Got Game?

Features - COVER STORY

If you want to play in the big leagues and service stadiums, there’s often a cost involved that has nothing to do with treating for pests. Can you afford to foot the bill for sponsorships and season tickets? PCT talked to pest management firms that are winning at these accounts.

November 14, 2016

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The reeling scoreboard flashes sponsors’ names, their logos lighting up next to the numbers everyone in the stadium is watching. Before the first pitch, an announcer lets the crowd know that your pest control company services the stadium. Plus, you get to wind up and toss that first ball of the game. There’s a cluster of prime seats with your name on it.

Meanwhile, your technicians are behind the scenes. They’re making sure a rogue bird doesn’t invade a swanky private suite — that rodents don’t start snacking at the concession stands, and so much more.

Sports venues are attractive, premium exposure accounts. Sponsorship! Tickets! Vendor perks! Visibility!

But the tickets and billboards aren’t freebies. They come at a significant marketing cost, and keeping arena clients happy is an all-hands-on-deck commitment. The stakes are high in the business of servicing high-touch, high-profile stadiums with zero pest tolerance and millions of fans.

No fouls allowed.

“Their willingness to have any pest pressure is like being on (a) razor’s edge,” says Scott Steckel, vice president of operations at Varment Guard/ProGuard Commercial based in Columbus, Ohio.

In some cases, the special service earns little monetary reward because it’s pay to play. For major arenas, Steckel comments, “You’re never going to make more money (than you spend on advertising). You are not going to win the deal. It’s not built that way.”

But of course no two arena account packages are the same.

Buying sponsorships is expected by some franchises. Others don’t require vendors to pay for advertising in order to secure contracts. It all depends. What’s true no matter what is that pest control operators who want to explore this niche must meet stringent service demands and pay for potential arena advertising expenses.

“We service some arenas where we are sponsors, and we are not at others,” says Stuart Aust, president and CEO, Bug Doctor Nationwide, Paramus, N.J.

Bug Doctor won the New York Yankees account 15 years ago from a cold call. “We have had situations where arenas want us to service their venue and they refer to it as ‘pay to play,’ but we will not provide service if we are not making money,” Aust says.

So, is it worth pursuing arena accounts? What’s the real cost, the branding benefit and the risk involved?

What is “winning” anyway?

WHAT COMES FIRST? Steckel says securing arena accounts is like tipping dominoes. Knock over one and then the next falls, followed by others. “You don’t get the high-profile locations early on in your commercial career,” he says.

VarmentGuard/ProGuard’s first stadium was the Dayton Dragons minor league baseball team. “They were very much a good marketing avenue for us,” Steckel says, adding that the company broke even with earnings vs. advertising spent there. Buying a sponsorship was not required.

In fact, this last year Steckel had to dial back the company’s commitment at the stadium because a key employee left. That face-time/game-time is a must to maximize the investment, Steckel explains. “I need to have someone who is emotionally ‘all in’ and will go to every home game, be away from their family from 7 to 10 p.m., and who has that skill set of going to events and bringing in new clients and enjoying the relationship development,” he relates.

The seats represent business opportunity — but only if you’re working them.

The Dayton Dragons remain an important account for Steckel, even without the advertising investment. When VarmentGuard can “staff seats” and take full advantage of the sponsorship package, it will boost its marketing investment. For now, the company services the stadium just as always.

But not all arena accounts offer a choice of whether or not to advertise.

“If you go to the big leagues, the big stadiums, (advertising) is a requirement,” Steckel relates. “They will come to you first for advertising, and only after you are advertising will they give you an option to take over the incoming position to do pest control.” At least, that’s Steckel’s experience in the sports arena.

First came the tickets. Then came invitations to bid.

VarmentGuard services the Columbus Blue Jackets NHL team. After purchasing some seats and attending games with attractive potential clients as a business-building activity, arena managers started to take notice. Sports venues want to fill seats with season ticketholders. “They started to see we were bringing people who were getting season tickets with us in our area because we were developing this camaraderie — a circle of season ticket holders,” Steckel relates.

Today, VarmentGuard/ProGuard services the Blue Jackets arena and is a sponsor. The company also provides pest control and is a sponsor at the Cleveland Browns football stadium and Columbus Crew soccer arena, among several others.

Steckel figures the cost of sponsorships vs. earnings on service at a major complex with a well-known franchise is roughly 4-to-1. So, using round numbers as an example, if the company makes $25,000 it will invest $100,000 in marketing, advertising, events, food — the total package. “It’s absolutely not break even,” Steckel says simply.

He figures smaller venues are a 1-to-1 spend vs. earn. So, he’s breaking even while benefiting from brand visibility.

To Steckel, the exposure is generally worth paying more. He says these dollars fall into the advertising/marketing budget. “We have done smaller venues before where they’re break-even and we’re like, ‘What did we get from that?’ We look at the business growth and market segment, and we think, ‘Hmmm...that didn’t get us much.”

When you play in the big leagues, the returns can be far greater.

The real winnings come not just through branding, but also business development with attractive commercial clients. Steckel is not using the “free” tickets as employee appreciation prizes. Those hot seats serve as invitations for serious relationship building.

“If you bring a client that owns a chain of 20 pizza stores and they bring on all of their franchisees (for your service) and all of a sudden — boom. Now I’m paying for that event,” Steckel says.

