Value-Added Services

Everyone wants quick growth. But few companies know how to churn out new accounts. Pestnet Corporation of Sacramento, Calif. has a sales and marketing system that works. Since Pestnet started one year ago, it has sold more than 3,000 annual pest maintenance accounts.

How did the company do it?

Sales, sales, sales.

And service.

By creating a highly motivated sales force, Pestnet has grown at a phenomenal rate for the industry. By emphasizing customer service, the company also has built dynamic long-term relationships with customers that give Pestnet a rapidly expanding market share.

The sales system Pestnet uses was developed eight years ago by a sister corporation, Salesnet Marketing Group. Salesnet sets up turnkey sales operations for pest control companies across the country. The company works in 26 cities during the summer selling annual pest maintenance contracts to new customers. Salesnet generates between 1,500 and 3,000 additional accounts per branch during the four-to five-month selling period. Each branch employs eight to 16 college students as a summer sales force.

Salesnet found that it takes 63 cold calls to make one sale. Getting a sales force to make the 189 calls a day that will end in three sales, however, is the $64,000 question. The answers are: • Motivation.

• Goals.

• Rewards.

MOTIVATE, MOTIVATE, MOTIVATE. Motivation is one of the most elusive aspects not only of sales but of work itself. A belief in self-improvement is the bottom line for motivation. Whether in a selling environment for improving the morale of the sales force or for personal growth, people need to believe they can succeed.

The sales force has meetings each morning to get themselves pumped up. A quarter of the hourlong meeting is spent on such traditional sales techniques as how to close a sale and how to overcome objections. Another quarter of the daily meeting is spent on motivation and personal growth and how these factors relate to the company's mission. Salesnet provides a library of time-tested books, such as Stephen Covey's Seven Habits of Highly Effective People, that employees actually use. It also has books and videos by other trainers such as Tom Hopkins and Brian Tracy.

Employees concentrate on attitude plus the qualities it takes to be disciplined and organized two essential keys to success. During the motivation segment, team members share personal sales experiences which are discussed in depth. In this way, they learn to incorporate positive attitudes and habits into their everyday lives.

In the meetings, the manager constantly reminds the sales force of the company's mission of service as well as setting daily goals.

GOALS, GOALS, GOALS. Setting tangible, attainable goals is an integral part of the Salesnet motivation system. Sales are tracked nightly to make sure the sales force meets its daily goals and gets recognized for its achievements.

Salesnet's computer center in Chico, Calif., tallies a national sales report from the 26 regional sites and has a printout with figures ready by 8 a.m. the following day.

At each morning's sales meeting, the printout of the previous day's work shows who met their goals and who didn't. This tracking capability allows managers to immediately spot problems with salespeople who are having difficulty. Before the person has a chance to become demoralized, they are taken in hand and given help.

The daily stat sheet, called the Spotlight, has upbeat graphics with sales, service and scheduling information. More importantly, the daily newsletter highlights the top salespeople nationwide. It also lists the names of sales reps who contacted 250 or more homes the previous day. And it lists everyone who put in at least seven hours in the field making cold calls. In other words, everyone who has met goals is recognized and given a pat on the back. As a result of this system, sales representatives are consistently able to make 200 house calls a day in six hours--and are able to motivate themselves to meet their goals.

The report also compares sales data to the previous week and the previous year. This comprehensive tracking system enables Salesnet's managers to forecast sales for the year within the first few weeks of the sales program's startup.

BONUSES & INCENTIVES. For salespeople, the single most important factor in working is reward monetary reward. So much so that even small amounts of money can be used to motivate sales teams. Salesnet has many bonuses, from the first sale of the day to sales over and above a certain number for the week.

Sales managers also use incentives to increase sales and maintain daily production. If, for instance, the office has no service calls scheduled the next day, the sales manager can offer a cash incentive for every account that can be serviced immediately. Like most sales teams, Salesnet allows some pricing leeway in selling annual contracts, especially door to door.

This type of pricing flexibility gives the sales force an incentive to sell immediately. It also increases the sense of urgency for the customer and puts extra money in the salesperson's pocket.

