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Payne Pest Management was a start-up in May 2006 by Willie and Kathleen Payne with their first sale a $100,000 fumigation. Three years later, the company, based in San Diego, was on the Pest Control Technology Top 100 list and has remained on it every year since. The driving force for such rapid and ongoing growth has been thinking outside the box, says Jason Payne, son of the founders and who serves as company president and chief operating officer.
“People like to talk about thinking outside the box,” he says. “But it only works in business if you take the mindset that you really can do something.”
For example, blending business with a love of music. Willie and Kathleen Payne both love jazz music, so five years ago, they started promoting the San Diego Smooth Jazz Festival by becoming a sponsor, which is a great promotional opportunity.
“As a sponsor, we are in front of 6,000 people for three days,” says Payne. “And jazz is our customer demographic based on age, household income and homeownership — 85 percent own a home, 50 percent own a second home, and 75 percent live in our Southern California service area. So, we promote free home inspections at the festival. As an incentive, anyone who fills out a form is included in a drawing for $1,500 value packages for the festival next year.”
Challenging conventional thinking helps because pest management is an intangible service. The goal is to differentiate your company by finding ways to offer customers more value. Structural fumigation is a prime example.
To better serve their fumigation customers, Payne says his father believed that because drywood termites are a recurring problem, their service could offer ongoing protection, similar to subterranean termite control. The result was a fumigation service that is based on a one-page contract with no four-year cancellation clause or other fine print, an annual inspection and a zero-cost damage warranty. The customer contract renewal rate is 95 percent.
“We tell our fumigation customers that there is a 100 percent chance that drywood termites will return sometime. Drywood termites are a community problem. If they are in the neighborhood, and they are, they will re-infest the home,” Payne says. “When they look at the cost of the fumigation and the repairs they are facing, they get the value of having a damage warranty plus the next fumigation at no additional cost. Our program makes a re-infestation our problem, not the homeowner’s.”
To back its damage warranty, the company has seven full-time ex-carpenters on staff, all cross-trained as universal technicians in termite control.
Differentiating your service makes it easier to walk away from a job where the prospect wants to low-ball the price. Payne Pest Management focuses on commercial fumigations, which make up about 75 percent of its fumigation business. To sell to high-profile customers, the company will hold two to four meetings for homeowners and residents, talk to the landscaping crew about what needs to be done, and make sure the gas company has turned the gas off. The morning of the fumigation, someone from the company is on-site to check preparations and do what is necessary.
“Our goal is peace of mind. Being on-site makes it easier for the fumigation crew and that makes them want to work with us and maybe give us a better price. For customers, our price is competitive, but our service and warranty give us a 90 percent closing rate.”
The company also stays active in organizations serving its markets. Willie Payne, chairman and CEO, is an active member of the Community Association Institute and the California Association of Community Managers (CACM). He is active in the CACM Vision Awards, golf tournament, and its education and membership committees. Jason Payne is a member of CAI, CACM, the International Facilities Management and is a Friend of the Institute of Real Estate Management. In 2009, he was elected to the CAI San Diego chapter board of directors and acted as president in 2014.
“Networking is great for building relationships and staying on top of market trends” he says. It also is important for our industry image. Exterminators often get a bad rap in the public eye. In the movies, you see them wearing a big mask, and it’s an overweight guy with an untucked shirt. It’s not a realistic view of who we are or what we do. We’re really very detailed with integrated pest management.
The company makes it a point to be very active in a range of community organizations and events, including the Jackie Robinson Foundation, Leukemia and Lymphoma Foundation, Amvets, The Trinity House, Christian Record Service, Turning Point, the Nestor Torres Foundation, Lincoln Charities, Susan G. Komen, The Monarch School, the U.C. Riverside Foundation, Mothers Against Drunk Driving, the San Diego Regional Minority Supplier Diversity Council and B.B. Jazz.
Networking and word of mouth have made company growth organic. Payne Pest Management doesn’t advertise on Google search. They do have social media to be relevant, but don’t pay to advertise on it.
“Most of our new business is from referrals and not cold leads,” Payne says. “We have a company culture based on sales. People are expected to get leads on their own. And with an inbound lead, we assign it to a pest control technician to sell. Everyone in our company sells. I have a sales goal. My father has a sales goal. Managers have a monthly sales number. And we don’t have sales divisions in our company. Our salespeople sell everything and are paid on commission and our pest control technicians are paid on sales plus on production. In return, we pay more, we take company trips, have prizes and take top customers on cruises.
“There’s a profit to be made in pest management, but companies go out of business all the time. If a company is struggling, there is a reason. The answer might be more education, but you can work on the solution if you have the right attitude. Go to industry meetings and talk to people. Just have discussions and an open mind. Success in any realm of life is to not make excuses. Yes, there is bad luck, but you learn from it and avoid making the same mistake again.”
And the opportunity in structural fumigation?
“Structural fumigation is definitely a growth opportunity,” Payne says. “Termites have been around for millions of years. Homes are getting older. New communities are being built. So, we will always have termites to deal with. There are legislative issues, but the response is for industry to act as one to educate the legislature and the public, and to do fumigation according to the label and the law. In Southern California you need fumigation.
“We were basically 100 percent fumigation when we started out. Today, our revenue is about 55 percent fumigation. The fumigation revenue percentage is decreasing, but the fumigation revenue amount is still increasing because we are growing revenue overall.”