[Top 100] 2012 PCT Top 100 List

Just Announced: Get Listed on the 2013 PCT Top 100 List PCT magazine is in the process of identifying the largest 100 pest management firms in the U.S., based on 2012 revenues. Please take a moment to provide us with the following information about your company and submit it to us by Thursday, February 28. We look forward to your reply so that your company receives the recognition it deserves as a member of PCT's Top 100! Click here to fill out the online form.

 

To see the full list, click the picture above.

A few notes about this year's list:

• The PCT Top 100 list is based on 2011 revenues.

• The abbreviations on the list are as follows: = estimated figure; n/a = no answer/unknown; NC = no change; % GPC = general pest control; % TC = termite control; % Other = other services (see next bullet point); % RES = residential; % COM = commercial; EMP = employees.

• In the “other” category, services include turf and ornamental work, landscape maintenance, “home” services (i.e., handyman services, home inspections, carpet cleaning, insulation services, moisture remediation, etc.), fumigation, heat treatments, bird control, mosquito control, wildlife exclusion, etc.

• Companies in the PCT Top 100 list earned revenues of $5,176,074,423 in 2011, which was an increase of $179,664,641 from 2010.

• There are 30 states and three Canadian provinces represented in this year’s list. Florida and California both have 12 firms on the list.

• Revenues for the three Canadian firms are reported in U.S. dollars. The May 1 exchange rate was $1.02 Canadian to $1 U.S.

• Last year, Nader’s Pest Raiders of Ponte Vedra Beach and Fernandina Beach, Fla., was #82 on the list. The firm was acquired by Arrow Exterminators, Atlanta, in December 2010 so the firm is no longer on the Top 100 list.

• EcoFirst, Las Vegas, was #51 on last year’s list. The firm was sold to Terminix International on Nov. 1, 2011, so it is not listed this year.

• Spencer Pest Services, Roswell, Ga., was #96 on last year’s list. Atlanta-based Arrow Exterminators acquired Spencer’s Florida operation so the firm is not listed here.

• Visit PCT magazine’s interactive map (http://bit.ly/Ka5cfB) to see company information and view live links to each of the Top 100 firms’ websites.

• This list was compiled by the PCT staff throughout the spring of 2012. E-mail PCT Editor Jodi Dorsch at jdorsch@giemedia.com with comments about the list.

 

 

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First Ever: Rollins Trumps Terminix

There’s a new No. 1 on the PCT Top 100 List. In 2011, Rollins edged out Terminix International for the top spot.

For the first time in the 11 years PCT magazine has ranked the industry’s Top 100 pest management companies, Rollins has edged out Terminix International for the No. 1 spot. Rollins had 2011 revenues of $1,205,064,000 compared to Terminix’s $1,193,075,000, a difference of nearly $12 million. Rollins grew six percent last year; Terminix reported no change.

A major engine for Rollins’ growth has been large acquisitions of regional “powers” such as HomeTeam Pest Defense, Western Pest Services, The Industrial Fumigant Company, Waltham Services, Crane Pest Control and TruTech. Rollins executives also cited the following factors for their growth.

Focusing on talent. A firm grows by selling new business, buying business or retaining it, but “those things don’t happen without good people,” said John Wilson, president of Orkin USA. “Our success is dictated by putting really quality people on the doorstep of that customer or in that business.”

Terminix Remains the Industry’s Largest ‘Brand’ Although Rollins may have had higher revenues than Terminix International in 2011, Terminix remains the industry’s largest brand. How so? Rollins had revenues of $1,205,064,000 in 2011. Terminix International had revenues of $1,193,075,000. However, there are four Terminix franchises on the PCT Top 100 List: • Terminix Service, Columbia, S.C., 2011 revenues: $105,133,441 • Terminix Co. of North Carolina, Fayetteville, N.C., 2011 revenues: $44,880,000 (estimated) • Bruce Terminix, Greensboro, N.C., 2011 revenues: $20,130,000 • Terminix Service, Metairie, La., 2011 revenues: $11,500,000 When added together, Terminix International and its franchisees brought in $1,374,718,411, which is $170 million more than Rollins. But since these franchises are separate businesses, they are listed separately on the list. Thus, Rollins had higher revenues than Terminix International. When Rollins makes an acquisition, many times it lets the acquired firm continue under its legacy name (e.g., Western Pest Services, Parsippany, N.J.). In such cases, it may not be clear to the consumer that the firm is under the Rollins umbrella. But the Terminix companies all have Terminix in their name, thus the firms have bragging rights as the industry’s largest “brand.” ServiceMaster’s 2011 annual report alludes to this fact: “We estimate that Terminix’s U.S. market segment share for the termite and pest control services we provide is approximately 22 percent, based on total operating revenue for Terminix’s services (including revenue generated by our franchises) of approximately $1.4 billion in 2010.” — Jodi Dorsch

Rollins Corporate Administration Vice President Gene Iarocci agreed. Company success is “built on the backs of its people.” That is why Rollins recruits, hires, trains and develops the best people in each market, he said.

In February, the company named Greg Baumann, who joined Orkin in 2010 from the National Pest Management Association, as vice president of training and technical services. “He’s going to make a huge impact for us,” said Wilson.

