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ABOUT THIS YEAR’S LIST The articles that accompany this list (beginning on page 45) were written by Dan Gordon, Lisa McKenna and the PCT staff. Gordon is a CPA in New Jersey and owns an accounting firm that caters to PCOs throughout the U.S. (www.pcobookkeepers.com). McKenna is a frequent contributor to PCT.
PCT made every effort to identify and contact companies that should be included in the list. If your company should (or if you know of a company that should) be listed, contact Jodi Dorsch at jdorsch@giemedia.com. A few notes on this year's list.
Click here to access this year's list.
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The Flip Side
In 2009, many PCOs’ revenues were down but profits were up. Here’s a review of how and why that happened (as well as some other financial surprises!).
How has your firm weathered this economic downturn?
There is no question that the world has suffered a severe economic downturn with the housing crisis, which led the U.S. economy into decline. The credit crisis, the stock market volatility, the implosion of the auto industry and the bleak employment situation has changed many PCOs’ business posture from budgeting for near-term growth to budgeting for near-term profit without growth.
There is no shortage of opinions as to whether we are out of the woods, if there will be a double-dip recession or if the economy is on the mend. If you speak to high-end retailers, home builders and companies who supply the auto industry, they will tell you how difficult things have been and how there is no end to this downturn in sight. Talk to those in value retailing, banking and home service businesses and it’s a different story. Even in a recession, people need to eat, clothe themselves and transact business. If they own homes, these homes need to be maintained. While people are doing more with less, life still goes on.
Market Observations. In more than 20 years of being involved with the pest control industry, I’ve worked with several dozen pest control companies around the country as a CPA and consultant. During this time I’ve been through several recessions and watched revenue growth slow (but not like this) and never negative growth. This time it’s different. This time what I’ve seen in my client base is that 2009, for the most part, was not a year of revenue growth. In fact, with a few exceptions, most clients were revenue neutral or down a few percentage points.
While this lukewarm assessment of our industry in "normal times" is no great shakes, it is really exciting news especially since many industries have been decimated by this "great recession." Some industries are down 40 and 50 percent and more. The real testament to the pest control business model is the following observation that I’ve seen almost without exception across my client base: Revenue may have been flat or down slightly in 2009 but profits were up.
While the whole world was preparing for economic Armageddon, PCOs tightened their belts and prepared for the worst. Those adjustments were stronger than the overall negative darts the economy shot at them, allowing them to increase profitability in the worst economic crisis since the Great Depression.
While most in the media speak of the U.S. economy as if it’s one large economy, our economy is actually made up of several regional sub-economies, some having been hit harder than others. This being said, there are some PCOs who have been driven to the brink of business failure while many others have increased profits, even in the hardest hit geographic areas.
Having clients in these hard-hit areas, I can attest to the fact that those PCOs who continuously offer the right services to the right market continue to see demand. While perhaps demand isn’t as robust as it was a few years ago, nevertheless there is demand. People need to protect their homes, their businesses and the food supply no matter how bad things get. Many times we also forget that 10 percent unemployment means 90 percent employment. It’s this 90 percent that create the demand for goods and services.
The New Model. When I entered the pest control industry more than 20 years ago as a pest management firm owner, the model was much different. Back then, success included putting a large advertisement in the Yellow Pages and waiting for the spring when the termites swarmed. The phone would ring, the work was done and the renewal base was built. In addition, every real estate transaction (including refinances) needed a termite inspection which, in many instances, required a termite job.
For the past several years, termite swarms have been on the decrease and the Yellow Pages have been challenged by the Internet and other direct response advertising. While many companies that maintained an increased focus on termite work saw growth slow, it wasn’t until this recession, which was caused by a collapse in the real estate market, that the nail was put in the coffin of this pest control company business model.
Those companies that have standardized services, offered on a periodic basis supported by a signed service agreement, seem to be faring better than those who don’t use a recurring revenue model. In fact, what I’ve noticed over the past several years is that some of the more successful companies offer a pest service plan that includes termite coverage. Offering this type of termite insurance imbedded in your service plan creates more termite work (albeit combined with general pest control) in an otherwise shrinking termite market.
