Finding Business Opportunities in the Challenges of Pest Control

Shifts in the economy and labor force impact just about any business, often sparking stress in business owners across all sorts of industries. A recent straw poll showed that pest control operators (PCOs) are more optimistic about the future than their peers who own small businesses in other industries.

That optimism is encouraging, but it certainly doesn’t mean a typical PCO can’t stand to improve their margins and strengthen their business by focusing on the right areas. Specifically, there are three categories that can make or break a pest control business: labor, materials and marketing. Mastering this trio can establish the foundation your business needs for success.

Putting Your Team First

Along with finding qualified technicians, PCOs are also faced with the additional challenges of rising labor costs. This is particularly true for skilled labor positions, like pest technicians, where training and certifications can make good fits hard to find. The challenge of labor in pest control, though, goes beyond hiring; PCOs need to turn their sights to job satisfaction and retention if they want a strong team.

Fortunately, improving your employees’ experience often comes from making changes that positively impact your overall business, as well. Start by asking: What tasks do your employees dislike the most? Finding ways to take the sting out of these tasks — whether it’s paperwork, inefficient scheduling or too much windshield time — can significantly improve company culture and morale, leading to lower employee turnover rates.

Focusing on elements of the job that frustrate or delay employees can help you to target your efforts on changes that improve morale and company culture, but it goes beyond that. Those same hurdles that your team dislikes are also areas where your business isn’t performing as efficiently as it could be. Streamlining your operations to create smoother workflows for your team ultimately leads to more efficient processes, more billable hours and better customer service.

The Cost — and Price — of Doing Business

The reality is that material costs in pest control are part of what’s commonly called the contribution margin: the necessary recurring expenses that allow a business to keep operating. As those material costs — from gas prices, to payroll, to chemical costs — rise as a result of outside economic factors, PCOs often find themselves in a position of having to choose between cutting costs or raising prices.

Taking a proactive approach to material use and tracking is crucial to minimizing spend, particularly with consumables like pesticides and fuel. Tracking chemical use and training technicians on proper application minimizes waste and helps your business protect its gross margin. Similarly, finding more efficient routes and building route density within your customer base (or ideally both) can lead to significant fuel and vehicle maintenance savings.

No amount of proactive material management can stave off price increases forever, though; increased costs inevitably lead to increased prices. You can minimize customer churn associated with price increases by increasing your prices on a regular schedule. While it may seem counterintuitive to raise prices more frequently, holding out for as long as you can before raising your prices only serves to make the increase more drastic in your customers’ eyes.

Ideally, you can minimize aggravation throughout the process by including language upfront that lets customers know they may see increases in the future to ensure service quality. Avoid giving specifics if you’re informing customers directly. They may relate to rising gas costs, for instance, but they also know your prices won’t be dropping when fuel costs do. Remember that most businesses don’t inform customers before an increase; they just raise their prices. PCOs should feel confident doing the same — just remember to check your local regulations to confirm you’re not legally required to send a letter before opting not to.

Make More With Your Marketing Dollars

Maximizing your ROI on marketing spend is a surefire way to grow your business, but, just like labor, retention is key when it comes to your customer base. Many PCOs make a fatal error by fixating on their cost-per-lead when trying to gauge their marketing efforts. These numbers are both important and informative, and you can learn a lot by tracking them. For real insight, though, PCOs need to focus on customer lifetime value. This often-overlooked metric speaks to customer loyalty, but even more importantly, it can shift the way you think about your marketing costs.

If the cost of acquisition for a particular customer is $200, that alone doesn’t tell you much; it’s the customer’s lifetime value that determines the real-world ROI. If that customer stays on for three years, for instance, their lifetime value is monumentally greater than if they churned after just a few months. Customers that stay on longer — and pay for more services — have a higher lifetime value, directly offsetting the cost of acquisition and generating more profit for the business.

Pest control is as rife with challenges as any field service industry out there, and each of those challenges is an opportunity to implement strategies that let your business outperform competitors. When you focus your efforts on minimizing employee churn, managing materials and pricing appropriately, and keeping customers happy to maximize their lifetime value, you position your business to outperform competitors and be the best in pest.

To learn more about how the right software can help your pest control operation break down the numbers and use data to drive strategies that work to make your business goals a reality, visit PestPac today and explore PestPac’s suite of dedicated operational features.