Another notable personnel move was last year’s promotion of Bob Wanzer, who came on board when Rollins acquired HomeTeam Pest Defense. He was named CEO of the following brands: HomeTeam Pest Defense, Orkin Canada, Western Pest Defense, The Industrial Fumigant Company and Waltham Services.

Sharing ideas. The best ideas come from employees, so the company takes steps to “foster a sense of entrepreneurship,” said Wilson. “That’s how many of our strategies wind up getting developed.”

Rollins holds annual meetings for executives and marketing professionals across brands to share best practices, brainstorm and tackle challenges. A steering committee meets quarterly to exchange ideas and set business priorities. “Many of the ideas that come out of the field units get vetted at this group,” said Iarocci.

Last November, 24 executives participated in a new leadership program developed with Georgia State University. Modeled on an executive MBA program but focused on managing a multi-brand service business, it involved two weeks of pre-work and a week of classes taught by university professors. Attendees then had 10 weeks to complete a work assignment monitored by their division president. The program took a year to develop and is “pretty intensive,” said Iarocci. A new group will begin the program in October.

Making it easy. From a customer perspective, “we’re trying to become very easy to do business with,” said Rollins Chief Marketing Officer Kevin Smith. The company has spent considerable effort refining its message, gaining access to customer opportunities, and “making sure that the customer knows where to find us when they have a problem.”

Social media has changed the marketing paradigm. “The consumer is shaping the brand,” explained Smith. Rollins is working to get ahead of and be a part of the conversation. “That’s a big change for us and a big trend in the marketplace.”

Firms that do it better. Rollins remains “very active” in acquisitions, said Iarocci. “We have a number of things in the hopper right now.”

It looks for companies with similar cultures so the transition to the Rollins way is easier. When you merge with a company you gain people and customers, said Wilson. “Neither has to stay. If you lose the employees, you’re going to lose the customers.”

Rollins strives to create an environment where “we can continue to learn and also where we can become better at what we do,” Iarocci explained.

Each of its acquired companies “does something a little bit better than we do now,” said Smith. Sharing these best practices across the business has helped Rollins grow “a little better and little faster” than its competitors.

Acquisitions also depend on how a company’s business portfolio can help Rollins achieve its strategic objectives. Geographic location can play a role, too.

In March, Orkin acquired Hyde Park, N.Y.-based Craig Thomas Pest Control, which will operate as a separate brand because of its regional brand recognition.

Rollins has a list of companies its executives talk with regularly about exit strategies. It’s all about building relationships, said Iarocci.

Fighting commoditization. Commodity pricing is the “most troubling thing we see in the industry right now,” said Smith. To distance itself from this trend, Rollins is improving service delivery and customer satisfaction. Both are measured daily and managers get customer satisfaction scores each morning by e-mail.

Rollins doesn’t want to see pest management turn into the airline industry, where the values of brand and service are taken out of the equation and commoditized to the point of being one price against the other, Smith explained. Providing a better customer experience every time changes this dynamic.

If customers see the value of what you provide every day, they’ll find the money to spend to protect their home or the reputation of their business, because at the end of the day the expenditure is rather small, said Smith.

Growing the category. Rollins has “excellent competition in the marketplace,” which challenges it to do better, said Iarocci. But he’d like to see competitors focus more on expanding the category rather than taking away others’ business. “The focus is in the wrong place,” he said.

Industry growth will come from converting the 80 percent of people who do pest control themselves or hire maintenance contractors, he explained. The worst thing people in the industry can do is trade business “when there’s a whole market out there that’s waiting for professional service.”

The industry could do a better job of penetrating new markets, Smith noted. A significant part of Rollins’ marketing effort is geared at people who’ve never bought professional pest service, such as new homeowners. “We’re accessing a lot of the new category users, probably more than our fair share,” he said. — Anne Nagro

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Dynamic Duo

Chuck Fallon, former president of Burger King North America, has been selected to lead Terminix International, working in partnership with industry veteran Larry Pruitt, the firm’s vice president of operations.

Terminix is one of the crown jewels of the ServiceMaster family of high-profile brands, but in recent years the company’s static growth has prompted some to question its long-term prospects for continued market dominance, despite the high marks given to industry veteran Tom Brackett’s tenure at the top, where he split his time as president of Terminix and interim president of TruGreen.

With Brackett’s move late last year to president of ServiceMaster’s lawn care business, the person hand-picked to take the company’s pest control operations to new heights is Chuck Fallon, a former investment banker who most recently served as president of Burger King North America, where he oversaw 12,000 restaurants globally, including 7,500 company-owned and franchised restaurants.

Jump starting Terminix’s revenues would be a tall order for anyone – even someone as accomplished as Fallon, who has a proven track record of success as vice president of revenue generation for Cendant Corporation, a global travel and real estate company whose brands included Avis, Budget, Century 21 and Coldwell Banker, but despite the daunting nature of the assignment, Fallon says he’s up to the task.

“The challenge is to take that foundation we’ve built as a company and create a new growth trajectory for the business that is greater than the market overall,” he said. “It’s about thinking outside the box on ways we can grow. It’s about delivering new products and services against customer needs, which requires a willingness to make the necessary investments to make that happen.”