The Road Ahead. The good news is that we are seeing good profits in this economy, but revenues have not grown. This seems to be the best possible result in the current environment. However, we can’t grow our companies long term by cutting costs. It’s a nice lesson for many of us to operate at increased levels of efficiency but the only way we can increase the value of our business is by growing our top line while maintaining good profits.
The most encouraging aspect of the current economic situation is how the industry as a whole is reacting to the economic slowdown. The change of attitude is reflected in the fact that although profits are up, PCOs are showing prudence by taking this opportunity to ready them for the inevitable upturn. They seem to be addressing collection issues, buying smart and reinvesting those profits in new vehicles, new equipment, more sales staff and sales training. These are the building blocks used to build a foundation for future revenue growth.
I’ve always been told that the pest control industry is recession resistant. When the U.S. financial system, the housing market and the auto industry fell apart in late 2008 and into 2009 and the whole economy was in meltdown mode, it was "the boring industries," the ones with recurring revenue models and little fanfare, that came through with very few scars. Thank goodness we are part of this group.
The author 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 Gordon’s firm, PCO Bookkeepers. He can be reached at dgordon@giemedia.com.
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The majority of companies on PCT’s Top 100 list posted revenue growth amid some of the worst economic conditions in recent memory. Here’s how these industry "rock stars" made it happen.
2009 brought continued bad news on the financial front for most U.S. businesses, from rising unemployment to lending cutbacks and record low consumer confidence levels.
Many American businesses found cause to cut in any way they could, laying off workers, trimming payrolls or even shuttering their doors, much as record numbers of homeowners walked away from their homes. All would seem to be grave news for an industry that depends on these same groups for its lifeblood.
But while the pest control industry certainly suffered its own casualties, it wasn’t by a landslide. About 60 percent of the companies on PCT’s Top 100 list posted revenue growth in 2009, amid some of the worst economic conditions experienced in recent memory. When we talked to some of those firms, some key general trends began to emerge. Here’s how a sampling of companies made the best out of a bad situation.
ADVERTISING IS GOLDEN. Many companies took the opportunity in 2009 to ramp up their advertising, often to surprising effect. OPC Pest Control, Louisville, Ky., increased its revenue by a whopping 12 percent in 2009, and president Donnie Blake says his super-charged ad strategy was a big reason why.
The company completely redesigned its Web site to be more user friendly and interactive, and for the first time invested in search engine marketing programs such as pay per click advertising.
OPC also dramatically increased its spending on outdoor advertising, purchasing a six-month expressway billboard that was rotated on major interstates in downtown Louisville. This was in addition to the 22 smaller boards the company had in neighborhood areas. "We’ve been doing the local, minor arterials for quite some time," said Blake of his outdoor advertising. "We decided we really wanted to create a presence and make a statement."
Blake said the company’s billboards are hard to miss, featuring large insects and the company’s name in big red letters. "They’re very cost-effective," says Blake. "People will tell you — particularly when you put a big American roach on the billboard — they will call and say, ‘That’s the ugliest thing I’ve ever seen. Can you come to my house?’"
OPC also placed ads on about 40 transit buses serving the metro Louisville area, and those have delivered amazing results, he said. One advantage of the buses over other ad mediums, Blake says, is that ads can then be targeted in specific residential areas. "I really wouldn’t have believed how much the transit ads would have [done] until we did it."
American Pest Control, Hanna City, Ill., invested in a similar form of advertising in 2009 when it ad-wrapped a service vehicle in the company’s newer southern Illinois route. "We got all kinds of response to that," said Doug Hillman, residential services supervisor. The company also put its phone number and Web address on the tailgates of its trucks, and updated its Web site. In addition, American decided to advertise on a Christian radio station in Peoria that has grown in popularity, Hillman said, particularly among female listeners. "That generated a lot of business," he said.
Meanwhile Glen Rollins, president of Orkin and vice president of its parent company Rollins, observed that advertising was one of many areas that proved to be a buyers’ market in 2009. Besides Orkin, Rollins also owns HomeTeam Pest Defense, Western Pest Services, Crane Pest Control, the Industrial Fumigant Company and PCO Services. The company saw its revenue climb by 5 percent last year.
