What Brought Kevin Pass Out of Retirement?

In an exclusive video interview with PCT, Pass discusses the various factors that brought him out of retirement and some of the strategic business decisions he's made with his new venture — Pass Pest Control.

March PCT included the feature article "The Thrill of the Game" about the return of former NPMA President Kevin Pass, who sold his business, Action Pest Control, to Scott's in 2016.

In an exclusive video interview with PCT, Pass discusses what brought him out of retirement and some of the strategic businesses decisions he's made with his new venture: Pass Pest Control. 

Below is the transcript from this video.

Brad Harbison Kevin, I wanted to go back to 2015 when you sold Action Pest Control to Scotts. Why did you decide to sell at that time?

Kevin Pass: I had brought Keith Smith on board, I think seven years prior to that or eight years, something like that. He would know better the exact date, and he pretty much ran the company. You know, I did a lot of the motivation stuff. I do a lot of training, but he pretty much, you know, ran all the day-to-day activities and really, really grew us, you know. He took us from basically a $5 million company up to the $12 million company because he came from Terminix and they know all the metrics and so forth. But I had kind of got a little bit tired. And so I got on the board at NPMA, and that's, as you know, a five-year deal. You're secretary treasurer, president elect, president. And when I came off being president, I thought, all right, you know, it's time to get back to action and, you know, really work on the business. And I just didn't have the energy for it. And it was really. It was a good time to sell. And so I talked it over with Keith because he had a portion of the business and we decided it was a good move. And when we sold Lance Tullius guided us through it and we actually set the high bar for the highest multiple ever. And I held that record for almost 30 days before one of my friends sold and beat the record. And then the multiples have just kept growing. So I was just I was just burnt out. And so it was time to sell.

Brad Harbison: [And then I see you're down in Florida, so can you talk a little bit about what you've been doing since in retirement?

Kevin Pass:  Well, I failed retirement. I was pretty good at it. For the first year or two. I got bored. I looked around for some different things and, you know, I got into apartment owning apartment for a while and that was two years, the longest two years of my life. I'll never do that again. So I got rid of those. I got some other property investments. I'm trying to open a restaurant slash bar down here in Florida, but I just got a little bored with it. I needed a stimulation and Keith was at the point that he'd kind of gone as far as he could with TruGreen (which acquired Scotts). You know, when we sold to Scotts, it was going to be they wanted to go nationwide pest and lawn. And then their CEO got enamored with the marijuana business and that that dream just dropped off their radar about three months into our sale to them. And so all the potential opportunity for our people kind of went away when they sold it to Trugreen and [Keith] just got disenfranchised with them. And so when he was with Action, he only had 10% and he's ten years younger than me, so he couldn't retire. So I said, Well, if you want to run this for me, I'll give you 50% of it. And so he's doing it all. I mean, we talked a couple of times a day, but he's running the show.

Brad Harbison: Kevin, you mentioned the way the whole Scotts thing sort of played out. The way that played out that factor into your decision to, to get back in the game?

Kevin Pass: It factor pretty high because I felt really bad for, you know, the people who had been with me for a long period of time. And, you know, when I sold the Scotts, I could look them, everyone of them in the eye and say, this is a great opportunity. You're going to be the expert for this nationwide company. You're going to have all these opportunities. I could see technicians becoming branch managers, you know, all over the country and so forth. But with TruGreen, it wasn't it wasn't that way. And Keith kind of suffered under their management style. And I knew everybody else didn't like it either. You know, when I had Action, we were a member of the community. I don't know how much money we donated or time we donated to the non-profits, but it was significant and it trickled a little bit down to absolutely zero. I could just go on and on. And so it kind of feels good now, going back against them. You know, we're getting a lot of the old Action customers, of course, have come over, but we're also selling new business. And most of that, as you so eloquently put it in the article, is the door knocking.

Brad Harbison: Yeah, and I'll get to that in just a second here. But one of the things I want to talk about first, though, was the timing of the launch. You launched right when COVID hit. And we're just curious, what if some of the challenges that that presented and how did that change your growth plans for those early years?