Fortunately, Terminix has the people and culture in place to expand, according to Fallon. “I don’t know if I’ve ever been so blessed to come into an organization that is already so high performing and driven,” he said. “To be able to walk into such a positive environment is pretty unique,” particularly given the economic headwinds that have slowed the industry’s growth in recent years.

While Terminix was not immune to the effects of the recession, Fallon says every organization can benefit from a leader with fresh insights, as long as the collective success of the organization is at the core of his or her mission. “At one of our first leadership team meetings, I said: ‘We’re going to do this together. My job is to break down barriers, make the right kind of investment decisions, and allow you to do your job more effectively.’ If I can bring that to the table, then we’ll be successful.”

A key member of Fallon’s leadership team is Larry Pruitt, a 26-year veteran of the industry who has spent more than two decades rising through the ranks at Terminix. In his role as vice president of operations, Pruitt not only manages day-to-day operations, but serves as a trusted sounding board for Fallon, while embodying the company’s unique corporate culture as a result of his long tenure at the Memphis-based company.

“Chuck relies on me to share information with him about the business,” Pruitt said, although it didn’t take long for the 49-year-old executive to get up to speed. “He evaluated the organization very quickly,” Pruitt observed. “Chuck has really delivered a lot of new energy and focus to the team,” creating a complementary one-two punch that should serve Terminix well heading into the future.

“Larry and I are very similar people,” Fallon said. “We take a thoughtful approach to the business. Sometimes I dial up my sense of emotion and urgency, which is part of my role, so I need Larry to be a sounding board. He’s forgotten more than I’ll ever know about this business. It has been smoother jumping into something with someone who has the same thought process.”

Which is why this new leadership team — possessing very different personalities but a shared mission — holds such promise for one of the industry’s storied brands. “The first thing that hits you when you walk through the front door of the company is the culture of the organization, a culture that has been created over 85 years,” Fallon observed. “The culture doesn’t need to be fixed. The company has had a phenomenal track record. However, if we do our jobs correctly, we’ll be able to positively shape that culture, leading the company to faster growth, better career opportunities for our associates, better customer service experiences, stronger revenue growth and enhanced profitability.”

Ultimately, time will tell if that is the case, but it’s clear the man at the top is eager to get started. “There’s plenty of opportunity for us to build on the strong foundation that already exists at Terminix,” Fallon said. — Dan Moreland

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Success is a Journey, not a Place

Many times when growing a company, we forget to take a step back and celebrate success. We get so caught up in the everyday grind that we forget to congratulate our employees on a job well done. After all, in the pest control business, our people are our products and creating milestones along the journey that can be celebrated re-energizes our staff.

As we celebrate the 100 largest pest control companies in this issue, we need to remember that if it were easy, everyone would be doing it. Growing a business is like raising a garden. It needs to be worked each day, nurturing the successes as well as tending to the weeds that result in negativity or adverse results.

In order to grow a pest management business we need to have expertise in several functional areas of management or work with people who have such expertise. The functional areas include:

• Marketing. This can be defined as all activity to deliver a lead to our salesperson. It includes advertising, networking and public relations. Successful marketers create a marketing budget that is executed using a calendar of marketing events such as mailings, Internet strategies, phone campaigns, Yellow Page expenditures, etc.
• Sales. This is all activity inside and in the field that result in conversion of leads generated by the marketing effort into an actual sale. It includes crafting estimates and proposals, making follow-up calls and closing the actual sale.
• Operations. This is how you run your business. It includes:

– Office operations. This includes everything that goes on in your office, from answering a phone call to scheduling a service, writing an estimate or sending out monthly bills and renewals, as well as running your accounts payable.

– Technical operations. This includes treatment protocols, material ordering, routing, technician training, safety protocols, etc.

• Accounting. This is a subject near and dear to my heart. One of the most important aspects of growing a business is properly setting up and maintaining an accurate accounting system. It is weak bookkeeping and accounting controls that I most often see as the reason why many PCOs hit a wall in their growth. Poor bookkeeping and accounting hinders the growth of any business but really tends to take its toll when a business reaches about $500,000 in annual revenue. While a PCO can grow further with poor accounting controls, what I’ve seen is that businesses that don’t get their accounting under control usually operate at very poor profit margins or tend to lose money as well as risk debilitating IRS audits. It always makes sense to employ a competent accountant to set up and maintain an effective system of recording and analyzing transactions.
• HR management. Everyone who is successful in the pest management industry understands proper human resource management. I don’t mean that they are experts in legal compliance, but rather they know how to choose the right people to put on their team. They are experts in motivating people through compensation and nurturing job satisfaction, as well as creating the company vision. With regard to legal compliance, they understand that there are experts who specialize in this area and it’s usually prudent to seek these people out prior to having a disgruntled employee create havoc with an employment lawsuit.

