Dallas-based company called Moxie Pest Control. The company was owned by fellow BYU graduate Jason Walton, who sold Royce on the merits of moving to Dallas, as well as the benefits being an entrepreneur. Joining Moxie Pest Control proved to be one of the best decisions of Royce’s life.
While working for Moxie, Royce developed a close working relationship with Walton, putting his desire for an MBA and Wall Street aspirations on hold. "I had planned to pursue a career in investment banking," he recalls, but that all changed when Walton asked him, "Why don’t you start your own pest control company and I’ll mentor you? It was a total 180 from what I thought I was going to be doing."
Royce worked for Walton for three years, serving as vice president of marketing and recruiting sales personnel for the rapidly growing company. "It was a great opportunity to get into management at a young age," he says. "Jason became one of my best friends. I have always looked up to him and I do to this day."
When Walton decided to sell Moxie Pest Control to Terminix in 2004, he told Royce he would structure a deal so he could license the company name in Southern California — where his wife had recently enrolled in law school — for a modest ownership stake in the business. Royce took him up on his offer, growing the business over four years, before eventually selling to Terminix in 2008, just like his mentor. A year later, he launched EcoFirst Pest Control.
While there are similarities between the two companies, Royce’s new business model is resulting in much more rapid growth nationally, which explains why he modeled the company’s management structure after some of the largest pest control companies in the business. "My father was COO of several Fortune 500 companies," Royce said. "So I really try to run EcoFirst like a professional organization, having learned from his example."
While entering just its third year of operation, Royce said his business plan – like EcoFirst’s management team – is performing extremely well. "I did a bunch of financial modeling when I first put the business plan together. Every year we have met or exceeded my original expectations. It’s been a lot of fun," Royce said. "We’re trying to build a better company, not just a bigger one. Our goal ultimately is not to be the biggest, but the best at what we do. We’d love to have 50 to 60 locations across the U.S. in the next decade." — Dan Moreland X
Reach $100 Million
Hitting the $100 million mark is cause for celebration no matter when it happens. But achieving that milestone in a year as fraught with economic challenges as 2010 merits a little curiosity as well. How did The Steritech Group crush its 2009 numbers to pull in $100 million in 2010?
"We deliver consistently on our promises," says Steritech CEO Mark Jarvis. "In the service industry, execution is the ultimate differentiator, and we are maniacal when it comes to execution. The recession has shown us that there is always room in the market for consistent, high-quality service. People are willing to pay as long as you deliver."
Based in Charlotte, N.C., The Steritech Group is the second-largest commercial-only pest prevention provider in North America. The company has steadily achieved double-digit growth in its quest for the nine-digit threshold, and hasn’t missed a beat where new market opportunities are concerned.
Case in point: Steritech launched the SleepEasy Thermal Chamber late last year, offering hotels, resorts, hospitals, colleges and other institutions an eco-friendly solution to bed bugs that gets their rooms back in service in as little as 24 hours.
"Bed bugs gave us a helping hand, pushing commercial volume up in 2010," says Jarvis.
How can other pest management companies reach this high level of financial success?
"Have a clearly articulated vision of what you want to be and then execute flawlessly," says Jarvis. "Figuring out what success looks like and repeating that again and again consistently is the magic." — Donna DeFranco X
Copesan and Abell Pest Control Part Ways
Copesan Services announced in early April that it will be ending its business relationship with Abell Pest Control (#13), Etobicoke, Canada. This action, which caught many in the pest control industry by surprise, involves the transfer of Copesan accounts to other Copesan Partners. At press time, the final transition was pending.
"Changing the fabric of our Partner network is never easy," Copesan President Deni Naumann said. "We believe this strategic decision is in the best interest of our clients and is crucial to our continued success in that it will allow us to fulfill our commitment of cohesive, consistent and exceptional Copesan account management and service to our clients throughout the United States and Canada."
Naumann told PCT that the decision was made to better serve Copesan clients.
"I think that Abell, having to cover all of Canada, they have had for a number of years their own electronic data collection system and some of their own tools," she said. "For their scope — being a national service provider in Canada — they put together the programs that best address what they’re providing across the whole country. For our clients, coming from the U.S. with Canadian locations, we want to ensure that there is the same program in place...that the same electronic collection tools and trending reports are also used in Canada. And there was not that consistency."
