Can you say, “Cha-ching?”
For the first time in about eight years, the termite season ended on a high note. Forty-five percent of pest management professionals expect termite revenue to increase this year over last, according to the 2012 PCT State of the Industry survey.
Some companies even posted record-breaking revenue. Here’s why:
Termites made the phones ring. “Swarmers just went crazy down here in Houston,” reported Scott McGrath, president of McGrath Pest Control. The season was “phenomenal” with termite revenue more than doubling from last year. “We had record-breaking months of business.”
PMPs in Georgia and North Carolina reported getting swarm calls. Business was up more than 13 percent for Spencer Pest Services in Roswell, Ga., and more than 20 percent for Triangle Pest Control near Raleigh, N.C. “We have seen a strong resurgence in termite calls and we are grateful to see the trend reverse,” said Triangle Pest Control President Donnie Shelton.
Robust termite revenue helped Arrow Exterminators in Atlanta close its “best year in the history of the company,” said Chief Marketing and Strategy Officer Cindy Mannes. All service revenue increased, but termite sales were still strong in July, which “isn’t normal for us.”
Cleveland Dixon, president of Holiday Termite & Pest Control in Springfield, Va., saw a significant increase in termite activity in his region. “This year it was a major turnaround,” with homeowners and technicians readily finding termite damage and tubing in and near structures during regular service visits.
“Everybody’s seeing an increase in termite activity,” said Dixon, who is president of the Northern Virginia Pest Management Association.
PMPs — 39 percent according to PCT’s State of the Industry survey — believe weather conditions helped their business.
“We had no winter to speak of here in the south, so all bugs have been bad,” said Sheri Spencer Bachman, president of Spencer Pest Services.
In Texas, a warm winter and early spring rains made for a season off the charts, said McGrath. “Last year we had swarms, but nothing like this year. After the rain you could see the swarmers flying everywhere.”
“I don’t think the termite colonies ever went away, explained Paul Hardy, senior technical director at Orkin, which saw termite revenue increase four percent over. During an extended drought, termites cared for the colony. A warmer winter and higher humidity resulted in more egg production, more food requirements and ultimately more swarms.
Unfortunately, the weather didn’t cooperate everywhere. Ronald Durall, owner of RID Pest Control in Blair, Okla., said this spring saw more rain, but “termites are still slow.” Now in the dry season, “it’s so terrible I think it’s going to cut the rest of the termite jobs back for the rest of the year.”
Customers willing to spend. Unlike past years, customers were ready to spend money on termite treatments. This loosening of purse strings was a boon to Gregory Pest Solutions’ commercial termite business, which jumped 35 percent by the end of June.
“We haven’t seen increases in termite numbers like that since I couldn’t tell you when,” said President Ben Walker in Greenville, S.C. The company noticed revenue increasing last October.
Residential customers also were more willing to invest in termite protection. “We’re getting a lot more leads this year than we have in the last several years,” said Walker. Revenue was flat for the past seven years, “but this year it’s really taken off and taken a nice step forward.”
Homeowners who saw winged insects indoors or flying out of flower beds were scared enough to spot treat or have entire structures done, said McGrath. “It tells me the economy is doing a little better, that people have a little more discretionary income to do a termite treatment.”
Josh Jones, president of Customer Oriented Pest Services — C.O.P.S. — in Enterprise, Ala., said wood infestation reports for real estate closings jumped, resulting in 10 percent more treatments.
What paid off? Orkin made gains by cross-selling existing pest customers on its termite bait program, said Hardy. This program also gave customers with expiring liquid termite protection agreements another control option.
Massey Services in Orlando offered customers nearing the end of their 10-year termite warranty a reduced cost for preventive retreatment. “We’re doing a pretty darn good job of convincing the customer to take that treatment and retain that termite protection,” said Vice President Adam Jones, director of quality assurance. Renewal revenue jump nearly seven percent over last year.
PCT’s State of the Industry survey found 54 percent of companies have a termite service cancellation rate of 0 to 5 percent; and 25 percent of companies have cancellations ranging from 6 to 10 percent.
C.O.P.S.’ Jones, whose renewal revenue remained steady, said yard signs “stirred up free inspections” in neighborhoods where crews were working. Even if termites weren’t found, technicians had an opportunity to sell other services.
At Heron Lawn & Pest Control in Apopka, Fla., termite revenue is up 20 percent due to an aggressive sales push and weekly training, said Service Director Steve Okros. More confident in their termite knowledge, technicians now inspect for pests and termites at every stop and sell more jobs. His goal: double the number of termite jobs in 2013. “I know we can do it. It’s just a matter of asking for it,” he said.
Spencer Pest Services had most termite growth come from a new service that bundles bait-based termite protection with pest control. The program, which requires a small down payment with monthly installments, was “very well received by both new customers and our existing customer base,” said Bachman.
An increasing number of pest management companies — 50 percent — now offer a “universal” termite and pest control service managed under one umbrella.
Technology sets firms apart. In 2011, Arrow Exterminators converted all its termite customers to a bait system requiring annual monitoring. “That technology is making a tremendous difference in our business,” said Mannes. The company actively markets the bait as part of its STEPS Total Protection System and “we’re seeing customers start to ask for it.”
Heron Lawn & Pest Control moved to a high-efficiency, non-repellent liquid treatment that requires less water for mixing and less labor for trenching and drilling.
Holiday Termite & Pest Control chose a non-repellent liquid noted for its reduced-risk environmental profile. “In a competitive market, you really need to differentiate yourself,” said Dixon. Clients like the “green” approach and how technicians explain it using their iPads, which they carry to record their work.
Over the past three years, 29 percent of PMPs increased their investment in termite products, equipment and marketing, found the PCT State of the Industry report. Looking forward, 41 percent of PMPs expect to spend more in these areas.
Focused on selling value. Because the industry has become “so darn effective at termite management,” customers get a false sense of security and may not choose to retain termite protection, said Massey’s Jones. This means PMPs have to do “a much better job of explaining the process.”
You have to sell customers on the value of the service, what they get from the treatment and the consequences of not having treatment done, added McGrath.
Clients who evaluate multiple treatment proposals learn most PMPs use similar products and application techniques, and offer comparable warranties and price. To stand out from the crowd, McGrath learned “to sell myself and my company as much as the termite treatment.” Customers particularly like the reviews and testimonials posted on his website and Angie’s List. “It shows I’m not a fly-by-night company and I’m not blowing smoke,” he said.
Still, it’s frustrating having to compete with “squirrels,” those unlicensed operators or companies charging less than the cost of chemicals to do a job, said Durall.
Fingers crossed for 2013. One good termite year in the past eight does not signal a new norm, but PMPs are hopeful the trend continues.
Walker plans to be “ready next spring to handle a 25 to 30 percent increase in the business,” but admitted “you just don’t know” what will happen.
Invasive termite species moving through parts of the deep South may pose treatment challenges. Not only will pest management professionals need to think differently to manage populations but they “could be potentially devastating to the market in terms of damage,” said Massey’s Jones.
Similar weather patterns, should they persist, may cause continued termite, as well as ant, carpenter bee, flea and tick activity, said Hardy, who had more bat calls this year “than I think I’ve ever had.”
The Washington, D.C., beltway never lacks for pests, said Dixon. As for termites, “we’re just really glad to see them here.”
The author is a frequent contributor to PCT magazine. She can be reached at email@example.com.