Memorable Milestones. As time passes and our firms grow, what are some of the milestones that we either celebrate or observe? Well, here are several that most PCOs experience:

• The day you decide to do it full time. Many PCOs start their business as a side activity while maintaining a full-time job. They do it to earn extra money and soon realize that not only is the pest management business a great way to earn extra bucks, but if handled like a real business it can become a career and build wealth for ownership.
• First employee. Hiring the first employee confirms that there is a real business and that more than just one person can make a living from the venture. Some hire an office person first while the owner runs the routes. Some hire a technician first so that the owner can “work on the business” rather than “work in the business.” Whatever the preference, hiring the first employee is truly one of the most exciting steps in building a business.
• Moving into your first office. This is the day that the PCO has separated his business from his personal life. Most find this to be exciting because they have a place to go in the morning. But probably more important is that there is a place to leave at the end of the day, which allows an owner to make a conscious effort to turn off the day’s stress and come back tomorrow fresh and ready to solve problems with a better prospective.
• Realizing you no longer can write a check to cover expenses. This is the single scariest milestone. Anyone who grows a significant business knows about this day. While building the business, many owners lend their company money to cover expenses or payroll or hold paychecks written to themselves until there is money in the bank to cover those checks. These are all very common techniques to manage cash flow in a small business. The owner takes comfort in knowing that any cash shortfall can be covered with personal funds or a credit line. The scary part is when the numbers become so large that the business needs to generate significant enough cash to cover these expenditures as personal funds and the credit line are no longer sufficient. Luckily the pest control model is one of recurring revenue and predictability making it, in my opinion, one of the best businesses to own. While this day can be scary, if run properly, we know there should be funds on the horizon from recurring routes and renewals.
• First $1 million in revenue. Need I say more? A very exciting day!
• Hiring your first manager. This is a day when the owner realizes that he can’t do it all himself. A professional manager helps the owner divide and conquer business tasks by breaking up and assigning responsibility for various functional areas of management.
• The first time you’re approached about being acquired. It’s always nice to be wanted! The pest control industry is full of players who are looking to expand their companies and as such it creates an opportunity to harvest the fruits of your efforts. If not looking for a sale, the process makes us feel good that we have built personal wealth by building a pest control firm that is salable and gives us an indication of the value of the wealth created.

Time to Reflect. As we celebrate the PCT Top 100 in this issue, it would be proper for those who are on the list to take a step back and reflect for a moment and be proud of the accomplishment. Just as appropriate, it would be a time for those who didn’t make the list to create a plan to grow and become a member of future PCT Top 100s as making this list is a milestone to be celebrated in itself.

The author, Daniel S. Gordon, is a CPA in New Jersey and owns an accounting firm that caters to PCOs throughout the United States. Visit www.pcobookkeepers.com for information about his firm, PCO Bookkeepers.

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Top 100 Firms Head to Chi-Town

For the second time in three years, PCT and Univar PP&S have partnered to present the Top 100 Awards Ceremony and Executive Summit. This year’s summit, to be held June 18-19 in Chicago, will feature a special reception honoring the PCT Top 100, as well as an Executive Summit featuring panel discussions on such diverse topics as “Reinventing the Pest Management Service Economy”; “The Bottom Line Benefits of Being a Socially Conscious Corporate Citizen”; and “Creating a Culture of Innovation.”

On June 18, a cocktail reception and dinner will be held at the Willis Tower (formerly Sears Tower), providing attendees ample time to visit the Skydeck Chicago and Ledge on the 103rd floor of the building.

Speakers for this event include Dan Moreland, PCT Media Group; Danny Myers, Myers Pest & Termite Services; Karl Kisner, Univar PP&S; Richard Ennis, The Steritech Group; Bobby Jenkins, ABC Home & Commercial Services; Alfie Treleven, Sprague Pest Solutions; Michael Katz, Western Exterminator Co.; Brian Cook, Cook’s Pest Control; Keith Smith, Action Pest Control; Cindy Mannes, Arrow Exterminators; Brent Boles, Schendel Services; John Wilson, Orkin USA; and Andrew Klein, Assured Environments. Qualifying companies interested in learning more about the event, can call 800/456-0707 or e-mail conference@gie.net.

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Good Growth for the U.S. Structural Pest Control Market

The U.S. structural pest control industry generated an estimated $6.524 billion in total service revenue in 2011, a 3.4 increase from the $6.307 billion measured in 2010. The top three U.S. service providers, Rollins, Terminix International and Ecolab, represented 40 percent of the total industry revenue for the termite and general pest market segments this past year.

Service revenue derived from controlling bed bugs grew 28.2 percent from the prior year, bringing the total revenue earned to $409 million. The five-year compound annual growth rate for bed bug service revenue is 33.1 percent. Single-family homes and apartments were the primary leading types of accounts pest control operators treated for bed bugs. Hotels and motels ranked as the third leading type of account with more than 10 percent of the pest control operators mentioning them. Slightly more than one-quarter of those servicing accounts for bed bugs report employing a monitoring device as part of their service.

Nationwide, PCOs reported an average charge for a bed bug treatment of nearly $600. The average charge was highest in the Northeast and lowest in the West region. The median charge nationwide was $480 for a bed bug treatment.

Nationwide, pest control operators reported good growth in both residential (+3.5 percent) and commercial (+5.2 percent) service revenue over the prior year. Total service revenue generated from termite work, including renewal fees, was unchanged from that measured in the 2010 market study.

