[Technology Spotlight] Against The Grain

It’s a challenging business environment for basic manufacturers serving the structural pest control industry. The cost of developing new active ingredients has gone through the roof; the termite market has been down in recent years; and the influx of post-patent insecticides is placing significant pricing pressure on branded products.

In response to these market trends, Bayer Environmental Science is investing in what it calls "proximity innovation" whereby the company regularly invites PCOs to its 280-acre research facility in Clayton, N.C., to pick their brains. "We bring as many customers as we can to Clayton to talk to them about our product development efforts," says Steve Burt, managing director, Bayer ES. "They’re our partners in helping us build better products for the future."

One such product — Premise Granules — received EPA approval in July 2006. Premise Granules is the newest example of how Bayer ES is approaching the termite market, spinning off a variety of product formulations from a single active ingredient — imidacloprid — to capitalize on new service opportunities.

BUSINESS BENEFITS. Bayer says that Premise Granules can be an effective tool to help PCOs close more sales, save on labor costs and secure more annual renewals. If termites are found during the initial inspection, a salesperson (if certified) can immediately start addressing the problem with a targeted spot treatment, with the full treatment scheduled for a later date.

This is particularly important during peak termite season when sales are frequently lost or delayed due the inability of companies to treat homes in a timely fashion that have been scheduled for service. "It gives you the opportunity to close the sales at the time of the initial sales call," says Dan Meek, termite manager, Bayer ES. "That’s a powerful competitive advantage."

Premise Granules also can provide an "add-on" service opportunity for PCOs, as well as the ability to expand their annual renewal business, according to Bayer ES. "We have PCOs telling us that they plan to offer Premise Granules as an upgrade to their standard annual renewal service," Meek says. "Instead of just an annual inspection — the customers receive the inspection and an application of Premise Granules. It’s another way for the PMP to generate additional income, while providing a valuable service to their customers."

Meek adds that maintaining renewal revenue is one of the biggest issues facing pest management professionals today. PCOs have to address customers’ questions about the need for an annual inspection. After two or three years of clean inspections, many customers will begin to question the renewal cost. By offering a Premise Granules application along with the annual inspection, pest management professionals are offering additional service and demonstrating the value of having a professional monitor and protect the property, Bayer ES reports.

Paul Hardy, Orkin senior technical director, said his company plans to use the new product in a number of ways to help close termite sales and enhance customer retention. "First, we plan to use it to maintain our (termite renewal) customer base; second, as an early start tool for new termite sales; and third, on spot treatments," he said.

"After three or four years of seeing no termites following a liquid treatment our customers don’t necessarily see the value of paying for an annual renewal, so we’re planning to offer a perimeter application using granules as a value-added service to encourage them to renew. We are testing it in several states and we think it will help improve our retention rate on termite renewals."

Orkin also has added Premise Granules to its "swarm kit," according to Hardy. "We get a lot of calls from customers who have swarms around the house in tomato stakes, fence posts and other locations outside the home," he said. "It’s another tool we can use as an additional treatment when re-treating an account following a swarm."

Meek says applying Premise Granules around the perimeter of a home also provides the PCO with another opportunity to interact with the customer, further strengthening the client/customer relationship. "It’s a door opener," he says. "I’ve had a lot of PMPs tell me that their business has evolved to where they don’t see Mrs. Jones like they used to. It’s great to be able to go back into the house and explain a new service, then go out and apply the granules around her house, so she sees the service being performed. It’s a value-added benefit for the customer."

To learn more about Premise Granules, visit www.bayerprocentral.com.