The immediacy of the reward adds to the incentive. A bill in the hand that night is much more effective than a higher number on the paycheck next week.

ADD-ON SERVICES. With many PCOs nationwide, it's difficult to set yourself apart from the pack. But it's necessary to do so. The pest control industry is extremely competitive which is where marketing and image come in. Relying solely on Yellow Pages advertising for new customers and quick growth can leave you with a dwindling market share.

Pestnet has incorporated Salesnet's system into its own operation. The company's sales staff of 12 men and women put in six hours in the field, contacting 200 homes a day during the summer, to set up year-round pest maintenance contracts. Salesnet provided the sales and marketing expertise that has gone into this successful formula. Pestnet came up with the premium service.

Which route you're going to take depends on what type of company you want to be and what type of image you want to project. Since the beginning, Pestnet chose to be a premium service company. The company felt that choosing this route would give it the ability to offer more and bring in more sales in the long run. When service is primary and pricing is secondary, companies can find a happy medium between profit margin and satisfied customers.

Pestnet relies on customer service to expand its selling base and to keep current customers coming back. The company always is looking for new services, either to add to the regular maintenance program or to sell separately. Pestnet has boosted sales from current customers and expanded to new ones by adding creative services. Added value often is the deciding factor in an initial sale. Afterwards, extras keep customers happy year after year.

AIR FILTER EXCHANGE. Last year, Pestnet added an air filter exchange program to its regular service. Two of the reasons for adding an air filter program were:

• To increase perceived value.

• To increase business during the slow months.

During the winter, when calls for pest control services traditionally slow down, having a new service brought business through the door. Although most people in California change their air filters at the start of the summer, articles often appear in newspapers reminding people to change their air filters in winter as well. Pestnet capitalized on this.

In colder parts of the country, this service has a major impact on business income during the winter months. Two types of service are offered: drop-off and installation. Both are sold on a year-round maintenance basis. Pestnet uses high-efficiency, pleated air filters which need to be changed only once every four months.

Like the annual pest maintenance contract, the exchange service sells convenience. In buying a regular filter exchange, the customer doesn't have to remember to change the filter. The convenience aspect not only helps the customer cope with the many demands of modern life, but also subconsciously reminds them of Pestnet's mission of service.

The first filter is free, whether to new customers or to current ones. The salesperson can use this add-on as a tool to close the regular pest control maintenance contract. Service technicians can sell it on its own to current customers. To date, service technicians have been extremely enthusiastic about the program and successful at selling it.

In the first 60 days, technicians averaged three to four filter sales per day. Some technicians averaged $40 to $80 per day in commissions from sales. Because the program takes only a few minutes to explain, the commission is a great sales incentive for technicians who are already on a service call. Incentive commissions are handed out in front of everyone, adding the public recognition factor to the equation. Contests are held regularly to see who can sell the most.

The filters themselves usually cost about $3.60, although the price ranges from $2.50 to $7, depending on size.

The cost to the customer depends on the choice of drop-off or installation. For drop-off, the cost is $19 for a single return, $29 for two filters, or $39 for three filters. For installation and disposal, the cost is $39 for one filter installation, $49 for two filters, or $59 for three filters.

Homes usually need one filter. Rarely are homes so large that they need more than two.

So far, 90% of the filter contracts have been drop-offs, the remaining 10% installation and disposal.

By doing this, other pest control operators could take advantage of a service that not only helps increase business during the slower parts of the year, but can be part of building an ongoing relationship with the customer.

INCREASING PERCEIVED VALUE. Customers want to think they get a good deal for their money. Adding extra services free of charge makes them feel good about working with you.

On the first visit, Pestnet gives each client a bottle of flea spray for their pets, as many companies do to increase perceived value. It shows that you have the customer's best interest at heart by offering a complete pest control package.

Pestnet gives out a bottle of Petcor Flea Spray, a product made by Sandoz Agro Inc. of Des Plaines, Ill. Available only through professional pest control operators, the spray is a natural pyrethrin and an insect growth regulator which costs the consumer about $7 per bottle. After the initial bottle is given out, the pest control operator could enhance the value of his service by providing (or selling) additional bottles of Petcor.