Kevin Pass: Well, it was it was very challenging. And, you know, as I'm watching news clips and especially the clips you would see from Asian countries, they were all doing the disinfecting and, you know, even outdoors. And I thought, well, you know, there's an opportunity here because it's the same equipment that we're used to using. It's the same protective gear, PPE that we're used to doing. And so I started offering that. And my pitch was I didn't want to seem like a carpetbagger that I was taking advantage of a bad situation. So in my commercials, I just said, hey, what you can afford? You know, I know everybody's hurting. We’ll quote you a price, but if you can't afford that, pay what you can afford. And we had a couple of people to take advantage of that and, you know, leave us holding the bag. But for the most part, it played real well. And so that was you know, that was cash business like for my work. It was a lot of one-time stuff. We'd try to sell them on the recurring and we'd get some of that too. But, you know, then kind of the as the research developed, it was more spread by through the air than by touch. And so people started dropping off using that and then seeing it started opening back up. So it was about a two year run doing that.

Brad Harbison: Was it a good gateway, though, for you to make some connections with some folks that you were then able to sell pest control services to?

Kevin Pass: Yes, it was. And that was that was the whole aim really is to get our foot in the door and convert that to pest control.

Brad Harbison: And then I want to talk about Keith Smith. Why do you think you two worked so well together?

Kevin Pass: I mean, we just really complement one another. And he came from Terminix when I didn't really have much of a sales system in place. At Terminix, they've got a strong sales background. And so, you know, I was always big on the quality of service. And so just he accepted that. And I said, grow as fast as you can as long as you keep our quality. And he just took off. He took a company that had two salespeople to a company that had 20 salespeople. And so he was able to grow it while using the metrics of productivity. I mean, we weren't even tracking production but missed stops and route completion. Really wasn't on our radar. And those are just fundamental basics. And so he was he got our efficiency way up. He just did a remarkable job.

Brad Harbison: And Kevin, you previously mentioned the door knockers. And so, you know, that is one of the things you're doing differently this time around is using the door-to-door sales professionals. How did this decision come about?

Kevin Pass: Well, actually, Keith’s son (Noah) found the guy that was doing it. He had had experience going out West with some of the probably one of the Mormon companies, and he was real good at it. But he wanted his own company. So he formed an LLC. And so we sublet all that out to the rest. And I mean, it's just amazing to watch what they can do at the door. And, you know, I said in the article, it was kind of funny during the intro, but coming out of COVID, people were anxious to talk to somebody, and so they were a little bit more open to the conversation when we knocked on their door. But, you know, the idea with the door knocking is you need to get inside at the kitchen table, kind of like all, you know, salespeople do for residential sales. And that was a little tough at first with COVID. But we would show up with a mask on. And we got accepted real well. And so that is that has been a big growth for us.

Brad Harbison: And so has your perception of door to door knockers changed since you guys have been doing it?

Kevin Pass: Yeah, quite a bit. Quite a bit. And I think for us, I think a lot of the mistakes that some people make is they try to do it in-house and it just doesn't work because it's a totally different mindset. It's a totally different sales training and we'll bring the door knockers in and train them on the technical side of the business. And, you know, when problems come up, you know, maybe they maybe they overpromise something. We follow that up with training, but there's all the sales training. And so we keep that completely separate. And yeah, the perception has really changed because it's always been that that, you know, going back to like Terminix might have been one of the first companies to buy a door knocking company and they basically bought a pig in a poke. You know, it all just disappeared. And so they always say, well, the retention is not as good. We found the retention to be just the same because we take such good care of the customer. So it definitely has changed.

Brad Harbison:  Sojust about two years out, how is the company doing so far in terms of meeting your growth expectations?

Kevin Pass: Growth expectations have been awesome. I mean, it's really skyrocketed to have over we're probably at 4,500, customers - somewhere between 4,000 and 5,000 customers. Now, it's just hard to believe the. residential growth is quick because they make decisions quick. The commercial growth has really lagged. At Action we were 50% commercial, 50% residential. We're about 90% or 85% residential at past. And I would like to get those commercial numbers up.

Brad Harbison:  Last question I have for you is your what can you share with us as far as your future growth plans in terms of services you might launch or markets you might get into?

Kevin Pass: One of the things that when Keith and I, you know, looked into this and when he came on board was, you know, with Action, we were really looking at revenue. And so we offered [non-pest services]. We were mowing lawns at one point and we don't want to do any of that. We're basically staying pure pest control and fumigation. And so. I think our first kind of goal is to get to 5 million. We feel like we can get to 5 million with one office serving the surrounding area. At Action we were seven different offices. And so we really don't want to go back into to Louisville. We'd kind of like to go back into Indianapolis. But, you know, right now we're just trying to operate it out of out of one location.