Distribution has always been a vital part of the pest management industry. If you walk into the office of an established pest management professional you are just as likely to see a photo of them fishing or at a ballgame with their distributor representative as you are to see family photos.
While the close-knit distributor community has become more of a “modern family” in recent years with acquisitions and mergers changing the names and numbers of distributors, most are still thought of as family in the eyes of pest professionals.
And like all families you don’t see eye to eye on everything but at the end of the day a sense of trust and reliance remains.
In a recent PCT magazine survey pest management professionals were asked their views on the current state of their relationship with their distribution partners. PCT conducted a similar survey in 2012 and we contacted several pest management professionals to gauge their reaction to the survey and comment on how things have changed in 24 months.
When asked to rate the overall quality of distributors serving the marketplace, respondents actually scored distributors higher in 2014 vs. 2012. Thirty-one percent of PMPs surveyed felt the overall quality of distributors was excellent — up eight percent from the 2012 study (see chart below).
The most recent survey also asked pest management professionals to rank the overall responsiveness of distributors on a scale of one to five, with five being “very responsive” and one being “not responsive at all.”
And once again the distribution community performed well, with 75 percent of respondents ranking the responsiveness of distributors at the upper end of the scale, a testament to the high-quality customer service provided by industry distributors (see chart below).
What are distributors doing to earn the confidence and business of PMPs? For Stanford Phillips, vice president of business development for Northwest Exterminating in Marietta, Ga., it is the personal attention and effort their distributor has demonstrated to help Northwest reach its business goals.
“We view our distributor as a partner in our success and they have been very proactive in helping us grow our business,” says Phillips. “They ask, ‘How can we better your business?’ and that is what we look for in all our partners.”
The executive management seminars hosted by their distributor are another example of a partnership that goes beyond simply recommending products and has helped Northwest grow and become a more efficient business — the proverbial win-win for both parties.
Phillips points out that pest management is a relationship-driven industry at all levels and that distributors who do the little things and go the extra mile for customers reap the benefits of a more loyal client.
“For example, when a distributor comes through in a pinch and delivers product to a job site on short notice it stands out,” says Phillips. “It shows they are looking out for your business.”
Bringing Value To The Table.
In addition to providing information, knowledge and advice on products and equipment, distributors play a key role in educating the industry.
For years distributors have offered training and recertification classes, and various technical services for their customers. These added-value programs continue to grow in importance, especially for smaller PMPs who may not have the resources to employ a full-time training or technical director.
“Distributors are not just in the business of selling product anymore, they are reshaping their business model to provide tools for pest management companies that will help them grow and become stronger,” says Mike Katz, president of Western Exterminator in Anaheim, Calif.
When asked what is the most important feature in selecting a distributor, respondents indicated a knowledgeable staff was number one (39 percent); pricing was second at 21 percent — a seven percent increase since 2012 (see chart below).
When asked how companies’ balance the pricing vs. service issue Katz says price will always be a starting point for PMPs, but whatever distributor brings the most to the table in terms of added-value will carry the day.
“Over the past few years distributors have filled in the gaps when it comes to fine-tuning their added-value services to customers and this is why satisfaction and loyalty numbers are strong,” says Katz. “They are investing themselves in their customers’ business success and that is important.”
For Scott Steckel, vice president of operations for Varment Guard in Columbus, Ohio, the single most important item their distributor brings to the table is ease of execution in the ordering process.
“As we expanded the number of branches inventory management was an issue and our distributor found a solution that allowed us to better track when deliveries were scheduled and make sure specific products made it on to specific trucks,” says Steckel. “By offering this service our distributor became a more valued partner in the success of our business.”
Steckel echoed Phillips’ and Katz’s feeling that distributors have heeded the call to become a valued “business consultant” to their pest control clients. He points to an in-depth meeting with his distributor where they asked what were Varment Guard’s five growth areas and how could they lend support to move ahead in those areas. They also asked what the biggest pain point was for the company and when it was identified helped create a solution to remedy the issue.
The Road Ahead.
When asked what the future will bring, pest management professionals interviewed by PCT agreed that industry consolidation and technology will present both a challenge and an opportunity.
Consolidation of pest management companies, basic manufacturers and distributors has been part of the landscape for decades but a recent uptick had PMPs responding to the survey concerned. Fifty-two percent indicated that consolidation at the distributor level is a concern — up two percent from 2012.
For Varment Guard’s Steckel, consolidation was a major concern when its long-time distributor Southern Mill Creek Products was acquired by Univar.
“We had a very close personal relationship with Southern Mill Creek that went back decades and we had some apprehension on how we would fit into a much larger outfit like Univar,” says Steckel. “We didn’t want to become just a number.”
Steckel says their concerns were alleviated as Varment Guard’s regular points of contact in Univar’s branches stayed on and the personal relationships and knowledge of their business remained in place.