Abell Pest Control joined Copesan in the late 1980s after Copesan ended its business relationship with PCO Services of Canada, which was purchased by S.C. Johnson in 1987. At that time, Abell was a smaller, regional pest control company, with annual revenues in excess of $4 million (Canada dollars). During the last 15 years, Abell has experienced rapid growth and now services Canada from coast to coast, as well as the Great Lakes region of the U.S., and other strategic U.S. locations. Abell’s annual revenues now exceed $50 million (Canada dollars). John Abell, president of Abell Pest Control, told PCT that because of this growth Abell no longer "really fit the profile of a Copesan company."
"We’ve evolved from being a complementary service provider for Copesan to, in essence, being a competitor to Copesan," Abell said. "We dominate on the national scene in Canada, so our dependency on Copesan has diminished to the point where the revenue stream that we would derive from Copesan represented less than 1/5 of 1 percent of our revenues — less than $10,000 [Canada dollars] a month. So I think it has evolved to the point where [Abell leaving Copesan] was almost mutual."
Abell likened this decision to Copesan ending its business relationships with Western Pest Services (purchased by Rollins in 2004) and J.C. Ehrlich (purchased by Rentokil in 2007). "You could say that our personal growth and evolution has resulted in the same outcome," he said. — Brad Harbison X
The Jacksonville Four
What’s in the water in Jacksonville, Fla.? Four of this year’s Top 100 companies are based in Jacksonville, where there are certainly plenty of pests to go around, but is there really enough business to sustain four large companies? A closer look reveals that three of the four operate beyond the Jacksonville region and, in fact, beyond Florida, so although they each take their piece of Jacksonville, none of them is so heavily concentrated as to dominate the market there.
How have these Jacksonville businesses managed to maintain or increase their sales in the face of the recent economic unrest? They’ve taken a variety of approaches.
"We’ve adopted a new strategy, focusing on growth from a density perspective rather than a geographic one," says J. Bryan Cooksey III, president of McCall Service (#65). "Basically, we analyze revenue per ZIP code to determine which areas are strongest for us. Then we bolster our sales and marketing efforts to those targeted areas. Where our coverage is light, we subcontract the accounts or pull out completely. We actually made the strategic decision to pull out of Atlanta, where we had been since 1979, because we realized we were spending 80 percent of our time on 20 percent of our issues. It was one of the best moves we ever made. Building more density within our existing footprint — and making acquisitions when the circumstances are right — will be key to our growth going forward."
Turner Pest Control (#61) adopted a strategy when it changed ownership in 2002 that put it in a better position to weather the storm. President Mark Slater explains: "At the time the company was purchased, its revenue was 30 percent recurring business and 70 percent nonrecurring. In the past eight years, we’ve reversed those numbers. By focusing on ongoing pest control, we’ve grown revenues from less than $4 million to $9.35 million."
Turner was fairly heavily invested in the pre-construction market when the housing market crashed, though, so it took a lot of effort to offset the downturn. "We were doing about 6,000 residential pretreats a year," Slater reports. "They’re not building 6,000 houses in the entire city now. We started an aggressive campaign to grow our residential customer base, upping our advertising expenditures from 3 percent of revenues to 8 percent, networking with Realtors and other organizations, and basically pounding the pavement."
Another major networker is Bug Out Service (#41), which tops the list of Jacksonville companies in terms of revenue ($14 million). President Paul Felker says that his firm, which operates within a five-county area in and around Jacksonville, is active in its local communities. "We understand the issues that concern our neighbors and customers," he says. "For example, we know how important environmental responsibility is to Jacksonville residents, so we offer low-impact alternatives to protect homeowners’ properties as well as the St. Johns River."
Felker reports that Bug Out has been aggressive in terms of both marketing and pricing the past few years, heeding the need to reach out to customers and prospects with a new level of enthusiasm and understanding. Jessica Miner, president of B&B Exterminating Company (#91), echoes his sentiments.
"In times like these, it’s even more important to work closely with your customers," Miner says. "Homeowners are dealing with all kinds of financial pressures, so we try to arrange terms they can manage. We’ve become very active in the community, too, doing trade shows and building customer relationships face to face. When people get to know us and see the level of commitment we bring to our service, it builds loyalty. They know we’ll do anything to earn and retain their business, and they appreciate it."
If anything good can be said about the recession, maybe it’s that pest management companies not only in Jacksonville, but around the country, have been developing and sharing ideas and innovations that are helping to revitalize our industry. Cooksey says that McCall definitely benefits from learning the best practices of others. In particular, McCall’s relationship with Copesan provides a wealth of ideas.