Rollins said the company took advantage of lower ad prices in 2009. "It definitely was less expensive than the prior year," he said, for a number of reasons. "In ’09 you didn’t have an election, you didn’t have an Olympics and you had a weak economy. So all of those factors put downward pressure on media prices."
SALES SQUEEZE. Many companies took a fresh look at the sales effectiveness of their employees in 2009. Ralph Morse, general manager of National Exterminating in Newport News, Va., said his company was able to grow its revenues by transitioning its technicians to provide all services from one vehicle, as opposed to being category-specific. "The new system turned our vehicles into profit centers," Morse said. One technician, with one truck, generated the revenue of multiple vehicles, he said.
The company also cross-sold its services among existing termite and pest control customers that did not have both, a move that worked well. Multiple services being purchased by the same customer resulted in increased revenue, reduced costs and a potential savings for the customer, Morse said. Along with these cross-selling efforts, the company also decreased its advertising budget by almost half, while doing a bit more clover-leafing in its neighborhoods. "Our ability to diversify and generate revenue in an existing customer base allowed us to grow without spending huge amounts on advertising," he said.
Meanwhile, lead closure is a top priority for PermaTreat of Fredericksburg, Va., says CEO Joe Wilson. "We track our leads that come in with a death grip until that lead is either sold or it’s dead," he said.
PermaTreat suffered losses in its pretreat and termite businesses, but still was able to grow by almost 7 percent, thanks in part to selling ancillary services such as insulation and gutter protection systems. These were offered prior to 2009, but PermaTreat worked harder at selling them last year, Wilson said.
Kevin Pass, president of Action Pest Control in Evansville, Ind., already had bundled his pest control and termite services for many customers in late 2008, so in 2009 the company continued to reap the benefits of that move. The company earned a 5 percent increase in revenues, and Pass attributes that in part to upping his service frequency from four to six visits a year. Besides bringing in additional revenue, the increased schedule also improved customer satisfaction and provides more coverage.
Pass said the bundled service resonated especially well with pest control customers who didn’t appreciate finding out that they had termites but weren’t covered. "Because of the changes in termite control and the ease of treatment," he said, "we just decided to bundle the two together and it’s worked out really well." Pass said the bundled program was being offered to all new customers, and about 20 percent of existing clients had snapped it up.
COMMERCIAL IS COOL. Commercial pest control business apparently weathered the economic storm better than did the residential market, as evidenced by some companies that specialize in that area. Mark Jarvis, CEO of The Steritech Group based in Charlotte, N.C., said the company was able to take advantage of pending food safety legislation and the growing concerns around the efficacy of quality management systems in the food industry in 2009.
Jarvis said a key factor for Steritech was its ability to deliver a truly differentiated service that ultimately led the company to gain market share in 2009. Furthermore, Jarvis said Steritech encountered many customers that were willing to invest in premium services to better protect their brands. "There are companies out there, even in a down economy, that are willing to spend money on quality."
One game-changing event for this industry, Jarvis said, was the January recall of peanut products from Peanut Corporation of America due to salmonella contamination, which ultimately affected more than 3,000 products from numerous manufacturers. Rodent and bird infestations at PCA were implicated as contamination sources.
Jarvis says these days, clients with "bare bones" pest prevention are rethinking those programs, and it’s to Steritech’s benefit. "We’ve been really focused on companies which have a renewed interest in public health and safety and who we believe are willing to spend the money to better protect themselves and their brands."
Rollins agrees commercial customers are continuing to raise their pest control standards. "We find it easier to get them to recognize the importance of our services and sanitation and food safety," Rollins said. Likewise, the company’s commercial sector grew faster than residential in 2009. "The residential consumer was really very cautious in 2009 and so it was easier to get new business customers than to get new homeowner customers," Rollins said.
Stacy O’Reilly, president of Plunkett’s Pest Control, Fridley, Minn., notes that her company’s presence in the nation’s grain and corn belts had a lot to do with the company’s 7 percent gain in 2009. "In the Midwest we’re more of a farm-based economy," she said. The company serves customers located in seven states in the upper Midwest. "In commercial we just never had a dramatic period where lots of clients were going bankrupt or otherwise," she added. "Most restaurant and food plants just need pest control as a standard course of business." And at a cost ratio of less than 1 percent of expenses, pest control would rarely be the first line item scrutinized.