One-third of the pest control operators surveyed reported using social media to advertise and promote their pest control business. Facebook, LinkedIn and Twitter were the leading social media platforms respondents used.

Total manufacturer level revenue increased 3.8 percent this past year. This is the second year of manufacturer level sales growth following the 2007-09 recession.

More than 800 owners or managers of pest control companies were interviewed for this study. The market report forecasts pest control service revenue through 2013 and corresponding pesticide product category sales through 2016. The impact of the commercial and residential real estate market, mosquito and wildlife management services, changes in distribution, and pest control operators’ expectations for 2012 are just a few of the topics analyzed in this year’s report.

Specialty Products Consultants, headquartered in Mendham, N.J., is the recognized leading provider of market research studies to the specialty pesticide industry.

For more information, visit www.spcresearch.com.
 

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Arrow Environmental Services Continues Its Rapid Growth

Arrow Environmental Services, Sarasota, Fla., (#82) has completed the purchase of the Naples-based family of the Shur-Shot, Alert Termite & Pest Control and Cape Coral Termite & Pest Control companies, dramatically growing its presence in Naples and Cape Coral.

The Shur-Shot acquisition, combined with three others throughout the past eight months, has helped Arrow grow into one of the state’s largest pest control companies, posting 60 percent growth in revenue over the past two years. Since 2010, Arrow has acquired eight companies with combined revenues of more than $4 million, and is on track to reach the $10 million mark in annual revenues by the end of 2012.

In addition to the purchase of the Shur-Shot family of companies, Arrow also has purchased these three other companies in the past eight months:

• Ant-Ser Termite & Pest Control, Port Charlotte, Fla., completed in February 2012
• AmerTermite, Sarasota, Fla., completed in September 2011
• Gardener’s Choice of SW Florida, Naples, Fla., completed in July 2011

Sarasota-based Arrow has been making acquisitions regularly for two years, fueling its growth. Arrow Chairman George Pickhardt and CEO Bill Hurd say they have succeeded with this strategy by focusing on acquiring smaller, well-run pest control firms around west-central Florida.

At the same time, Arrow is also looking at other ways to grow its business, which has customers from the Tampa Bay area south to Naples. For example, the company is pursuing opportunities to service more commercial real estate properties, and is working to expand awareness of its customer referral program.

“We’ve been very pleased that we have maintained our quality of service as we continue to grow,” Pickhardt said. “This is a testament to our employees, and also to the quality of the companies we have merged with.”

“I have been very impressed with how Arrow has served our customers since our merger,” said Jeff Ahrens, former president of Ant-Ser Termite & Pest Control, and now an Arrow employee. “A key for me in choosing a partner for an acquisition was quality of service, because I wanted to make sure our customers would continue to get quality, highly personal service. Arrow has delivered on that.”

For more information, visit www.arrowservices.com.
 

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Texas PMP Takes The Challenge To Build A Better Future For Hundreds Of Orphans

Before the devastating January 2010 earthquake, Haiti’s orphan population was estimated at 380,000. Following the disaster, experts have raised the number to double that or even higher.

For Raleigh Jenkins, president of ABC Home & Commercial Services, Houston, Texas (#36), Haiti has been a journey of highs and lows, but one he feels is far from complete.

Jenkins became involved with Haiti after joining other members of the National Pest Management Association on multiple trips to the country to provide much needed pest management services to hospitals and orphanages following the earthquake.

His involvement in the relief work inspired Jenkins, his family and close friends and business associates to continue the journey of creating a brighter future for Haiti’s orphans by establishing A Child’s H.O.P.E.

The mission of A Child’s H.O.P.E. is to provide a safe, loving and supportive home for the abandoned children of Haiti. The facility will give more than 300 children an opportunity to live in a family-style living environment that will differ sharply from the traditional orphanages of this Caribbean country, where children as young as nine years old are left to fend for themselves.

“This is not just another orphanage where kids are only fed and housed,” said Jenkins. “Our goal is to provide an environment aimed at giving kids a real shot at life in an educational, vocational, recreational and spiritual way.”

The facility will accept children in groups of 20 or 30 to start, and feature education, athletic and medical facilities to create an “academy” feel for the children. Jenkins said plans call for the children to be raised in family units ranging in age from infants to late teens, and the facility will have a full-time staff of teachers, counselors, agriculture experts and medical professionals who live at the facility.

“We want to make the facility self-sustaining and teach the children how to eventually support themselves,” said Jenkins. “We plan on doing our own farming and ranching, and establishing a jewelry and craft business to create additional means of support.”

Jenkins hopes to have shovels in the ground soon for the facility but is now focused on fundraising efforts. A series of fundraisers will be held across Texas and Jenkins plans on appealing to the entire pest management industry for their support as well.

A Child’s H.O.P.E. has established a website — www.achildshope.org — to keep the industry informed on the progress of the project and for information on how to get involved.

Based in Houston, Texas, A Child’s H.O.P.E. is a non-profit organization focused on providing a better future for the children and country of Haiti.
 

