Powering Up With Add-On Services

Pest control companies aren’t what they used to be. In fact, they’re a whole lot more than they used to be. Nowadays it’s a rare company whose services are limited to simply eliminating pests. From lawn care to log home restoration, there is no limit to the variety of possible add-on service options that exist.

“Add-on services can help you grow with your existing customer base, rather than geographically with adding new branches, and without having to put more money into finding new customers,” said Michael Sfreddo, vice president of Triple S Termite and Pest Control in Manassas, Va. The allure of this type of “horizontal” growth has resulted in lots of belt-widening in the pest control industry, with companies finding success through a proliferation of service offerings, rather than through trimming and/or downsizing. This is not to say that keeping a sharp eye on costs is unimportant. But there’s also value, many companies are learning, in putting some resources toward new enterprise development.

VALUED BY CUSTOMERS. Much of the diversification PCOs have experienced has come as a response to opportunities created by customer requests. “Life just gets busier and busier, and people don’t have the time to do many of the things around the house that they once did by themselves. [Customers] value their free time enough to pay someone else to do it,” said Robert Baker, technical director of Clark Pest Control, based in Lodi, Calif. “We offer [add-on services] at a fair price, and customers see the value in it.” Clark offers customers a bevy of additional services ranging from bathroom refinishing to a rose care program.

In addition to the obvious gains that come with establishing new profit centers, add-on services have presented more subtle yet long-term benefits, Baker said. For example, customer retention, a key business factor, has become stronger with the addition of new service offerings. When an insect problem at a particular account improves, Clark can still retain that customer with its other services, Baker said, mitigating the gain-one-customer, loose-one-customer situation that bugs so many operations. “[Add-ons] are one more link in the chain with our relationship with customers,” he said.

The increased customer retention can also decrease marketing costs by reducing the need to catch the attention of new customers, Sfreddo said. “Your existing customers are the best base to tap into for add-on services,” provided, he added, that you are satisfying customers with your core pest control services and that you balance the sale of additional offerings with your primary job of eliminating pests. This means not simply trying to sell customers a new service at every call, but instead being sure to take care of their current problems.

That said, technicians and salespeople at Triple S are trained to keep an eye open for add-on opportunities within each residential account. For example, once while completing a termite inspection, a technician saw blueprints for an addition to the customer’s home lying on a table. The technician inquired about the job and mentioned Triple S’ construction division. Triple S submitted a bid to the customer and won a job worth several thousands of dollars.

Triple S’ construction division grew out of a relationship the pest control company had established with a local contractor. Previously, major termite damage repair jobs were farmed out to the construction firm. Eventually Triple S joined together with the company and has been offering construction services ever since. “It was a perfect fit,” Sfreddo said. In addition to conducting repairs, the construction division has completed major jobs for customers that are totally unrelated to pest control.

KEEP IT SIMPLE. While other companies may be less ambitious about their pursuit of add-on service offerings, they are nonetheless finding value in expanded service. Ossie Thomas of Thomas Exterminating in Dalton, Ga., has been offering pressure washing services, as well as deck cleaning and restoration services for almost two years. Customer response and resulting new business has begun to slowly build around the add-on services, he says.

Add-on services don’t have to be elaborate new programs, says Michael Potter, extension entomologist at the University of Kentucky, Lexington. They can be as simple as following through on IPM recommendations, such as cutting back bushes and vegetation that abut a structure or venting crawlspaces. Completing these kinds of tasks can save the customer the extra headache of finding someone to complete these tasks, thus strengthening your company’s relationship with that customer, as well as generating extra revenue.

But extra revenue and improved customer relations are not the only important reasons to explore add-on services. Paul Hardy, senior technical manager of Orkin Pest Control and a pioneer of add-on services at the company, cautions PCOs not to overlook the positive effects add-on services have on technicians. “If you’re adding add-on services just to increase revenue and profit, I think that is a mistake,” Hardy said at a seminar at the 1996 National Pest Control Association convention. Technician turnover is one of the most important problems facing the industry, and incorporating add-on services is one way to keep technicians throughout the whole year, rather than just seasonally, Hardy points out.

Hardy has been instrumental in the development of many of Orkin’s add-on services, such as its Deck Guard, wood protection and “added-cap” insulation programs. (The “added-cap” program involves blowing an added layer of loose, borate-treated cellulose insulation on top of a customer’s existing attic insulation.)

Many customers become especially concerned about the appearance of their home and decking beginning around Memorial Day and continuing into September. This schedule fits perfectly after termite season, as swarms in the South begin in February and slow down in June. As a result, termite technicians left with light workloads can keep busy completing deck protection or attic insulation work.