The numbers of bottles given out follows the flea cycle, slowly creeping up in the spring and tapering off again in the fall. During the summer months of May through August, Pestnet hands out about 400 bottles per month at a cost of $2,800.

Obviously, the importance of flea control depends on where one's company is located. Fleas are a problem in Sacramento, Calif., with a large percentage of customers having flea concerns. PCOs who are not already handing out a bottle of flea spray and marketing it as a flea control system should consider adding this to their overall sales package.

Another service some companies offer is webbing the eaves of the house. From the start, Pestnet included this service even though many in the industry consider webbing unnecessarily time-consuming. Webbing does take approximately one-third of a service call.

In answering the question "To web or not to web?", customer perception is a major factor to consider. Webbing is important because it makes the customer realize the job was done well. Webbing gives the customer something tangible, something they can see. While the chemical odor, if there is one at all, will linger for only a few hours, the effect of webbing lasts at least a few days. Webbing not only gets rid of insect debris but in most cases pulls down the insects themselves. While the marketing is important, the service itself actually is part of a whole system that eradicates all unwanted insects.

Webster heads generally need to be replaced every month or after 200 homes. At $5 per unit, the cost of the new head is minimal.

Extra touches such as webbing and flea control are not new. But they add convenience to the package a concept that is becoming more valuable every day.

With both spouses working, the harried homeowner usually doesn't have time to do the maintenance that needs to be done on the weekends. As such, homeowners appreciate the convenience of having someone else do some of the routine upkeep. Convenience also includes not having to shop for air filters or flea spray. Time is becoming such a valuable commodity that people are willing to pay more if the service is moderately priced.

While the main focus of most pest control companies is pest control, being on the lookout for other services keeps you abreast of the market. Some companies clean ducts, and some have added drain or gutter cleaning. Some specialize in organic pesticide use only. As long as the PCO maintains his pest control focus, he can build a stronger relationship with his customers by creating add-on services.

There are, in fact, as many ideas for value-added services and sales as there are people to come up with them. If you keep your eyes and ears open to customer needs that you could satisfy without changing your business too radically, the only limitation is your imagination.

OVERCOMING OBSTACLES. One of the obstacles to add-on services is time, either for the route technician who wants to get the job done or for the pest control operator who has to make a certain number of calls per day to keep the doors open.

Seen in terms of marketing, time takes on a new meaning. Making the customer feel that you are doing the most thorough job possible may seem intangible, but the psychological reward is real. If you put the time in perspective--and make sure technicians do, too five minutes to give out a bottle of flea spray or 15 minutes to web a house is not that great.

Perceived values greatly increase customer satisfaction. Extra services also make it more inconvenient for a customer to cancel the pest maintenance contract, if they also lose a variety of services such as webbing and filters.

LONG-TERM RELATIONSHIPS. The motto of the 1990s is long-term relationships. These can be created in many ways. One way is to follow up the initial service with a phone call to solicit customer feedback. Pestnet makes a welcome call within three days of the first service. While this is done by other companies in the industry, Pestnet uses it as a key component in building the customer relationship. A phone call shows that the people at the office care about what happened at the site how the technician did and how the customer felt.

When the customer service representative calls, he (or she) asks basic questions to check that the records are accurate and that the terms of the annual agreement are understood. They also ask what could have been done to make the service better.

The call takes a few minutes. But it helps avoid billing errors and monitors the technician's professionalism. More importantly, the call begins to cement the relationship with the client.

Long-term relationships are good for the company and for the consumer. In our overwhelmingly busy society, it makes life easier for consumers to have one less thing to think about. It makes life simpler for them to know they can rely on you.

Most PCOs want their company to grow. If you are constantly expanding your services, product offerings and value-added sphere, constantly thinking of your relationship with the customer and what you can do for them, you will be on the cutting edge not only of the pest control industry but of business itself.

A free-lance journalist from Sacramento, Calif., Dell Richards has written for Associated Press, Gannett News Service, Buzz and other magazines.