A BURST OF BED BUGS. O’Reilly said another part of Plunkett’s success story in 2009 was its commitment to use heat treatments to control bed bugs, beginning in mid-2008. She was surprised by how well the service resonated with customers. "When they heard that it would cost $500 to monkey with bed bugs for two months or $1,500 to be done with bed bugs in a day, most clients chose the one and done service," O’Reilly said. The "gold level" service required an upfront investment of $80,000 per truck and trailer combination that contains everything needed to heat treat homes and apartments.
O’Reilly said she at first underestimated how successful the gold level option would be. "I thought maybe 10 percent of my clients would want it," she said. As it turns out, the majority of her bed bug customers are choosing this option. Now the company has seven of these heat treatment teams. "Bed bugs were half my growth," said O’Reilly, "which is a big deal for me."
Similarly, Cooper Pest Solutions, Lawrenceville, N.J., experienced 30 percent growth in its bed bug sector, says President Phillip Cooper, and its Bed Bug Central Division more than doubled its revenue. "Bed Bug Central was a traditional consumer resource," Cooper explained. Then in late 2008, that division was broadened. "Our business plan goes after five different vertical markets of which the pest control market is one."
STAFFING SHAKE-UPS. A number of PCOs said they took advantage of the weak job market to snap up some talented individuals in 2009, and these new hires often paid off. Cooper did just that. Besides replacing a few key management positions, Cooper also restructured the company’s entire customer service department. "We expanded our staff and pressed our current staff to work smarter," he said. "Everyone knew if they worked smart there would be no changes but if they did not work hard and smart, they would be replaced with better talent."
Some PCOs also made incentive-driven pay changes designed to affect the top line. Action’s Pass increased the commission to technicians bringing in leads that were ultimately sold. He also gave his technicians a bonus for achieving route completion and another bonus for low cancellations. On the flip side however, technicians stood to lose a percent or two if they didn’t do those things. "It usually only has to happen one time before they get the picture and manage their routes better," said Pass.
Similarly, Myers Pest and Termite Services based in Bedford, Texas, focused on lead generation and sales follow-through in 2009 by upgrading its sales compensation package, said Vicki Hummel, corporate director. Salespeople got a progressive level increase, she said, so the more they sold, the higher percentage they could earn. "That definitely had an effect — a positive effect — on our sales," Hummel said.
Finally, cutbacks in the pest control industry weren’t unheard of in 2009. For instance, Steritech made the decision to eliminate the bottom 10 percent of its sales performers, said Jarvis, and those individuals were not replaced. "We took the opportunity to be much more performance driven," Jarvis said.
SWEET SUCCESS. At the end of the day, growing PCOs also found the health of their local economy can play a supporting role, but only to a point. PermaTreat’s Wilson observed that being located near the nation’s capitol was fortuitous. "We have three large military bases and lots of federal dollars," he said.
Conversely, Cooper says the bad economic situation was keenly felt in his part of the world, but that just made the journey more rewarding. While others obsessed about the economic doom and gloom, Cooper and his staff rolled up their sleeves. "We were not going to let the economy beat us down," he said. What’s more he said, "company morale was at its highest it’s ever been."
Send an e-mail to the author at lmckenna@giemedia.com.
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#6 Clark Pest Control Awarded
for Innovation
Clark Pest Control, Lodi, Calif., recently received the Integrated Pest Management Innovator Award from the California Department of Pesticide Regulation. This award is given to organizations that develop and promote methods of pest control that reduce the overall use of pesticides and adopt IPM techniques.
"IPM Innovators are role models for change from traditional pest control to strategies that reduce or eliminate toxic pesticides," said DPR Director Mary-Ann Warmerdam. "One of our missions is to encourage through recognition the use of pest control methods that are more protective of public health and the environment. We especially applaud Clark Pest Control for its efforts to find a replacement for pyrethroid pesticides for residential pest control," which has been an issue in California in recent years.
