04/18/2024

Importance of building a recurring revenue model in pest control

Seth Garber, Pest Daily

In the pest and wildlife control industries, ensuring steady growth and financial stability typically depends on how well you can predict your future revenue. That's where the power of a recurring revenue model comes into play. As an owner/operator, one of your key responsibilities beyond managing your company’s daily operations is to secure a predictable and consistent income stream that can sustain your business and help it grow.

So, what exactly is a recurring revenue model anyway? Well, quite simply it's a business strategy that focuses on generating consistent revenue through scheduled services. In pest control, this typically means regular inspections and preventative treatments that your customers pay for on a monthly or quarterly basis.

According to Seth Garber, Pest Daily CEO and a leading industry consultant, a recurring revenue model isn’t just something nice for companies to have in place - it’s essential for their long-term success.

“A recurring revenue model offers stability and that truly is worth its weight in gold,” Garber said. “It changes your business’s finances from erratic, one-time payments into consistent, reliable cash flow. That makes it a whole lot easier to manage your budgets, project your growth and plan your investments. Plus, it’ll ensure you have a steady income stream even during your slowest months which can take a lot of stress off your plate.”

Recurring revenue models are also great for boosting customer retention. For example, by setting up customers on a monthly subscription for quarterly services, you’re encouraging them to commit to your company, making it less likely they'll switch providers. Regular interactions also mean more chances to build strong relationships and more opportunities to upsell or cross-sell additional services or upgrades. Plus, Garber notes, subscription models allow for small, gradual price increases which customers generally find more acceptable than sudden, large hikes that can leave them with sticker shock.

“When customers subscribe to a service, they’re generally more familiar with its values and benefits,” Garber said. “That tends to make them more understanding and accepting of price increases, especially if you’re knocking it out of the park at every visit.”

Moreover, recurring revenue models can boost your long-term profits. They optimize the lifetime value of each customer, which cuts down on the cost and effort it takes to bring in new ones and maximizes what you earn from the current ones. This model also streamlines operations such as billing and helps you plan out your resources according to predictable service schedules, which means less waste and better service quality. It doesn’t get better than that, right?

Now that we’ve got you fired up about the benefits of a recurring revenue model, you might be wondering how to make the switch at your pest or wildlife control company. Ready to get started? Here are five of Garber’s suggestions:

• Identify regular services: A great place to begin is by looking back at your data and pinpointing which services make the most sense for regular scheduling. "Seasonal inspections and preventative maintenance treatments are perfect examples," Garber explained. "These services are essential for successful pest management and provide a solid framework for a subscription-based model." In other words, when executed correctly, they can help you showcase the value your company offers and ensure that your customers see the ongoing benefits of maintaining their subscription.
• Develop tiered service packages: Offering tiered service packages can be a very strategic move for a few reasons, Garber noted. "By structuring different service levels from basic to premium, you can cater to a broader range of needs and budgets," he said. This approach not only boosts customer engagement by providing them with more options but also helps in segmenting your market and tailoring services to meet diverse expectations.
• Clear communication: "The key to customer retention is clear communication about what each package includes and how it benefits them," Garber said. By transparently explaining the specifics of each tier, you help customers make informed decisions that align with their needs. This can significantly increase customer satisfaction and reduce misunderstandings that might lead to cancellations.
• Leverage technology: These days, there’s no shortage of modern solutions that can help you streamline your operations - make sure you're putting them to good use! By utilizing scheduling software and CRMs, you’ll be able to keep your service prompt and personalized, Garber noted. These powerful tools not only enhance the efficiency of booking and managing appointments but also keep a comprehensive record of each customer’s history, preferences and feedback, which will allow you to deliver more personalized service every time.
• Educate customers: Everyone understands the value of pest control when there’s an emergency happening. However, educating your customers about the benefits of preventative pest control such as long-term cost savings and less frequent infestations is also important, Garber said. He suggests creating educational materials, social media posts and monthly emails to teach customers about how regular maintenance can prevent larger and more costly problems down the line. This can help shift the perception of pest control from a discretionary spend to a necessary investment in the health of their property.

The bottom line

Transitioning to a recurring revenue model is more than just a strategic move - it's a transformational shift that will stabilize your financial outlook and strengthen your relationships with your customers. And by implementing a monthly subscription-based model with quarterly services, you’ll not only ensure a predictable cash flow, you’ll also be able to build a foundation for sustained customer satisfaction and loyalty. Here’s to smooth sailing ahead - you’ve got this!

Ready to take your business to the next level?

Pest Daily is proud to support more than 1,500 pest and wildlife control companies across the U.S. through continuing education on topics including sales, marketing, finance, HR, operations and many more. To learn what we can do for your organization, please visit our website at https://growing.pestdaily.com/.

Seth Garber, the founder and CEO of Pest Daily, has been an active member of the pest control community since 2008. A former owner/operator himself, Garber is now considered to be the top consultant in the industry and has developed unique, innovative methodologies to help pest control companies grow strategically and intentionally. To learn more, visit www.pestdaily.com