In the movie “Tin Cup,” Roy McAvoy, the character played by Kevin Costner, says, “I’d hit it again because that shot was a defining moment. And when a defining moment comes along, you define the moment, or the moment defines you.”
At the National Pest Management Association NPMA’s PestWorld conference in Boston last year, three industry leaders shared powerful insights about some of their defining moments, which helped illuminate new pathways to positive growth and continued business success.
Bobby Jenkins, president of ABC Home & Commercial Services, based in Austin, Texas, shared the story of how he changed his company from a conventional pest management firm to today’s home and commercial service company offering a wide variety of services.
According to Jenkins, ABC Pest Control grew an average of 16 percent each year from 1983 to 1997. Concerned that the company had reached the point of limited growth opportunities, Jenkins hired John Beck, an industry consultant, to analyze the company’s revenues in relation to the Austin market to determine future growth potential.
According to Beck, using a ratio of revenue to population, if the result is more than $2 per person, that company is considered dominant in the market and prospects for future growth are limited. The result of the Austin office’s revenue to population ratio equaled $6.52 per person.
“On one hand I was really proud that we were a dominant pest management company, but on the other hand we knew that 16-percent growth was not going to be sustainable,” says Jenkins.
Jenkins considered two options. He could sell the same services to more people by opening up branches in new markets or he could add revenue by offering more services to his current customers.
“The thought of not being able to grow based on the population of my market was very disconcerting, and that’s where I can trace back to one of the defining moments for me. I realized that if all I do is pest management, I’m only going to grow at a flat level,” Jenkins says. “I thought about other services we could offer that would capitalize on our customer relationships in order to continue generating the growth percentages of the past, and lawn care seemed like a natural fit.”
Jenkins changed the company name to ABC Pest & Lawn Services and began offering fertilization and disease, weed and insect control lawn services. The expansion had some unexpected results.
“Sometimes I think we are going down one path, but then I get pulled down another. I thought I had a vision of what that path would be, but then we had so many calls from customers asking us to mow their lawns,” Jenkins says. “When you have enough people who want mowing services, you find a way to offer that.”
Once they offered mowing services, customers began asking about landscaping services and irrigation systems, so they began offering those services as well.
“We are doing all this because we are listening to our customers and they were asking for these services,” says Jenkins. “That’s what diversification is — it’s allowing the opportunity for growth and it’s also a very efficient way to grow by offering multiple services to the same customer.”
In 2005, Jenkins met Scott Esler, a home improvement specialist who was interested in buying a home improvement company. Jenkins suggested he join ABC and together they would leverage the company’s customer base so together they could build business faster than Esler would have been able to if he bought the franchise operation. As such, heating and air conditioning, plumbing and electrical services became another path to growth.
In 2009, Jenkins realized another defining moment.
“We had become a service company, so we changed our name to ABC Home & Commercial Services,” Jenkins says. “As a service company, it becomes about what else we can do to add value to the relationships we have with customers so we can be of more service to them.”
Today, pest management is still at the company’s foundation, however each year Jenkins has extended more services to customers. He added a tree division in 2010, pool services the following year and security systems in 2012.
“For us, the Holy Grail is when our customers need something done, we want them to think to check with us first to see if we offer that particular service,” Jenkins says. “We want to be their vendor of choice.”
Shooting for the Stars.
Stuart Aust, president and CEO of Bug Doctor Termite & Pest Control/Bird Doctor Nationwide and its various divisions, walked into a small deli in Palisades Park, N.J., on a cold call more than 20 years ago and walked out with the company’s first commercial pest control account. Since its establishment in 1992, Bug Doctor Termite & Pest Control, based in Paramus, N.J., has grown into a multi-million dollar company with five divisions that service major commercial venues such as Yankee Stadium, Rockefeller Center and Madison Square Garden.
Diversification has been a key ingredient in the company’s growth. However, a clear defining moment was when Aust decided to move away from the small, less-profitable accounts he was servicing to target, sell and service large commercial operations. He says he changed his business strategy for several reasons.
