Case Studies - Pest Control Company
June 03, 2021
by a searcher from Universidade Vale do Rio dos Sinos in Porto Alegre, RS, Brasil
Hello everybody! I come to tell my case to the big group here! In February / 2021 I took over a family business that operates in the Pest Control segment, located in Porto Alegre, Rio Grande do Sul. Brazil. Although at the time I didn't understand anything about the business, it was a unique opportunity and I joined with my dream of becoming an entrepreneur! Before taking over, I had already audited the numbers (I worked for 5 years at EY), so to sum up, I took a company with cash, about to end government contracts (40% of revenue), delayed in digitization (no system, site without security certificate, etc) and, what made me most comfortable in the decision to accept this challenge, with long-term customers (> 10 years) who pay more for the service than they would pay to a competitor, but feel extremely satisfied! Since Feb/21 until now, I have been tidying up the company, I had to let go of employees due to the fall in work, we are closing a line of business that brings low profitability and a lot of risk and digitizing the company! But what keeps echoing in my head is: How to add value to my customer? It's not a simple answer, because I serve clients of all kinds! If anyone has experience in the field or similar segments, it would be great to hear your ideas. Thanks,
from Harvard University in Washington, DC, USA
There may be upside in
a) churn-reduction initiatives, starting with analytics re: why you lost a customer,
b) micro/precision pricing,
c) routing and scheduling optimization (as well as clear territory design/concentration)
d) employee culture and career paths
e) focusing on specific niches -eg, in the US there are mosquito-control specialists, animal removal specialists, bee removal, public-water management, etc. and,
f) digital marketing (especially linked to e) with a clear value proposition. A few years ago most companies in the industry had very low growth rates and seemed undifferentiated -- now there are a handful that have figured out digital marketing (and also door-to-door sales) and having >10% annual growth rates. It seems articulating the value proposition/ how the service is better than the competition is hard for many to do -- and a few have gotten the hang of it. See the Aptive story in the US.
Also try following Paul Giannamore at Potomac -- they are an i-bank for pest control companies globally; he has some great insights into the M&A dynamics of the pest control market; pest control companies are very sought after right now,
Hope that helps.
Check out the below links:
https://www.pctonline.com/article/aptive-environmental-arrives-in-top-25/
https://www.potomacpestcontrol.com/blog/webinar-aftermath-pest-control-valuations-and-ma-in-a-post-coronavirus-world
from University of Texas at Austin in Fort Worth, TX, USA
Would also suggest continuing to focus on cost-cutting through making operations more efficient, organized, and easier to manage. The more organized and efficient the company is, the better service you can provide. Some examples include 1) more efficient scheduling leads to quicker scheduling turnaround time 2) more efficient routes lead to lower % of job arrivals falling outside of the arrival window told to the customer 3) more organization allows office team to answer questions better 4) if office is more organized & efficient, customer service representatives can spend more mental energy on addressing customer concerns, and many others. Put more simply, the less time, energy, and effort you and the team have to put into managing the operations day to day, the more time, energy, and effort you can put into your customers and their issues and concerns.
I would also explore partnership opportunities. Instead of learning many different disciplines, you can find the strong providers in your area, negotiate a referral fee, and pass them along to your customers - especially if you earn their trust through excellent service.