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Copesan Partners Net Long-Term Rewards Using Net Promoter

A simple question has become a movement. A mindset. A management tool so powerful that executives from innovative firms as revered as Apple, Zappos, eBay and Rackspace have made it an integral part of their day-to-day operations. It’s called “The Ultimate Question,” and it leads to something called a Net Promoter score (NPS), a measure of an organization’s ability to satisfy customers so completely that they become loyal promoters of the organization.

What is this powerful question?

On a scale of zero to ten, how likely are you to recommend us (or this product/service/brand) to a friend or colleague?

The customer’s answer to this question places him or her into one of three categories: a promoter (9-10 score), who is so satisfied with your company he or she would recommend it; a passive (7-8 score), who is relatively satisfied but not enthusiastic about your company; or a detractor (0-6 score), who is dissatisfied, and possibly dismayed with, your organization.

Opening a dialogue with every one of these customers is critical, says Fred Reichheld, author of “The Ultimate Question 2.0: How Net Promoter Companies Thrive in a Customer-Driven World.” He recommends you do that by asking one follow-up question: What is the primary reason for your score?

“Success in business and in life should result from your impact on the people you touch — whether you have enriched their lives or diminished them. Financial accounting…completely ignores this fundamental fact,” says Reichheld. “I created a new way of measuring how well an organization...generates relationships worthy of loyalty. I called the metric Net Promoter score, or NPS.”

Since its introduction in the Harvard Business Review in 2003, the NPS has grown from a score into an entire system — a system designed to fuel ongoing business growth through sustainable “good profits,” or profits earned by providing customers with a consistently excellent experience.

In the pest management industry, the Partner network of Copesan has put NPS to the test.

“We get very solid grades, but we recognize that the score is only part of it. Much more enlightening are the comments people provide as follow-up. This feedback gives us real insight into how well we’re meeting expectations and providing a consistently superior level of service,” says Jim Schmitt, director of quality assurance at Wil-Kil Pest Control, based in Sun Prairie, Wis.

Wil-Kil asks not only What is the primary reason for your score? but also What could we do to improve that score? They share the information collected with regional managers for follow-up.

“The information we collect from clients helps us see the big picture, particularly in the area of where training opportunities exist,” says Copesan President Deni D. Naumann. “The key to profiting from NPS is embracing it — not just asking the questions but documenting the answers and using them to make improvements. You don’t have to be a multimillion-dollar organization to use NPS; if you care enough to ask the questions and then follow up on them, you’re going to see a return.”

Copesan encourages its Partners to ask the Net Promoter questions via phone call rather than by postcard or email survey. Naumann cites two reasons for this approach: (1) it becomes another opportunity for direct human interaction with the client, and (2) it gives the interviewer the opportunity to probe further rather than just accepting the brief answer the customer might have written in the postcard space.

Schmitt concludes, “The Wil-Kil culture is based on building relationships and cultivating loyalty. NPS provides a metric for tracking our progress as we work toward our ideal of converting every customer into a loyal promoter.” — Donna DeFranco
 

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Add-On Success For Top 100 Firms

What’s the most significant trend for firms on this year’s PCT Top 100? Service diversification.

A growing number of companies attributed five to more than 30 percent of revenue to services “other” than general pest or termite control.

Consider #78-ranked Triple S Services of Manassas, Va. Remodeling construction was “good little add-on,” said President Tony Sfreddo. The division brought in $1.2 million dollars last year alone.

Pacific Coast Termite in Tustin, Calif., #48 on the list, gained $1.17 million or 10 percent of total revenue from its wood repair division, said Co-Owner James Grande. The company has added skilled carpenters every year to meet demand.

Ranked #54, Northwest Exterminating in Tucson, had 31 percent of revenue come from landscape maintenance, a division President Chad Berg started 12 years ago.

Why do companies diversify? To make money, of course.

Sfreddo began offering remodeling service in 1991 when he realized the company could gain from performing termite repair work instead of giving it away. He brought on a contractor, who runs the Class A licensed division.

All bird control, exclusion and nuisance wildlife repairs are handled by the division, which also builds decks, paints, replaces roofs and clears snow for homeowner associations and businesses.

“It’s a good fit,” said Sfreddo. Employees with construction background “are much more adept” doing structural modifications and making repairs look aesthetically pleasing.

His pest customers become remodel customers and vice versa. The division has done well in the bad economy, Sfreddo added. Instead of selling and buying new homes, customers stayed put and fixed what they had.

Pacific Coast Termite, whose carpenters replace wood destroyed by termites or fungus, was founded in 2007. Customers prefer doing business with one company they know stands behind all its work, said Co-Owner Dennis Wilson.

T.A.P. insulation makes up another seven percent of revenue. It’s mainly sold as an up-sell when technicians notice an attic is under-insulated or insulation is rodent infested.

Berg realized the construction boom in Arizona eventually would fade and the company needed a supply of recurring monthly revenue to thrive. When he joined the company in 1992, revenue was 90 percent pre-construction treatments. The company diversified into general pest and weed control, but pretreats still made up 78 percent of revenue when Berg bought the company in 1999.

The next year he followed his passion for landscaping — he mowed lawns from age 10 through his college years — adding commercial landscape maintenance to his repertoire.

