Pest Control Company finds success through focusing on client retention, not revenue | Business Observer
Entrepreneur: Doug Longfellow
Company: When Longfellow acquired the company in 2005, annual revenue was around $500,000. Now, NaturZone Pest Control, based in Sarasota, has since grown to just under $5 million a year in revenue. Longfellow’s direction has helped lead the company to become one of the largest privately-owned pest control companies in the region. When he bought the business, it had five employees. Now, the payroll is 42 employees.
Longfellow’s leadership has continued to push the company’s revenues upward. In 2020, for example, it reported an 18% increase in revenue over 2019, going from $4 million to $4.7 million. Last year, the company held a 96% client retention rate with zero employee turnover — startlingly high numbers for a somewhat fickle industry where price is a big customer driver.
NaturZone provides green pest management for businesses and homeowners in a large swath of the west coast of Florida, including Charlotte, Citrus, DeSoto, Hillsborough, Manatee, Pasco, Pinellas, Polk and Sarasota counties. NaturZone utilizes an Integrated Pest Management system to eliminate pests, which uses technologies to minimize risks associated with products. NatureZone’s green technicians, Longfellow says, are trained to inspect environmental risks of products before applying the materials. The company offers a number of services, from ant control to bed bugs, termites and bee and wasp removal.
After working 20 years for publicly traded international pest control company Rentokil-Initial, Longfellow came to believe the big players in the industry were focused too much on the wrong metrics: revenue growth. So when he went into business on his own, he flipped that to client retention.
In 2019, Longfellow, 64, retired from actively managing the business. He’s stayed on as president to oversee strategy and implementation of key initiatives. Currently, his son Andrew has taken over as managing partner. Longfellow predicts the company will continue to grow a steady 15-20% each year.
Best decision: The first adjustment Longfellow made when he acquired the company was to do everything the opposite of the corporate world. While the corporate companies are focused on earnings year after year, Longfellow is focused on client retention. He says that’s worked out well for his business — and has been his best long-term move.
The key to that success? Start with sales. He says that normally, salespersons earn a commission for quantity of sales. Longfellow warns this leads to quick, easy sales that are high risk of being short-term clients.
Instead, Longfellow pays his salespeople higher than the industry average and includes a client retention bonus that can be earned twice a year. He says that inspires salespeople to invest in longtime customers. “That’s our secret sauce,” he says of the client retention program he started in 2006.
Turning his attention to clients isn’t the only great decision he’s made, though. His greatest decision yet was going into business for himself.
“It was more rewarding and profitable to go into business by myself,” he says.
Best advice: Be tough on problems, but easy on people. That’s part of the reason Longfellow maintains low employee turnover rates. While he says he’s slow to hire, he’s also slow to fire employees — in spite of the “slow to hire, fast to fire” axiom.
Longfellow is familiar with difficult employees. At one point, he says NaturZone’s turnover rate was around 25-30%, which in reality only meant two to three employees. “We would hire someone and figure out down the road that they were the wrong fit,” he says.
But he wasn’t happy with that rate so he did something about it. Through networking, he discovered a hiring consultant that would help him weed out the wrong fits and find the right ones.
Longfellow still comes across an employee who has “aggravating” habits. But he says you can coach poor behavior. “As long as they show up and customers like them, I’d rather keep them,” he says. This approach has helped with his client retention because Longfellow says clients like dealing with the same people.
On dispensing advice to aspiring entrepreneurs, Longfellow suggests being cognizant of being debt-free. If an entrepreneur has debt, then they have a whole other slew of problems, he says.
Biggest mistake: The hiring consultant he has worked with stems directly from what he considers his biggest misstep as entrepreneur: hiring practices.
Initially, if he interviewed a worker he liked, Longfellow used to hire them soon after. But Longfellow soon realized some of the employees were the wrong fit. The only problem with that is he wouldn’t figure it out until down the road. That led to the rising turnover rate.
The personality assessment consultant has helped the company seek and find workers who are steady, rule followers and focused on clients. If anything felt off or they didn’t possess one of these qualities, Longfellow would turn them away.
With new testing in place and the practice of saying no, the firm has gone from some turnover to just one person leaving in the past 18 months.
Biggest up-at-night worry: Low turnover rates and high client retention are the leading factors for why Longfellow sleeps well at night. When asked about what keeps him up at night, he says, “Nothing. We’re doing great.”
The topsy-turvy life of an entrepreneur can be maddening — but also rewarding. Nine of the best in the region share their ups and downs in our annual Top Entrepreneurs issue. Click the links below to read more: