- August 6, 2020
- Posted by: Marisa Palmieri Shugrue
- Category: Accounting Advice
Dan Gordon of PCO Bookkeepers and Donnie Shelton of Coalmarch and Triangle Pest Control share what growing pest control and lawn care companies need to know to compete and stay ahead in monthly State of the Industry webinars.
Watch the July 2020 webinar here:
Register here for the next session, Aug. 11 at 1 PM Eastern:
https://register.gotowebinar.com/register/8286800743663187471
July webinar show notes:
• This new webinar series was inspired by the COVID-19 webinar series Dan and Donnie hosted in the spring. [0:15]
• Donnie is excited to discuss how to maximize business growth – it’s one of his favorite topics. [1:15]
• Dan says “digging in” to details is important, and PCO Bookkeepers and Coalmarch provide real client data – not survey results. [2:05]
Maximizing business growth
• The main strategies pest and lawn companies use to growth their businesses are: [2:40]
-Door to door
-Digital
-Mass media
-Acquisition
• When growing, there is always the issue of volume vs. efficiency in terms of customer acquisitions. [3:20]
• Donnie is interested in maximizing growth at a profit – not with access to capital or private equity, like some people may have. [5:20]
• Dan says there are two ways to look at it. Your pest control company may be a total investment where you aren’t looking to make money in the short term, but rather build it for a few years and exit at a profit. Or, it’s your career and you need to make a living from it. [5:40]
• Donnie reviews the growth strategies and shares why digital marketing is optimal. [6:30]
• Door to door is a special skill set that most people don’t have, Dan says. Mass media takes a long time and pest control acquisitions are pricey because valuations have been high, although they may pull in a little because of COVID-19. [7:10]
• The most common question Dan hears about digital pest control marketing is “what do I do if I don’t trust my marketing numbers?” [7:40]
• Because owners don’t trust their digital data, so they give it only 10-20 percent of their marketing budget and they don’t optimize volume or efficiency (customer acquisition costs). [9:25]
• It’s more expensive for a company that’s not paying attention to their “digital brand” to grow than it is for a company that’s dialed in to digital marketing. [10:42]
• Donnie explains what happens when you engage with a traditional marketing firm and the fundamental problem with doing that: They can’t track your cost per lead or cost per sale because they don’t know what’s going on in your office. For example, are the people filling out forms already customers or asking for services you don’t offer? [11:31]
• Back in the days of Yellow Pages, it was easier to figure out cost per lead based on your monthly or annual spend, Dan says. [12:58]
• Donnie says you have to stay on top of digital marketing because it’s dynamic and things are changing all the time. [13:36]
• There is a disconnect between owners and traditional agencies because they define leads differently. For the owner it’s someone interested in service. For the traditional marketing agency, it’s a contact. [15:54]
• That creates problems, including overreporting of leads and dilution, where “leads” may be current customers calling in for a retreat or another non-sales reason. [16:20]
• Donnie shares an example call-tracking chart from Triangle Pest Control and how it relates to incorrect numbers. [18:00]
• Why the most critical number to maximize growth volume and efficiency is cost per sale. [19:20]
• You have to know cost per sale and manage it, Donnie says. It’s the number of sales divided by how much you spent to get them. It’s difficult to automate this number. [20:40]
• It’s important to manage cost per sale on a daily or hourly basis. Looking at it a month later is not helpful. [21:40]
• Donnie explains closed-loop marketing. [23:20]
• Historically in the pest control industry, companies have used spreadsheets and manually pulled data from different systems. [24:00]
• Dan says over the past five years, some of the most successful pest control companies have hired people to pull, manage and analyze this type of data. [24:00]
• Donnie says the technology has been there for a while but it has not been accessible or widely adopted in the pest industry. [25:20]
• The value of automated closed-loop marketing cannot be overstated, Donnie says. [25:50]
• What new marketing technology means for the pest control industry and what terms not to get wrapped up in. [27:00]
• The numbers that matter for growth: volume, cost per lead and cost per sale. [28:10]
• The next webinar on Aug. 11 will include a case study with an actual client to walk through gross margin, marketing and results. [28:30]
PPP update
• Dan provides a Paycheck Protection Program update, including the application for forgiveness windows and forgiveness strategies. [30:20]
• There is a five-week extension on applying for PPP – until Aug. 8, so it’s not too late to apply. [32:45]
Examples showing the power of recurring revenue
• Dan reviews the power of recurring revenue, which the pandemic has illustrated. He gives examples from real clients to show why 80 percent recurring revenue vs. 50 percent recurring revenue makes a big difference, even when profits are equal. [33:30]
• What happens where there is an economic jolt and people start watching their spending? One-time work dries up. [37:40]
• Donnie wants to dig into whether one-time work like bed bugs drops and why. [39:13]
• The pandemic hit right at termite swam season. Initial one-time jobs dropped. [40:35]
• Dan shows the results of a real M&A client whose deal fell through due to a lower amount of recurring revenue. [44:47]
• He reviews what that client now has to do to survive. [45:50]
• Dan explains just how valuable recurring revenue is and why. [46:20]
• Donnie says the value is in stability. [47:00]