Add-on services helped Berg shift from four construction clients to thousands of monthly customers, and ultimately survive the housing crash. “We didn’t grow but we maintained revenue because of diversification,” said Berg. Today pretreats are five percent of income.

Adding pool service is next on Berg’s list. “If you do well at one thing, most likely they’ll use you for something else.” With 6,000 customers, pool cleaning “is a no-brainer for us.”

Wood repair and insulation always will be secondary to Pacific Coast’s termite business, though “we want to grow in all areas,” Wilson said. Expanding further into general pest control is unlikely.

Triple S Services will focus on pest and termite control, but its remodeling division soon could catch up to termite revenue, said Sfreddo.

Berg is modeling his expansion on Austin, Texas-based ABC Commercial Services, ranked #19 on the Top 100 list. Seventeen percent of ABC’s $39 million in revenue is from handyman, pool, HVAC, plumbing and electrical services.

Like ABC, Northwest Exterminating targets one geographic area, which Berg said lets him control service quality and efficiency. “You can only do so many pest control jobs in one area,” so he intends to grow by selling more services to the same customers. — Anne Nagro
 

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Action Pest Control: Rewarding Performance Boosts Growth

Last year, revenue at Action Pest Control in Evansville, Ind. (#61), rose a whopping 24 percent.

Bed bug work accounted for a small amount of growth, but the big payoff came from internal changes.

Specifically, the company realized its goal of becoming performance based, said President Kevin Pass.

Led by Chief Operating Officer Keith Smith, the company developed incentive programs and “productivity goals for everybody.” Pieces of the program were introduced over two years, but in 2011 the program clicked.

Salespeople were incentivized to sell additional services and were given an escalating scale of commissions.

The results, said Pass, were outstanding. “We had salespeople hitting levels that they’ve never hit before.”

Another program rewarded technicians for turning in referrals. They got half the commission for referrals that turned into sales simply by asking if customers wanted to learn more about other Action services, like insulation or bed bug warranties.

Referrals are considered “gimme sales” because the customer already trusts the company and has indicated interest.

The salesperson only needs to “show up and not get in his own way” to close it, Pass explained. Except for the commission, the company has no marketing costs.

Salespeople are fine with splitting commissions because they’re easy sales to close, he said. Technicians now view selling in a positive light and realize they can benefit significantly from it.

Big screen TVs are a favorite motivator. Action gave away six last year to encourage sales of new services or compliance with new policies. A $500 television is an affordable way to increase revenue or change behavior, explained Pass.

Action Pest Control also offers incentives for quality. “You don’t want to sacrifice quality for growth,” Pass said.

The performance-based program “has helped get everybody involved in growing the company,” said Pass, who admitted to writing some big incentive checks to employees.

“I’m happy to have those people on board. You can’t have a successful service business without happy people,” he said. — Anne Nagro
 

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Western Exterminator Puts Customers’ Pests In Focus

Proper insect identification is essential for any PMP looking to solve a customer’s insect problem. Without knowing exactly what insect is present, trying to eliminate or prevent it from entering a home or office, and developing an effective control plan, is next to impossible.

The technical side of pest management has long been an important element at Western Exterminator (#11), founded in 1921 and headquartered in Anaheim, Calif. Western established its Training & Technical Division in the late 1960s, placing an emphasis on education long before it was an industry expectation.

The firm continues to invest in training and education, and has now taken a basic industry tenant, like pest identification, to the next level with the purchase of a Nikon SMZ 745T high-powered microscope. The microscope helps Western’s team of entomologists and sanitarians make faster and more accurate identifications of the 1,300+ insect samples they receive annually from technicians and customers.

According to C.J. Strom, Associate Certified Entomologist and Western’s vice president of quality, this isn’t your typical junior high biology class microscope. The microscope can zoom in on an insect at 500X magnification and allows the company’s technical team to pinpoint the exact type of ant, cockroach or spider that is infesting a customer’s home or business.

Another unique feature of the microscope is that it also takes high-resolution, detailed digital photos of the insects in question, which Western’s technical staff can then share via e-mail with technicians in the field and directly with customers.

The high-resolution photos are used by technicians to help educate and explain to customers what insect they have in their home or business, and what steps are needed to prevent it from coming back.

“It gives our technicians, and even our sales staff, an edge when sitting down with customers and explaining the results of our inspection and recommendations for treatment,” said Strom. “Having a visual aid of this caliber is a real benefit. When a customer opens the file on their computer, mobile phone or iPad there is a real ‘wow’ factor. The level of detail we can now provide to them is just incredible.”

Western’s technical staff also provides basic behavior, biology and control tips when returning the image to the technicians in one of the company’s 35 service centers in Arizona, California and Nevada, giving them more valuable information to share with customers.

The company is also promoting on its website (www.westernexterminator.com) that if a consumer sends a specimen of a bug they find in their home or business to Western’s lab, they will receive an e-mail back with the magnified picture of the bug and, if applicable, consumer tips for control. “We love to share our knowledge of the pest world,” said Strom, grandson of founder Carl Strom.

Strom said in addition to improving the accuracy and speed of the identification process, the microscope also helps the technical team rule out what pests are not present in the account. “An incorrect identification can be very costly in terms of callbacks and customer dissatisfaction,” said Strom. “Being able to rule out the presence of certain pests, or if pests are present at all, helps us design a treatment solution faster for the customer.”