Clark Pest Control says it always has strived to be on the cutting edge of the industry and is dependent on non-chemical treatments. Clark has a large-scale IPM program in which each of its technicians performs a site evaluation and a customized service plan, which reduces the overall use of pesticides. Clark expects to have the entire company performing this service within three years, it reports.
In addition, Clark helped to develop NPMA’s GreenPro and was one of the first companies in California and nationwide to become certified. Clark Pest Control has more GreenPro certified technicians than any other pest management company in the country, the firm reports.
Clark is one of eight organizations to receive the award this year.
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#12 Massey Services Celebrates 25th Anniversary
Massey Services, Orlando, Fla., recently marked completion of its 25th year in the pest prevention, termite protection and landscape services business.
The company was established with the purchase of Walker Chemical & Exterminating Company on Feb. 20, 1985, in Orlando, Fla. With the recent acquisition of Middleton Lawn & Pest Control, Massey provides services to more than 300,000 residential and commercial customers from service centers throughout Florida, Georgia and Louisiana.
During the company’s annual banquet in February, Harvey L. Massey, chairman and CEO, and Tony Massey, president and chief operating officer, thanked team members for their continued commitment and contributions to the company. "The foundation of Massey Services has been built upon total customer satisfaction and environmental responsibility," said Harvey Massey. "As a result of the hard work and efforts of our team members, and their commitment to providing quality service, today, our organization is better positioned for future growth."
"As proud as I am of the company’s success thus far, I know Massey Services’ greatest accomplishments are still ahead of us," said Harvey Massey. "With the continued confidence of our customers and the loyalty and dedication of our team members, our company stands poised to continue growing and providing outstanding service for many years to come."
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#94 First Person: Stuart Aust’s
Top 100 Goal Realized
I’ve made becoming a part of PCT’s Top 100 pest management companies a business goal since the inception of this ranking in 2002. I’ve shared my passion of being in the Top 100 with my employees at regular staff meetings and annual Christmas parties. I’ve placed a small sign above my desk that says, "PCT Top 100" just to remind myself of this goal daily.
Bug Doctor Termite and Pest Control was founded in 1992 and is based out of Paramus, N.J. Bug Doctor’s annual growth has averaged 15 to 20 percent per year since the start of the company and continues to expand. While a percentage of our growth can be attributed to the acquisition of several small companies along the way, much of our success has been achieved the old-fashioned way: hard work, aggressive cold calling, quality service and consistent follow up with each customer.
Some of the accounts we service today are Yankee Stadium, Citi Field, Madison Square Garden, Rockefeller Center, the U.N., the Intrepid, the Metropolitan Museum of Art and the French Embassy. Bug Doctor Termite & Pest Control performs pest management services in New Jersey, New York and Pennsylvania. Our bird division, Bird Doctor Nationwide, provides service throughout the U.S. Our animal division, Animal Doctor, services New Jersey, New York, Pennsylvania and Connecticut. Bug Doctor is known for its fleet of "doctored" vehicles that patrol the Northeast. Our add-on service divisions, Bird Doctor Nationwide, Mosquito Doctor and Animal Doctor, have significantly contributed to our bottom line. Our most recent division, Bed Bug Doctor, is close to being rolled out along with some other divisions still yet to come.
I also attribute Bug Doctor’s success to the invaluable training experience I gained prior to starting my company as a service manager for Terminix and commercial sales representative for Western Pest Services more than 20 years ago. Since then, my philosophy for growth has been built on door-to-door cold calling for acquiring commercial accounts. I remember parking in downtown business districts and hitting the pavement. I would hand out business cards, magnets, brochures and ask the same question, "May I give you a price for pest control services?" The old-fashioned way is tried and true and I still have many of the same customers since the early days. I continue to hand out business cards to everyone I meet because even if they don’t need pest control services, someone they know probably does.
Over the years I have also learned the importance of being surrounded by the best professionals money can buy! That starts with a solid management team. It took time and some hiring mistakes to find a team that is progressive, contributes solid business solutions and shares my business philosophy and work ethic. I am proud and blessed to have such a management team. It has been an amazing journey watching Bug Doctor grow over the past 18 years.