"Being part of the Copesan network has opened our minds and helped us change the way we think," Cooksey said. "You can learn a lot from interacting with others who are out there doing what you’re trying to do. We stay on the leading edge of technology and best practices — very strong tools in a difficult economy." — Donna DeFranco X
New to the List: Bulwark Exterminating
For nearly two decades, the migration of retirees and other warmth-seeking Northerners to the Sun Belt was as predictable as death and taxes. New construction reached record highs and fueled a variety of industries, including pest management. Pest management companies thrived as the market expanded, seemingly without end. Many invested heavily in the pretreatment market segment.
Not Adam Seever, president of Mesa, Ariz.-based Bulwark Exterminating (#31), which serves 11 cities in the Sun Belt, Seever foresaw the housing collapse and opted to focus his energies on retaining his established customers and market share rather than relying on the influx of new-construction business he predicted would grind to a halt at any moment. He didn’t believe in making investments in the pretreatment market.
"It was a gamble not chasing the new business, but I’m familiar with the dynamics of the economy, and I knew the growth couldn’t continue indefinitely," said Seever, who holds a degree in finance and statistical analysis. "It worked out for us. We’ve managed to keep our numbers steady (around $19 million) for the past three years, and I expect to see modest growth in the coming years."
Committed to Employees, Customers. Seever’s approach to strengthening his 12-year-old business began with the development of metrics to assess his employees’ performance. Those who scored among the top 80 percent were awarded bonuses to encourage them to continue providing top-notch service and set the pace for the rest of the team.
"Satisfied employees create satisfied customers," Seever says, "and we all know that it’s cheaper to retain an established customer than to win a new one. So I redirected a significant portion of our budget and efforts from marketing to employee satisfaction."
Those efforts also included supplying each technician with his or her own Smart phone, equipped with an application developed exclusively for Bulwark. It enables technicians to interact with the company database from the field, minimizing the technician’s need to come to the office.
"We’ve saved thousands of miles and a lot of our team’s time, because now they need to come in only once a week. I respect their time, and they appreciate that. We’ve built a culture that supports and nurtures employees. They’re inspired to provide great service and to smile when they visit customers," says Seever.
While many pest management companies have either folded or sold their operations in the economic turmoil of the past three years, Bulwark stands among those that remain steady and focused on the future.
Seever added, "When you know that you’re up against market challenges — that you aren’t going to be able to expand through the routes that got you where you are today — you need to focus on what you can change. Don’t let obstacles stifle your creativity. Invest in your people; they’ll come through every time." — Donna DeFranco X
New to the List:
Pacific Coast Termite
A recent success story in the pest control industry is Pacific Coast Termite (#49), which is based in Southern California (Tustin, Calif.) but has expanded to cover the entire state. The company, which was formed in 2007, grew its 2010 revenues 43 percent from the previous year despite the fact that California is one of the areas of the country most devastated by the recent economic recession.
"One of the big things that [co-owner] Dennis [Wilson] and I did when we started the company was to not tie ourselves into the real estate market," said James Grande, co-owner, Pacific Coast Termite. "We have targeted homeowners who want to stay in their homes and upgrade their homes and that has been successful for us. So, when the housing market crashed and homes began going into foreclosure, we were not affected one bit."
Instead, Pacific Coast has stayed true to its strengths. Wilson credits the company’s rapid growth to "word of mouth" referrals and excellent ratings from review bureaus such as the Better Business Bureau. "We’ve been able to hire and train quality people who present a really professional image," said Wilson, who added that Pacific Coast has hired several employees formerly in the grocery business.
Another reason for the company’s accelerated growth in recent years has been a more targeted and streamlined advertising campaign. Wilson and Grande have invested significant time and resources into tracking where, what and when to invest the company’s advertising dollars. For example, the company now decreases its advertising in winter months and summer months.
Wilson, age 46 and Grande, 37, started Pacific Coast in 2007 after both worked in the grocery business on the management side. "We went from really good paying jobs to taking a risk," Wilson recalled.
While most start-up pest control companies offer general pest control and then may add termite control, Pacific Coast has limited itself to termite control and related ancillary services such as wood repair, TAP insulation and rodent exclusion. This business model has served Pacific Coast well and Wilson said the company is well positioned for future growth. "In fact, through the first three months this year we are 33 percent ahead of last year," he said. — Brad Harbison X