“The landscape has changed for the entire industry and what has happened with distributors mirrors what has taken place with pest management firms,” says Western’s Katz, who was acquired by global pest and interior plant care behemoth Rentokil in 2012. “You have mega-size distributors who deal in volume and regional players who have built their businesses on personal relationships.”
Katz feels both business models will continue to serve the industry well as long as regional distributors continue to innovate and develop service niches that separate them from the competition.
Northwest’s Phillips says the consolidation trend works both ways as pest control companies are sold or acquired so is their distributor business.
Phillips says another challenge for distributors is to maximize the use of technology for the benefit of customers without losing the benefit of the personal relationships they have developed with clients.
“Real-time inventory tracking and ordering data and the ability to order online are among the tools distributors can offer to PMPs to make their life easier and their operations more efficient,” says Phillips.
Western’s Katz concurs that better use of technology from data analysis to improved ordering processes will allow distributors to reduce costs and hopefully pass along savings to clients.
Another challenge looming on the horizon for distributors is the growing demand to purchase pest control products online outside of the mainstream distribution system. Offering products claiming to be the same as those used by professionals these sites often offer product at lower prices and this appeals to the small solo or one- or two-person operations with tight budgets.
“Mainstream distributors are in the ‘chain of custody’ when it comes to selling and stewarding professional products and are there to back up PMPs should a problem arise with a product,” says Steckel. “Distributors provide the professional training and expertise required to apply the products they sell, but in the online market that does not exist.”
Steckel is concerned that unlicensed or very small operators will buy simply based on price and lacking the proper training and support increase the likelihood of a misapplication — something mainstream distributors and licensed PMPs do not want to see. “The established distributor community needs to be part of the conversation when it comes to ensuring that professional-grade products are not sold online without verification of who they are being sold to,” says Steckel. “It is not only a threat to their business but to the business of their customers and industry as a whole.”
About the Survey
Where noted, findings cited throughout this report are based on a survey sponsored by PCT and executed by Readex Research, a nationally recognized independent research company located in Stillwater, Minn.
Data was collected via an online survey from March 4-13, 2014. The survey sample of 3,487 was selected in systematic fashion by PCT and Readex Research from PCT’s emailable circulation database.
The survey was closed for tabulation with 346 usable responses , representing a 10 percent response rate of those PMPs who were contacted to participate in the survey.
The margin of error for percentages based on 346 usable responses is 5 percent at the 95 percent confidence level. The margin of error for percentages based on smaller sample sizes will be larger.
The author is a partner of B Communications, an integrated communications/marketing firm. Email him at firstname.lastname@example.org.
Oldham Chemicals Offers PMPs Customized Application Equipment
With 14 service centers strategically located throughout the Southeast, Oldham Chemicals Co. offers a full line of customized application equipment to meet virtually any PMP’s equipment needs.
Bobby Bledsoe, a 28-year employee of the family-owned business, recently highlighted some of the company’s most popular rigs in a video shot at NPMA PestWorld in Orlando, Fla. To view the video, visit www.pctonline.com/Oldham-50-gallon-rig.aspx. For more information call 800/888-5502 and ask for the Equipment Department.
Oldham Chemicals, founded by Millard and Ada Oldham in 1966, has been serving the pest management industry for nearly 50 years. The company has service centers in Knoxville, Nashville and Memphis, Tenn., along with additional locations in Birmingham and Mobile, Ala.; Baton Rouge, Lafayette and Metairie, La.; Little Rock, Ark.; Martinez, Ga.; Louisville, Ky.; Jackson, Miss.; Springfield, Mo.; and its newest location in St. Louis, Mo.
The company’s motto “Everything for the Pest Control Industry” remains the foundation of the family-owned business, which features the active participation of Millard and Ada’s daughter, Marsha Reeves, and her husband Tommy Reeves, who manage the day-to-day operations of the business.
To learn more about Oldham Chemicals Co., visit www.oldhamchem.com.
Univar launches ProTraining at PestWorld
Univar Environmental Sciences evolved its educational offering with the introduction of ProTraining at PestWorld 2014 in Orlando, Fla.
Univar said as part of its commitment to raising the industry through education, the firm updated and enhanced its online learning program, Master Technician, with new, interactive and engaging courses under the ProTraining name. In addition to the new online courses, ProTraining combines Univar’s vast range of educational resources, experienced sales professionals and in-person seminars and classes to create a complete learning experience for pest management professionals (PMPs).
To date, ProTraining offers 58 online courses that are available 24/7 and are approved for CEU credits in 37 states and 2 Canadian provinces. Of these courses, five of them have updated content from Univar’s on-staff, Board Certified Entomologist and have been completely recreated to include compelling videos, animation, narration, audio and interactive section reviews, creating an engaging learning experience.