CHALLENGES. While the lure of added revenue and an expanded customer base may be a powerful one, diversification is not without challenges. New equipment means new and bigger facilities to store them in. And new types of services may require new personnel. These up-front investments may be a significant financial gamble for small and mid-size pest control companies, especially because of the difficulty in judging how quickly, if at all, an add-on service will grow.

Training veteran technicians who may be reluctant to change their everyday routine in new add-on services can be a challenge as well, Baker said. But he said the effort is worthwhile, as Clark technicians end up appreciating the value of the added skills. Furthermore, the added abilities improve the self-esteem technicians bring to the job. Getting technicians involved in training issues and allowing them to share their add-on service ideas can go a long way toward easing any strain caused by the added responsibilities. Training issues have also been eased at Clark because each add-on service is handled by specifically assigned employees.

TO ADD OR NOT TO ADD? Add-on services have been a boon for some companies, and a bust for others. Before you and your company jump in, you’ll want to take a hard look at some of the pros and cons. Michael Sfreddo, vice president of Triple S Termite & Pest Control carefully considers whether an add-on service is appropriate before adding it to his stable of services. He uses a multi-faceted criteria for selecting an add-on service to offer and asks the following questions before jumping in:

• Are we capable of completing the service? Does the service require special tools or time commitments that are too burdensome, or not worth the extra effort?
  
• Do we have the personnel to support the add-on service? Will it be relatively easy to train employees to complete the new service? Do we have access to people already skilled?
  
• How well does the service fit into the company? Does offering the service make sense? Is it a natural extension of tasks the company is already involved in?
  
• Will the company’s insurance cover such a service? What if the company runs into problems?
  
• Are there any new legal aspects pertaining to the add-on service? Are additional permits and licenses needed?
  
• Is the service financially feasible? What are the start-up costs and are they affordable? How much profit is expected, and in what time frame?
  

It’s important to consider all of these aspects, says Sfreddo, to ensure that the new service is appropriate and will result in a positive outcome for the company.

At Clark Pest Control, customers are polled through the company’s customer newsletter to determine the demand for each add-on service being considered. Many times the company considers adding a new service when it is frequently requested by customers. In researching the service idea, the company tries to generate realistic financial figures such as the amount of customers who will use the service and the cost of the extra training and materials required. Then Clark decides whether to add the service based on these financial numbers, the break-even point and likely profit potential.

It’s a valuable approach that every company weighing the pros and cons of add-on services should consider.

The author is assistant editor of PCT.

Sidebar: ADD-ON SERVICE IDEAS

Lawn Care. With trucks, tanks, sprayers and trained pesticide applicators already in place, lawn care services has seemed like a natural extension for many PCOs. For instance, Rottler Pest Control and Lawn Care in St. Louis, Mo., began offering lawn services in 1985 and has seen the division grow equal in sales to the termite division. Mike Rottler, general manager, said lawn service has developed into a consistent and year-round profit center. The company also offers snowplowing services to generate revenue in the usually slower winter months.

Offering lawn care services can also present unique challenges that must be considered before offering the service. In addition to new training challenges and finding quality technicians to begin lawn care service, new equipment must be purchased and maintained as well. From aerators to lawnmowers, as well as new storage areas to house them, several significant up-front investments are necessary to maintain a first-rate lawn care division.

Decks. Because of their natural susceptibility to damage from wood-destroying insects, various forms of deck services have become popular among enterprising PCOs. From cleaning and restoration services to full-blown deck construction, PCOs are attacking decks for added opportunity faster than a hungry termite. One popular program developed by Paul Hardy of Orkin Pest Control involves a multiple-step process which includes pressure washing, a treatment with a protective borate solution, and the application of a sealer.

Moisture Control. Excess moisture in crawlspaces, voids and walls is a virtual all-you-can-eat sign to termites, as well as a popular stomping ground for cockroaches, fungi, mildew, etc. Eliminating this pest-inviting situation not only aids PCOs in effectively preventing pests from an account, but is also a potential added revenue source. PCOs can help eliminate moisture problems by installing vents and/or fans in problem areas.

Bathroom Refinishing. Bathrooms are often the site of infestations of a variety of insects, with cockroaches being the most common. Bathrooms provide a constant supply of moisture as well as plenty of entry and harborage points such as sinks, leaky plumbing and cracks and voids between walls and bathroom fixtures. These areas can also be susceptible to fungi and mildew. In severe infestations of various pests, cockroaches or fungi, sometimes extensive structural work is required. Showers, bathtubs, sinks, tiling, flooring and plumbing may need to be removed, repaired or altered to prevent against a pest problem. And that’s where the ambitious PCO steps in. For example, Robert Baker of Clark Pest Control says the company sometimes has to remove tile because of fungus in a bathroom. PCOs could just rip up the wood and tile and tell the customer to take care of the repair or recommend a sub-contractor to do the repairs, Baker said. But instead, Clark takes advantage of the opportunity and completes the bathroom repair work