Strom added that Western’s lab does, on occasion, receive specimens from customers that turn out to be nothing more than “dust bunnies” and pose no threat.

Strom said no matter the species of insect, Western’s lab can identify what is or is not present in the account. “It gives customers peace of mind to know if the insect they found doesn’t pose a threat to them. That of course is worth a lot to someone concerned about their family or business,” he added. — Jeff Fenner
 

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Dog Heat Dog World: Sniffing and Snuffing Out Bed Bugs

As the pest management industry continues to find new and better ways to combat the resurgence of bed bugs across America, Wil-Kil Pest Control, based in Sun Prairie, Wis. (#39), has combined canine detection and heat treatment with exceptional results.

The program, called Dog Heat Dog World, entails a thorough canine inspection, a heat treatment to kill any bugs and viable eggs, and a follow-up canine inspection to ensure no bugs remain. If additional bugs or eggs are discovered during this follow-up inspection, the heating process is repeated.

“Customer demand pushed us to investigate a canine detection program back in 2008; since instituting Dog Heat Dog World, our business has flourished,” says Wil-Kil Regional Manager Randy Allen, who leads the bed bug inspection team at Wil-Kil. “We increased our bed bug business by more than 40 percent 2011 over 2010, and so far in 2012, we’re already up more than 36 percent over 2011.”

Wil-Kil’s dogs, Max and Daisy, are certified annually by the National Entomology Scent Detection Canine Association (NESDCA) and detect bed bugs and their viable eggs with 98 percent accuracy in a controlled environment. Their training focuses on the detection of live bugs and eggs, because that’s the only way to ensure valid follow-up inspections. Were the dogs to respond to dead bugs, the follow-up would be invalid.

Critical to the success of this program, says Allen, is an unwavering commitment to handle the dogs 365 days a year. Max and Daisy never eat from dog dishes; they are hand-fed in reward for doing their job. Their handlers plant bugs in their homes every night, and the dogs work to detect these “blind hides.” This level of ongoing training is extremely important because if the dogs are not working to find bed bugs every day, they could possibly lose their edge.

Allen explains, “The most important thing we’ve learned is that you need to have committed handlers; they can’t work dual roles. For a while, Rick Schoening would work with Max when we had business to support him, but Rick did pest control the rest of the time. Max wasn’t engaged and ended up sitting down on the job. The training academy told us he needed more work, so we ramped up our marketing efforts to keep him working full-time. Now he’s incredibly motivated — and accurate.”

Likewise, Wil-Kil has a dedicated team addressing the heat treatment aspect of the Dog Heat Dog World program. Regional Manager Jim Gilbert, who heads up heat treatment efforts, says, “Bed bug technicians have a unique mindset. They are different from most pest control technicians in that they are mechanically oriented. The best candidates aren’t those who look at this job as turning heaters on and off. They are the ones who go in understanding that the success of their efforts depends on their conscientious manipulation of the environment. Our due diligence in handpicking the right people has paid off in effectiveness and customer satisfaction.”

Rounding out the Wil-Kil team’s bed bug efforts is the Bed Bug Boot Camp, an educational program for customers and prospects who want to learn more about the prevention and treatment of bed bugs. The free three-and-a-half hour seminar draws accolades and strengthens relationships.

“Our Boot Camp adds another layer of credibility as we discuss biology, inspection, control methods and even legal liability. We also do a demonstration with Max and Daisy,” says Allen. “You can feel client confidence grow as they participate in the seminar. Boot Camp is an outstanding means for building customer loyalty.” — Donna DeFranco
 

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From the desk of John Bolanos

Dear Pest Management Professionals,

For more than a decade, the significant achievements of the top companies in our industry have been recognized and celebrated in PCT’s Top 100 List, the annual rankings by service revenue of successful, long-established firms, as well as the rising stars in our business. And it’s that time again.

Congratulations to all of the great companies included in this year’s Top 100 List for their outstanding performance in 2011, as well as to all of the standout firms that have been so honored in years past. It’s truly an accomplishment worth celebrating!

Univar PP&S is proud to have contributed to the success of many of these impressive companies, and we’re pleased to continue our sponsorship of PCT’s Top 100 List, including the commemorative poster featured in this month’s issue of the magazine. Refer to it throughout the coming year for helpful information about your colleagues within the pest management industry and as a source of inspiration to reach new heights of personal and business success.

Univar is dedicated to serving our customers by being their one source with the countless resources needed to be successful in a highly competitive marketplace, offering the industry’s most extensive product portfolio, innovative technology, comprehensive educational resources, and experienced industry professionals providing valuable technical support.

As another exciting year unfolds, you can count on our team to be as focused as ever on your success. Whether you’re a promising new business looking to break into the Top 100 or an already highly acclaimed enterprise, Univar stands ready to help you climb higher.

Remember, we’re more than just a supplier. We’re a trusted business partner, connecting you to all of the tools and resources necessary to be successful both now and in the future. Let’s succeed together!

Sincerely,

John P. Bolanos
President
Univar PP&S