Pest Control Ground Shifting


Can you feel the ground shifting in the pest control market?

The companies that are doing well have done a good job of experimenting in new markets. Some choices are missteps. Some are really big mistakes! But at least if your company is exploring new markets, new ideas, new ways of doing business, than something good may come of it, so long as the pest control company does not over-allocate resources and money to untried ideas. There is a limit to the risk any company should be taking in new ventures. Just because one company is able to conquer a market doesn’t mean that the second company will be just as lucky. First of all, being first always gives a company the leading edge. The second company in the market has to be different, often the opposite of the first. Then the third company to market needs to squeeze out market space in between the first two big fellas.

This past year I have seen many companies exit the fumigation and termite business. Surprisingly, I have seen one big one entering these two markets. Perhaps the time was ripe for a company with cash to push into that market. Companies are realizing that there is money in landscape pest control and comprehensive rodent work. Some are looking to allied professions, such as construction and general repairs to supplement reduced earnings in core pest control markets.

Old methods of gaining customers off-line, guerrilla marketing as it is often called, has been implemented at some companies. Many companies are simply cutting prices, attempting and successfully so, to steal away customers as budget issues become a top priority. But be careful what you ask for as volume does not always equal profit, not when pricing drops to ridiculous lows that cannot support manpower and ancillary costs of doing business.

More companies are entering the green sphere. How they do it varies tremendously. Just today I saw a flier of a company that said they had “mastered the use of organic pesticides.” Like that is a major accomplishment! There is so much to learn about serving and marketing to green customers. It’s not as easy as it looks. But you have to give credit to companies for trying. Perhaps one of the most difficult elements of the puzzle is the attitude of the old-time pest control professional, often stubborn and impossible to change.

In summary, pest control markets are being double squeezed by customers and competitors.

Ultimately, the truth is in the results. Marketing will fool customers for only so long. Entering new markets without the proper knowledge to succeed is like registering for class during finals exam week. There are no short cuts. As the economic slump continues, companies will try with increased desperation to alter course, late as it is. New players will learn the hard way that you’ve got to do your homework. But the worse thing a company can do is stand still while the ground below is shaking.

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6 Responses to Pest Control Ground Shifting

  1. Mel says:

    There is so much to be said about customer retention, diversification of services, growth of the business and how to achieve all of this during this economic turbulence. While I do not see many pest control operators changing their business model or pricing much in my area. I have witnessed a change in service. It has improved greately since I first started the pest control industry. Where I do see businesses adding services is on craigslist by unlicensed companies. I have found several general contractors, landscaping, insulation, maid services all unlicensed offering pest control services. Clearly its illegal and unfair competition.

    I’d be curious how a one stop shopping model for services would pan out. Because Im constantly finding home issues but they would be financial opportunities if my company owner provides additional services. Instead I make the suggestion and nintey five percent of the time the customer asks if I know anyone who does that type of work. I don’t so they blindly seek out advertisements to service them. That is lost revenue in my opinion. Especially those services which require little investment and rely mostly on labor.

    One stop shopping worked very well in retail why not for services?

  2. Gerry says:

    Thank you for your comments.

    You can a well established company in Texas that is a one-stop-shop. It is called ABC Pest Control. On the home page, the links to some of their services outside of pest control have broken links. But I found that the site map does have working links to their many home and garden services: painting, remodeling, landspace and holiday lighting. This is a very large company owned by three brothers, each having inherited the business. Each brother took a portion of the business in three different major cities in Texas. If you are interested, you should ask them.

    If you see non-licensed pest control companies, you should report them to the structural pest control board enforcement unit. I just did that with a company called 123carpetclean.com. I won’t provide a link here because I don’t want to give them any good link credit. We lost a 1K bed bug bid to this non-licensed company last week. I was doubly frustrated when we lost a 7.5K bid yesterday for a rodent cleanout. The customer was ready to have us do the work in a professional manner, until his realtor said, “We’ll just get some F—ing Mexicans!” Can you believe that? It is so irresponsible for a realtor to say that, so unprofessional and so thoughtless for the health issues they would be creating for these illegals. It may be manual labor, but the preparation for that kind of work is intense.

  3. Mel says:

    Sorry if it seems I diverged from your original post but I think the topic and its solutions is multifaceted thus the subject I chose to reference. Im familiar with ABC Pest from a stint I did working in San Antonio back in 2006. I think they’ve become more comprehensive since then. I know of two other companies with similar business models in Detriot and Phoenix. There is also Servicemaster. I wonder how well their technicians are at cross selling services or promoting the other departments or if these models force each entity to promote themselves independently. I do not know how many times I have performed pest control services at a home being serviced by Trugreen. In one case I could tell you if the lawn guy would have been observant and refered the work to his sister company regarding a rodent problem. It would have been even better if he sold the job and performed the initial service. The customer would have become a Terminix customer. I have no experiance in a fully comprehensive home service business but my experiance refering work to everyone else tells this is the way to go during these tough times. A few years ago I would have peformed services my company didnt to make the extra money and to go the extra mile for my customers. Many times my side jobs exceeded my monthly income. These days I wish I worked for a company inovative enough to capitalize upon the opportunities I find daily.

    How have you adjusted to the change in the economy?