If anyone would have told me then that my company would be in the PCT Top 100 today I never would have believed it! But it’s a reality that has come true for me and my firm. — Stuart Aust, president, Bug Doctor Termite & Pest Control, Paramus, N.J. Visit www.bugdoctorinc.com for more.
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#2 CNBC’s Jim Cramer Shows Orkin Some Love
Jim Cramer — the high-energy host of CNBC’s "Mad Money" — is bullish on Rollins, parent company of Orkin Pest Control. On a broadcast that aired in February, Cramer asked his viewers, "Why should you care about Rollins? For the same reason we do, it’s the third-biggest dividend booster on our list."
Rollins raised its dividend by 28.6 percent, to 9 cents a quarter from 7 cents, resulting in an annualized payout of 36 cents and a 1.8 percent yield. "We like to see earnings that are more than twice the size of the dividend," he said. "Rollins passed that test with flying colors."
Cramer also noted that Rollins is a cash generator that averages $76 million in free cash flow a year, an impressive number by any standard. And the company’s latest initiatives are to focus on improving customer retention and increasing its sales yield through better closure rates, promising even better days ahead.
"Rollins is just a dull, totally consistent, boring company in a gross line of work that generates lots of cash and keeps improving itself. There’s nothing the matter with that," he said. "Hey listen, if we want excitement, we can go to the movies!"
A graduate of Harvard Law School, the former hedge fund manager is also bullish on the pest control industry as a whole, which should warm the hearts of every PCO, not just Orkin executives. "This is not a business that needs a good economy to make money," he observed. In addition, "It’s not one that should suffer if we get a dreaded double-dip recession, even as I think that’s only a very remote possibility." Booyah!
To view the entire broadcast featuring Orkin Pest Control, visit www.cnbc.com/id/35357343.
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#59 Eradico Endures a Challenging 2009
Eradico Services, Novi, Mich., has been in business since 1931, which means the company has operated during the region’s economic peaks and valleys. To say that the past few years have been an "economic valley" is an understatement. Michigan’s March 2010 unemployment rate was 14.1 percent – a figure it’s been hovering around since summer 2009. This unemployment rate is tops in the country and well above the U.S. rate of 9.7 percent. Other sobering statistics:
In 2008 less than 10 percent of businesses in Michigan were profitable.
60 out of 83 counties in Michigan had population losses from 2007-08
These figures are enough to make even eternal optimists like Eradico President Chuck Russell, discouraged. "The combined failed policies of higher taxes and more legislation have led to a stifled economy," Russell said. "Banks are still not lending money to small business. In addition, housing starts, one of the best indicators of economic health, remain low. There is very little new growth development happening in Michigan at the moment."
The economic troubles of Michigan took its tool on Eradico Services, which endured a difficult 2009, with revenues down 13 percent. But Russell said the company was early to recognize the economic challenges and took several proactive steps by focusing on improved productivity and cash preservation (see box at right).
In the wake of both the auto industry and Wall Street nearly collapsing, one of Eradico’s challenges was simply to boost morale (i.e., to "fight fear"), so Russell and other managers visited each of the company’s offices to re-assure employees that Eradico was still in decent financially shape and to spread this message: We have every intention of coming out of this difficult time stronger than ever and positioned to take advantage of the marketplace.
And there were some bright spots in 2009 for Eradico, including the company’s Weed Man lawn care franchise system and its mosquito control services. Russell said mosquito control has done well because Michigan’s summers are so short that people place extra value on being able to use their backyards and decks without being "eaten alive" by mosquitoes. "We have found that consumers continue to spend money on services they value," Russell said. "Of course, like everyone else, our bed bug services increase every year as well."
Reflecting on the challenges of the past few years Russell added, "While we can’t say our industry is recession proof, I think we can certainly say we are recession resistant as the past three years have shown. Those businesses that were prepared will come out of this stronger and thriving, ready to go to the next level."
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#83 New to the List: Advanced Integrated Pest Management
Founded in 1981 by Bruce Romani as Roseville Termite & Pest Control, the firm changed its name to Advanced Integrated Pest Management — the name of its commercial division — in December 2009.