“We’re never satisfied with our success. That’s why we will constantly take advantage of the latest technologies and update our educational offering and online courses to present the most current and relevant information to PMPs across the country. By helping our customers succeed, we raise the industry for us all,” commented Karl J. Kisner, Vice President Marketing — Environmental Sciences & Agriculture.
For more information, visit www.univares.com
Target Names New EVP
Since August, Target Specialty Products, Santa Fe Springs, Calif. , has been led by Todd Ferguson.
Ferguson, the firm’s new executive vice president, earned his B.A. degree with double majors in economics and the philosophy of law from the University of Rochester, N.Y. After attending the university for four years on a Naval ROTC scholarship, he graduated cum laude in May of 1989 with honors in both majors. While attending, he also earned a certificate in business administration with an emphasis in finance and accounting from the Simon Graduate School of Business.
After serving and successfully completing several tours of duty in the Northern Persian Gulf in support of Operations Desert Shield, Desert Storm, and Enduring Freedom, Ferguson was honorably discharged from the Navy and the Naval Reserves in 2011. After his tour of active duty military service in 1993, he was selected to enter a management development program for pest management, resulting in a career in residential and commercial pest and termite control operations.
Throughout his career, Ferguson served in a variety of senior sales and management roles for well-known companies. He has a proven success record in improving customer retention, process improvements, training and development, relationship fostering and improved productivity and reduced cost of goods, said Sylvia Kenmuir, BCE, Target’s technical training and strategic marketing director.
Distributors Speak Out
PCT reached out to distributors serving the structural pest management industry asking their views on current trends, company news and more. Here’s a sample of what they said. See more responses online at www.pctonline.com.
How has the role of the distributor changed in the last five years? How will it continue to evolve in the next five years?
Steve Racioppe, Geotech Supply: We are hearing many distributors are carrying less and less inventory and trying to fill orders from satellite locations. We also have seen the advent of the Internet retailers. The reality is a PMP can go on line and pretty much purchase everything they need. We will need to continue to offer value to offset the Internet folks. That includes counsel, advice, product on hand, etc. We are also hearing continued complaints from PMPs about the “fixed price” strategy with agency products. Some PMPs are on “a program” to help offset the price, many are not and they are not happy about that. Agency products are losing share in our marketplace.
How has Target benefitted from joining forces with Ehrlich Distribution? Can you comment on how that transition has gone?
Sylvia Kenmuir BCE, Technical Training and Strategic Marketing Director: Tremendous energy and momentum has formed within our brand and among our customers and colleagues in recent months as we continue to integrate best practices from two industry icons.
Initially, Target was a regional distributor that was able to only service the West and Central regions. Joining forces with Ehrlich allows us to be a national distributor, and we are able to service all states from strategically located offices across the nation.
As a national distributor, our brand of strong customer support in technical training and regulatory issues will be expanded this year to all regions.
Combining the competitive advantages of both distributors has allowed Target to be an all-encompassing distributor — able to serve all of our customers’ needs. As a trusted brand for many decades, we are excited about the customer-centric improvements we will be bringing to the industry in the future! Soon, our advertising will feature our promise that, when it comes to services important to our customers, "We're just getting started!”
How has e-commerce changed the way you do business?
Shawn Robinson, Precision Chemical & Equipment: E-commerce has allowed Precision Chemical & Equipment to reach more customers than ever before with less sales force. It has given customers a resource to shop pricing and obtain large amounts of information to educate themselves on products, insects, treatment options, etc. Because of e-commerce, Precision Chemical has been able to launch our new equipment division, Precision Sprayers, and have an immediate following on social media as well as online sales worldwide. It has also allowed customers to shop for that hard-to-get product, that specific piece of equipment or part.
How have recent pest trends (e.g., bed bugs, decline in termite work) impacted distribution?
Karl Kisner, Univar: We certainly see occasional shifts in products due to increases or decreases in pest activity. The key as a distributor is to make sure we are always prepared by having products on hand to meet these changes and to look for the new solutions that will help our customers as their needs change. With all the encasements we sell, we sometimes look like Bed Bath and Beyond–this came as a result of bed bugs.
Based on feedback from PMPs, what is most important to them when selecting a distributor?
Karen Furgiuele, Gardex Chemicals: The one item that is most critical to the Canadian PMP seems to be availability, or on-hand inventory. Whether they walk-in, or place an order, they need product on hand and at that time. Although technical service is very important, with the limited amount of products sold into the market PMPs are technically competent.
How has the role of the distributor changed in the last five years? How will it continue to evolve in the next five years?
Tom Forshaw IV, Forshaw Distribution: Like many industries, we have seen distributor consolidation in the pest management industry, and as a result, the number of distributors supplying the industry has been on the decline. That means the remaining distributors have more available customers and the PMPs have fewer suppliers to choose from. Those changes offer both challenges and opportunities. PMPs want great service and ease of conducting business, all at a good price. We want PMPs to want to buy from Forshaw, and that has to be earned.