It’s a niche business where there is less competition.
“We tend to see the same three to five companies out there, which is nice. They get some accounts, we get some, and it all works out,” Aust says. “Plus, there’s less chance of these accounts canceling service for a cheaper price. No one is going to walk in off the street and for $10 or $20 less and is going to get that job. If you are doing a good job and they like you, you are going to stay at that account.”
It instills pride in the company’s technicians and staff.
“When we started in 1992, we sold a lot of housing authority jobs because they were low bid and easy to get into. However, I’ll never forget when our technician told me he was taken around for service by an armed guard,” Aust says. “I’d much rather a technician walk into Yankee Stadium, Rockefeller Center or one of the corporations we service today.”
It means less technician time on the road.
“Some accounts we are there for the whole day, which means we are not moving those trucks,” Aust says. “If your technicians are driving for a few hours a day, that’s a lot of lost time that is not producing revenue.”
In addition, it’s more profitable and can lead to other upscale accounts.
“When a facility or property manager change jobs or venues, oftentimes they will bring us along,” Aust says. “Sometimes management will refer us; and in the case of Yankee Stadium, we service several of the executives’ homes as well.”
Recently, Aust promoted an employee to the position of business development coordinator to prospect the company’s top 100 target accounts.
“This is a big step for us,” Aust says. “The director of national sales and I have a list of our top targeted accounts, and she will be spending four or five hours a day on the phone with the companies and venues on that list.”
As one might expect, with a change in target markets comes new challenges to address, according to Aust. New service systems and protocols had to be established. And Aust says they have become extremely discerning about who they hire.
“We may spend 12 to 15 hours interviewing potential employees,” he says. “We want to make sure we are hiring true professionals and that they are going to fit in with our company culture.”
Finally, while Aust says the Bug Doctor still services many of the smaller commercial operations that helped him get his start, he keeps a close eye on their profitability.
“We have a project going on right now where if an account is not at a certain dollar volume, we will try to bring them up to that volume,” Aust says. “If that doesn’t work, we’ll cancel that account.”
In addition, servicing such high-profile accounts has increased the importance of quality assurance and quality control. As such, Aust developed a program called “Code Blue,” in an effort to intercept a possible account cancellation.
“We want our technicians to be honest and straightforward, and we are not going to penalize them if they see a competitor vehicle at one of their sites or see a proposal on the manager’s desk,” Aust says. “We encourage them to raise their hand if there is a problem so we can help because we want to protect our accounts.”
In fact, Aust also keeps a personal Code Blue list.
“If one of my friends calls and says there’s an issue, I am going to see that through,” he says.
The Magic of Metrics.
According to Michael Botha, president of Sandwich Isle Pest Solutions, Pearl City, Hawaii, he used to feel that managing his business felt like he was on a never-ending roller coaster ride. But based on the fact that he started his company with $10,000, using 75 percent of that to buy a truck, and now he has 65 employees and nearly $6 million in business, he seems to have stepped off that ride and jumped onto one that only goes up.
“If you look at the numbers since I first started, the highest growth I had in a single year was 225 percent — and the worst was minus 12 percent,” Botha says. “There were a few years when we nearly went out of business.”
According to Botha, one of his defining moments was realizing that others in the industry had been on the roller coaster ride, too, but they successfully navigated the ride. Most importantly, they were willing to share what they learned along the way to help his company succeed.
Thanks to networking and learning from his peers and mentors, he decided he must implement better measurement metrics and hold everyone accountable on a daily basis. He developed the company’s “Accountability Metrics,” which are tools to measure everything the company does. They measure daily performance benchmarks and track progress, they measure the past and forecast the future, and they keep everyone on track on a daily basis.
“It’s so important to track everything on a daily basis so we stay focused,” Botha says. “If we look at the numbers after two weeks have passed, it’s already too late to save that month.”
Botha shares all the reports with everyone, every day, so the staff can see how they are doing relative to their co-workers, and that puts on just enough pressure to encourage them to work harder and smarter. His Required Performance Outcomes (RPO) has had quite an impact.