"My dad was 29 when he started the company in 1981 after working for another (local) pest control company," said Vice President Brian Romani, Bruce’s son, who joined the company in the early 2000s after graduating from college.
Recognizing an opportunity in a fast-growing area, the business took off. Advanced Integrated Pest Management has grown into a significant presence, with 50 trucks on the road, serving all of Northern California, as well as Reno, Nev. The company is based out of Roseville, Calif., just north of Sacramento, and Brian Romani says the company strives to maintain its family atmosphere. "We work really hard to build relationships and our customers aren’t just our customers — they are our friends."
Brian Romani said he and his dad were aware of PCT’s Top 100 list, but they had always preferred to "fly under the radar" until recently. "We had grown to the point where we wanted to get our name out there more, and figured this was a good way to do it."
The company is working on adding a satellite office in Stockton, Calif.
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#55 New to the List:
Knox Pest Control
Columbus, Ga.-based Knox Pest Control is a fourth-generation pest control company under the leadership of John Knox and his sons Justin (age 36), who oversees services and operations, and Sean (age 34), who manages the financial and administrative aspects of the business.
After selling to Waste Management in 1988, John, Justin and Sean started a business again in 1992 after honoring their non-compete agreement. Starting again by cold-calling and going door to door in neighborhoods, the company has grown into a $10.2 million operation. Knox operates from its brand new 16,000-square-foot Columbus corporate headquarters and provides service throughout Georgia, Alabama and north Florida locations.
Knox has placed a strong emphasis on customer retention. Quality control supervisors provide follow-up visits with clientele and do what is necessary to satisfy the customer. Monthly training meetings continually enhance technicians’ ability to properly and professionally problem solve. The new corporate office includes a large and modern training facility.
Starting in 1992 with zero business necessitated an aggressive marketing scheme. Although traditional advertising has had its place in Knox’s business plan, the company attributes its sales/marketing success to face-to-face meetings.
Another area of emphasis has been hiring and retaining quality sales people. Knox has hired selectively, and has personally worked with its marketing personnel. On average, sales professionals have been with the company almost 12 years. "A stable and long-term sales force is one key to successful growth," says John Knox. "All of us in the industry agree that continuity in our service department is essential in maintaining quality service and market share. But the same principle applies to your sales people also. They are often the first impression your company makes on a potential customer."
In 2009, Knox’s revenues grew in excess of seven percent. In addition to an increased emphasis on sales, Knox opened up new markets in Savannah, Ga., and Jacksonville, Fla. The addition of new services, such as mosquito control, has helped the company’s bottom line. Also in 2009, Knox held the line with no price increases. To offset this, a stronger emphasis was placed on collections. Financial incentives were given to all technicians to collect at the point of service, including those technicians performing annual termite renewal inspections. Knox has no long-term debt, and thus, operates with the financial freedom and flexibility to weather some of the unexpected challenges of this economy, such as higher gas prices.
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#95 American Pest Control Sings Its Way To The Top
In today’s economy, success is rarely accidental. But Andrea Mooberry, vice president, American Pest Control, Hanna City, Ill., says the stars aligned just right for a new 15-second TV commercial the company was creating.
The company’s jingle, which has been used in its radio advertising for a number of years, generated a "huge response" for American even though the company does limited radio advertising and "hardly any" television advertising.
Several years ago, the company hired a friend of termite division manager Rod Haggerty to re-record the jingle in her studio. "It wasn’t the style of music that she normally sings so she had to practice it at home quite a bit," Mooberry said. "Her 4-year-old daughter loved the song and insisted on going into the studio to record it. The radio guys heard her recording and just went crazy for the idea." The little girl is now the "voice" of American Pest Control.
"So that’s our happy accident," Mooberry said. "(It’s) a real blessing to us because clearly we are not marketing geniuses!"
But American has purposely improved its marketing in other ways.
As the company purchases new service vehicles, the phone number and Web address are added on the tailgates. (There are 10 trucks that look like the one below thus far.)