That’s why Aust calls the access to tickets and special promotions at stadiums a “door opener.” “We look at it as an investment with key clients,” he says, relating how he entertained the executive of a New York City property management firm with 450-plus sites. “I invited him and his wife to an event, and he came. I was shocked. Now we have become friends, and before I would have been lucky if he had taken the time to say hello to me.”

It’s not the tickets that cemented the relationship — it’s the time together, and the opportunity to provide an entertaining venue for business development, Aust says. Aust relates how one client’s son attended a Yankees’ game 10 years ago as a guest. “He said to me, ‘My son still has the baseball bat from the game, and talks about what a great day that was.’” To Aust, that’s winning.

THE COST OF VISIBILITY. Aust doesn’t buy into pay-to-play with arena accounts. In fact, his company has been called to manage emergency pest issues even when another company holds the sponsorship and contract. “When they have problems, all bets are off,” he says, noting that a robust service package is a must, as is 24/7 response and total accountability.

Negotiations can be tough for these accounts. Steckel typically finds that arenas underestimate technician time. And Aust has turned down accounts that don’t want to pay for the level of service his company prescribes for such high-maintenance facilities. (Literally hundreds of service tickets may be generated in a month at one location.)

Then, there’s the paperwork and electronic digital reporting, Aust points out. That includes various audit reports for pest and rodent sightings. It means maintaining logbooks that are kept on site and having pertinent licensing. The list goes on and on.

Aust and his team at Bug Doctor Nationwide are accustomed to managing major, high-profile accounts including Madison Square Garden, the United Nations and Metropolitan Museum of Art. “You need a game plan,” he says.

That plan isn’t a budget approach to pest control. If it is, well, the PCO will really lose.

Russ Ives, president at Rose Pest Solutions in Troy, Mich., will not barter service for advertising/arena presence. “But we are doing the service work and also buying advertising,” he says. “You have to make sure it makes sense from an advertising standpoint.”

It’s not the tickets that cement (a) relationship — it’s the time together, and the opportunity to provide an entertaining venue for business development, Stuart Aust says.

He adds that advertising costs an arena very little. But servicing accounts is another story. “It may be difficult to get the right equation when you figure in your cost of service,” Ives says.

So, when does sponsorship make sense at all? Ives says he pays close attention to seasonality. “We get the most bang for our buck when our message is in front of decision-makers just before they are about to make the decision,” he says. And in Michigan, people are thinking about pest control in the summer — so advertising in the dead of winter when pest pressure is down doesn’t make marketing sense for his firm.

But, Ives adds, some of the payback from servicing arenas comes with the satisfaction of caring for a special place. “It’s fun to be behind the scenes making it happen,” he says.

And, it’s fun to open up an issue of Sports Illustrated, read a profile about a player and see bird equipment in the background that your company installed. “There it was!” Ives says, adding that no one would know except his team, but they were stoked about the press.

Bottom line is, measuring “value” isn’t so easy with arena accounts. Matt Nixon, CEO at American Pest in Fulton, Md., says, “the sponsorships we do are branding, not a lead-generation tool.”

For Nixon, selling services to the arenas he frequents was a way to do business where he loves to hang out. “I used to go to 75 games a year between all of the different sports, and that’s a lot of games,” he remarks. “I’m already there, so…”

WINNING OR LOSING? Is it ethical to “strongly suggest” that vendors buy sponsorships for the opportunity to provide service? Should arenas that house attractive sports franchises use their status to sell ads? Is this the right way to do business? Or, is it just how this type of business is done?

Pest control companies have to make their own decisions about the cost and benefit associated with pursuing arena accounts.

To marketing professional Sage Lewis, owner at SageRock in Akron, Ohio, and the primary digital marketing agency for organizations like Davey Tree and the Cleveland Cavaliers, these deals sound pushy and not worth it for a small company.

“They are the kind of contracts that will make a small company go broke,” he says. Adding in his own experience, he says, “I stopped doing trades years ago. We live in a capitalistic society. We work on the exchange of money for services and products. If the service provider wants to buy sponsorship they should feel free to do so.” Otherwise, it’s not a dollar for dollar trade.

But you can walk away from arena business.

Every contract is different. “We have had situations where (clients) were intent on barter of service for visibility, but the economic equation didn’t work out,” Ives says.

Steckel says you basically have to choose how you’ll lose. A 4-to-1 spend vs. earn ratio on every account would be a disaster. There are plenty of “tipping dominoes” and opportunities to pick up arena business once you’re in the game, he says. But he knows his business can’t afford to say yes to every opportunity.

“It’s one of those things that grows very well until you grow past your ability to feed it,” Steckel says.

The other factor is when a franchise brings home a championship and sponsorship/advertising rates skyrocket. Will even a long-term pest control provider be able to keep up its commitment?

“They can set their marketing number much higher,” Steckel says. “We might not be able to say yes.”

Still, building the arena business is a pride and joy for many companies involved in managing pest control at these venues, including Steckel, Aust, Nixon and Ives. It’s not a field that everyone wants to, or can, play in — let alone win.

“Some guys like to go out on the golf course, others like to go out to dinner,” Stuart Aust says. “I like to take people to events.”

The author is a frequent contributor to PCT magazine.