    Regarding calling the state. I find it funny I have never seen an Department of agriculture inspector in six years. Now that the economy has changed they appeared at my owners offices last week. I couldn’t help to wonder if the inspection was random, to see what kind of revenue they could raise for the state, or if a competitor was jealous because we won a bid or switched over the account. I watched as he drove off driving past landscapers spraying what I beleive to be herbicide. I doubt it registered with him to inspect them for licenses and everything else he would have had it been a pest control crew.

    Thank you for the thought provoking posts.

  4. Gerry Weitz says:

    No need to apologize or be sorry. I am sure our readers enjoy your comments, as I do. Yes, there is so much that can be said about this topic. It’s 9PM, with the wife calling me to bed (we’re old folk), so I’ll keep it short for now.

    It’s quite natural that as unlicensed companies start to eat your lunch, that you are thinking about how you can enter other markets to eat their lunch. I have considered entering the maid service market, but here in San Diego, there are too many illegals and legals as well, who are willing to do this work at a low price point. I do have some ideas I cannot share yet about how we would enter maid service. What I can say is that it is best when you enter any market to find a niche, where you are not doing it the same way as every other player. Should you get into other markets, you must think very carefully about the skills and liabilities with those new markets. Can you get it right, without risking your shirt? Would your efforts be better served by focusing on your core market in a bad market? You can’t be everything to everyone and do anything well. Why gain new markets only to lose your old market strengths? Why would you do that unless you see your current area of concentration as on a hopeless down cycle?

    You ask, how have I adjusted to the change in the economy? 1) We have changed our geographic focus to markets that better fit our company profile. 2) We recognize that some companies are moving into our areas of expertise at lower prices. So it is our job to stay ahead in the knowledge zone to sell the quality differential between our service and the competition. 3) We are focusing on stable maintenance services. We are not going after jobs just to get money. If we did this, we would be making the same mistake made by those in the termite industry. We are after repeat business. 4) Retaining customers is clearly an important function of item #3. We (meaning Hearts Pest Management), not Hearts Consulting Group, approaches customers with a sophistication when it comes to zoning in on their needs. We don’t lock them into our needs. We serve them. They don’t serve us. What we derive (our livelihood), is only a byproduct of what we give. Remember that.

    FYI, the strategy of Hearts Consulting Group is simply to 1) build good websites, 2)make money at it, 3) leave a strong impression that we can help others the same way, 4) be the voice for a better industry and hope that people will look to us for a valuable consultative relationship in both management and technology. It is a long term goal, so I don’t worry about the economy with regard to Hearts Consulting Group.

  5. Jerry says:

    I see companies here (Florida) that do lawn mowing, landscaping and the like. I was and sort of still do think it’s a dilution of service but a lot of comments I’ve read have changed my mind somewhat. I guess I’m of the opinion to be the best at something you can’t spread out like that under one roof. Divisions would be the way I’d go with it if I ever did & let whoever was heading it up ‘solely’ concentrate on that. But since I hate mowing my own yard I’m not about to offer my services mowing others 🙂

  6. Gerry says:

    Well hi, Jerry! It’s been so long!

    Thanks for searching deeper into my blog.

    Diversification is a topic I talk about alot. It’s really important to get it right. Like a good steak that shouldn’t be too over-cooked or under-cooked, neither should a company be too diversified or not enough. Personally, I don’t like the idea of a company with only one item to sell. It’s ok, until other companies come into that market, and then all the fun is gone and it becomes a hard game. You should always have a bunch of things to sell that make sense as a grouping, like ice cream and sorbet, or tea and coffee.

    Pest control has a few logical groupings and some that have a logical linkage within the field. Going into allied service fields is tempting. If you look at the services we offer at Hearts Pest Management you will find that we not only offer residential pest control and commercial pest control, but by getting into landscape pest control we are able to build on our understanding of pesticides and organic pest control and suppliment our strength on both the commercial and residential side with wider offerings, still using the same crew.

    I have entertained the idea of getting into general landscape maintenance, “mow and blow” as they call it. It’s steady maintenance income. … and I think landscape design can fit very well alongside an organic pest control and IPM program. In southern California, low water use gardening is the hot ticket. This is just one website on the topic I just googled this instant for “low water use gardening.” Of course you don’t really worry about not having enough water in Florida, do you? What I am saying is that it’s really a conversation starter that impresses customers. “Hmm, this pest control guy is really something exceptional!” One reason I’ve stayed out of mow and blow is the same reason you don’t do it. There just isn’t much fun in mowing and blowing. If I was back in NY, I’d feel the same way about snow blowing…. although with power equipment I might feel differently. My dad didn’t believe in us having power tools. I have a lot of memories shoveling out!

    Now I have also considered maid service. I went as far as having a consultant for two months to conduct an evaluation of the field. But essentially, maid service shares the same problem that exists with mow and blow. There are too many unlicensed and/or undocumented aliens in the business, kiliing profit for anyone who wants to deliver the service in a legitimate manner. Room exists, but not a lot. It didn’t take long to find another Googled article on the subject of illegal lawn care workers. Perhaps we can actually feel lucky that our field is licensed and highly regulated. There actually is a good side to it now as I contemplate it! I still have a unique idea related to maid service, a different type of maid service that doesn’t currently exists, one appropriate for a pest control company. Maybe some day you’ll see my announcement.

    But for now, in today’s economy, the experimentation I am talking about should be close to home. I agree that by going too far adrift from your specialty you will dilute both your service quality and your capital very quickly. We need to pick and choose carefully with a budgeted portion of funds that will not break the bank.

    Enough for now. Thanks again for being here.

    Best regards,

    Gerry

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