Additionally, the company sponsors a "What’s Bugging You?" segment on a Bloomington, Ill., radio station (Bloomington Magic 100.7). Listeners visit the station’s Web site to complain about things that "bug" them (what gets under their skins, what makes them crazy, etc.). Each week the station’s radio personalities read what bugs their listeners on the air, and the winning submission earns a free termite inspection from American Pest Control.
Additionally, American has a banner ad on the station’s Web site that links listeners to its site (www.call americanpest.com) and the firm is also mentioned on the radio show as the sponsor for the segments.
To see American’s TV commercial, visit www.pctonline.com/
american
commercial.aspx.
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#65 Involvement in EPA’s PESP Program Benefits
FISCHER Environmental Services
Fischer Environmental Services, Mandeville, La., (#65), has had the dual challenge of operating in an economic recession and in a service area (Greater New Orleans) still recovering from the devastation of Hurricane Katrina. Still, the company’s 2009 revenues ($7.9 million) were on par with the previous year.
Bob Kunst, president of Fischer Environmental Services, said he’s proud of his company for having reduced its cancellation rate (measured monthly), which he said is 0.78 percent. A major reason for this success, Kunst believes, is the company’s involvement in EPA’s PESP (Pesticide Environmental Stewardship Program). PESP was begun in 1994 as a voluntary partnership aimed at reducing overall pesticide usage. There are more than 200 member organizations of PESP, ranging from electrical cooperatives to agricultural and environmental organizations, pest management firms to food-processing companies, and more.
Fischer’s involvement with PESP began in 2001. Kunst recalled that when the PESP program was introduced, his company’s service professionals were skeptical that it would provide extra value, "but what we’ve discovered is just the opposite. As we’ve aged in the program, people kept coming back and looking for ways to improve (e.g., better exclusion practices).
"Plus, it’s been a real benefit because the consumer has become re-engaged with us. We’ve always had quality assurance programs, but it had gotten to the point with quarterly programs where you would just spray the outside and you weren’t having conversations. Now, you have to have those conversations because you are doing residential inspections."
This increased communication, Kunst believes, is a major factor in the company having reduced its cancellation rate; additionally, Kunst said Fischer Environmental Services has 4,907 "green" accounts — which they define as accounts in which "physical, non-chemical measures are applied as an alternative to chemicals" — and of those 4,907 accounts, the frequency of retreatments per service is .00834 percent.
Fischer recently was honored by EPA as its "PESP Member of the Month" for the company’s outstanding achievements in stewardship and sustainability and was among the first pest management companies in the U.S. to achieve the Gold level standard in the PESP program. The program consists of three levels: Bronze, Silver and Gold. To join, firms must go to their Web site, fill out the application and then follow the steps indicated, or join NPMA and become a GreenPro-certified company. Kunst added, "The benefits of the Gold level, including the use of the EPA PESP logo, are tremendous."
EPA commended Fischer’s efforts promoting integrated pest management and environmental stewardship, citing the company’s 2007 PESP Strategy in which Fischer pledged to: 1. Reduce or eliminate all broadcast applications through use of targeted, precise applications. 2. Target residential structures for environmental modification. 3. Increase customer awareness of Integrated Pest Management (IPM) concepts. 4. Increase technician training in exclusionary practices and eliminate the use of any chemical with a higher than "caution" label. 5. Achieve a 50 percent reduction in caution label use by going to essential plant oil formulations, which fall under the "generally regarded as safe" or G.R.A.S category.
EPA also cited Fischer’s IPM efforts in post-Hurricane Katrina affected areas. Fischer adapted a business plan to fit a new environment to respond to dire pest problems. Rats were a huge problem and some of the most rat-infested sites were abandoned private properties. For example, a major frozen food storage facility was under water for days, resulting in decomposing chickens and sides of beef. While this was to the delight of thousands of rats, it caused headaches for the contractor hired to clean up the mess. Through various private partnerships, Fischer received donated bait stations and baits for homes that could not afford the company’s fees. Insects were another growing problem along the Gulf Coast. Termites survived the flooding and had a tremendously large food supply because of all the newly exposed wood. Previous treatments were destroyed by the flooding and the high cost of fumigation led Fischer to use state-supervised facilities to burn termite-infested wood, as required by state law, to prevent spreading.
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