The RPO is a daily report for salespeople, with a daily summary of all sales outcomes including sales numbers, how many jobs they sold and their dollar amounts, how many leads and their closure percentage, and the number of proposals and dollar amounts.
“Everyone knows the salesman who is not selling is saying that he doesn’t get enough leads or the leads weren’t qualified,” Botha says. “This way everyone gets to see the leads and if there is an imbalance we can fix it quickly.”
The report also compares sales numbers against their monthly forecast each day. Botha says this helps put a little pressure in the right places for those that are falling behind. They see they need to work harder and smarter than the day before to catch up. However, Botha and his general manager are spread fairly thin and don’t have a great deal of time to spend with the salespeople.
“One of the failures I think we had was we never focused enough on our salespeople who were failing. The ones that had been winning constantly won. But the ones that needed help, we just weren’t there for them,” Botha says. “What the daily RPO does for me is it makes it easy to identify who needs help and I can go through their proposals to help them find a way to close those deals.”
Plus, since salespeople are naturally competitive, when they see the report everyday and are not in the position they expected, it motivates them and helps them focus on improving.
“The first month we did this, every single salesperson made quota — for the first time in a year,” Botha says. “At first they were shocked that we shared everyone’s numbers, but it really works for us.”
Botha also uses a daily production forecast and requires that all forecasting must be complete by 4 p.m. for the following day. The forecast must meet the daily production quota for all employees, including service employees and managers. That means that every manager has to be engaged in sales or productivity. They don’t necessarily have to be doing the work but they have to be engaged and supporting or coaching a technician or salesperson.
“What we found was some of our managers were doing way more than what was expected and some were doing way less than was expected and it wasn’t fair. Now they are all held to the same standard,” says Botha. “What we are trying to do is grow a culture that is focused on performance, not excuses.”
Another tool Botha uses to gauge business performance is a formula that calculates the daily production per employee. Looking at the PCT Top 100 List, he divided several top-performing firms’ revenues by the number of employees and compared his own results.
When he reviewed the numbers, he found “Terminix (had) the highest annual revenue by employee per day standard at $543.05. When you look at Sandwich Isle, we were at $314.42. When you look at the difference, it’s staggering. Terminix is making $230 more per employee per day,” Botha says. “This is where I felt like I was slapped in the face because I thought we were doing well but by looking at the leaders I realized we weren’t. Our goal is to be at $500 and that’s a big jump, but we are taking little steps and we’ve made some progress.”
Botha also credits Larry Hanks, vice president of operations, Rose Pest Solutions, a mentor who helped him off the rollercoaster by introducing him to what Hanks calls the Rule of 23. “Basically you combine your net profit and growth percentage and it should equal 23 percent. So now our goal is 10 percent profit and 13 percent growth,” Botha says.
In the past, Botha says he would have been happy with a goal of 10 percent profit and 5 percent growth, but compared to his new benchmark of 23 percent, the business would not be growing and the bad ride would continue.
“It’s made me focus not just on profit and not just on growth but on the two of them combined,” says Botha. “Since we’ve instituted this, for the first time in 14 years, every single month we have been consistently profitable and we’ve grown. Now we have charted a course and we are sticking to it.”
According to Botha, today you can’t just work hard and achieve success. Working hard is only the starting point; people need to work smart, constantly improve and hold themselves accountable to move up to the next level. He attributes his success to those factors, but more importantly, to what he learned from networking with industry leaders.
“The greatest thing I’ve learned is how important it is to learn from others in this business. It’s all been done before, and people have figured it out,” says Botha. “If you just ask, they will give you the right answers.”
For most of those in business today, success doesn’t just happen. The hard work and determination that may have ensured success in the past may not be enough in the current business climate. It takes a commitment to planning, acumen, continuous improvement and an ability to recognize and capitalize on defining moments that come your way.
The author is a Milwaukee-based freelance writer. She can be reached at email@example.com.