When it comes to balancing capacity with demand, there are several challenges smaller service businesses face.
In today’s blog post, Versa-Tech PM Founder / COO Jason Baacke weighs in on the issue and challenges of balancing capacity with demand for smaller pest control service businesses and answers the question on what is more important: getting more business with speedy initial inspections and services or the quality and effectiveness of the service?
PRO TIP: Quality and Effectiveness of Pest Control Service & Reputation of Pest Control Company Far Outweighs Same Day, Speedy Inspections
For many small business owners in Southern California, like Versa-Tech®, gaining more clients is an on-going goal. Growth is just natural for most of us, even if some business owners do not want it. We have run into a few pest control operators who are happy with running one route as a one man show. They keep a select 70-100 small to medium regular clients, mostly residential, and they are content with keeping their company very micro and steady. Their #1 issue is how much business they must turn away because they do not want to take on more.
“That just goes against nature, my nature especially,” says Versa-Tech PM COO, Jason Baacke. “To me, that’s crazy talk, yet to each their own, and if you are providing good service and are representing the pest industry well than keep it up.”
There is a moment in each of these conversations, a flicker, a sense I always get that they still want more and are just too scared to try to take the risks needed, or even take a chance, or that they simply do not know how… or any combination. Yet plenty of good pest control business owners make good livings doing their one or two men show keeping it micro.
What about the rest of the small business owners who have the drive to grow, to keep taking the risks, the chance, who see our companies gaining revenue year after year, after year, after year, and the profits that will trail behind? How does a service company keep marching forward? At Versa-Tech, we firmly believe that if you are not growing, you are dying. You either win or lose. You are hitting your projected numbers, or you are not hitting them. The answer is you must balance and maintain the capacity to keep growing sustainably while also maintaining the highest levels of customer service and satisfaction.
Below are challenges service businesses face in balancing capacity with service quality.
CAPACITY CHALLENGES
Capacity only poses an issue if you are running out of it. That must mean that the demand for your business is high. Leads are coming in at a faster pace than you can schedule them in the necessary time the market is demanding. Yes, too much demand can be a problem. A good problem, but a problem non the less. Not only is service demand a strain on capacity, but an overlooked area is administration and business management demands, that also must be accounted for when analyzing the capacity of your firm. This is a major pit fall for some service companies and how they begin to erode slowly. They adjust their capacity to take on the new incoming client demand but forget or do not allocate enough time for quality control, employee relations and culture, accounting, marketing, and business development.
When choosing pest control, is Speedy Initial Inspection or Quality of Service more important to you?
Another consideration in terms of meeting market demand is having the staff available for same-day services. For many homeowners and business owners, when they discover they have a pest or rodent issue, they want to schedule their inspection and service as quickly as possible, and sometimes that is just not possible, in which case, a service provider can try to schedule their appointment for another day, or risk losing their business to another pest control company.
PRO TIP: In many cases, especially for outdoor pests, rats in the attic or garage or wildlife removal, waiting for a trusted, reliable pest control company is far more important than getting speedy (often, unreliable, and inferior services.) Many times, Versa-Tech is called in to clean up and provide solutions other pest controllers failed to provide. But don’t just take our word for it, check out our Yelp reviews to see why we’re LA County’s most trusted pest and rodent control company.
RISKS OF RUSHING A DECISION TO CHOOSE A PEST CONTROL PROVIDER
While guaranteed same day service sounds great, there are some risks in rushing to hire just any pest control company, including the following:
- Unreliable, inferior services
- Incomplete services
- Continuing pest or rodent issues & damage
- Lack of follow up
- No Guarantees
QUALITY & EFFICENCY MATTERS
As noted, this oversight can slowly lead to poor service quality, poor employee morale, missed opportunities, burnout, and mass inefficiency as you scramble to get things prioritized, completed and in order. This is where the slow erosion begins and if left mismanaged, it will start to slow down that flood of business and turn that good problem into a bad problem. It will begin to damage your reputation.
The most profitable way to deal with capacity is simple, build more capacity.
That means hiring. Not so fast. Hiring alone is a huge capacity eater especially when done correctly.
Let us look at how it is done wrong. We all see the permanent signage on the side of most service trucks that go something like this, “now hiring apply at badservice.com” or “now hiring call 555-you’re just a position filler”. I understand that it is hard to fill up an initial interview day as 50% of most set interviewees do not show up. Yet if you are looking for candidates this way the firm is not putting in the necessary time to recruit, find and filter good candidates.
The downfall of this approach means that the firm is concerned with just hiring staff to plug into a spot fast to keep the capacity for demand up and sacrificing the service and staff quality. This starts the erosion of the quality and brand. Also, this hurts the managers capacity because they are always having to review candidates, deal with customer complaints and fix poor services or worse, deal with considerable damage or liability claims because they are not training correctly or have the proper culture.
HIRING & STAFFING
At Versa-tech, we are big believers in taking the time to recruit, hire and train quality candidates. This means seting aside time to hire right. Taking the time to interview a few times, have ride-a-longs, call references, screen for background and call the past employers. This time spent up front will save so much capacity in the future. At Versa-Tech, when we are ready to hire, we set aside Saturdays for initial interviews and any other hiring needs, so we have less impact on our busy service weekdays. We also save hiring for slower quarters of the year like Q1. That way we are ready for the busy quarters opening our capacity before demand arises. We also have firm set interview days where we stack interviews every 30 minutes from 9AM-5PM and expect half to no show. During that no show time we get in meetings, inventory, equipment maintenance, marketing, or other tasks to maximize the time. Then we take the acceptable candidates and run them though the rest of our hiring process until we get the best one. This has led Versa-Tech to having an extremely low turnover rate and a staff that is great to work with, trusted and keeps our liability low. It has also led to Versa-tech receiving 100s of 5-star reviews and 100s of customer referrals.
Hiring is also costly. Not every small company can afford to continually hire. Hiring wrong is more costly. To hire, you need to either have the cash flow and current profits to sustain that new hire through training, as well as properly supply the fresh staff, have the loan, or credit line to make it happen. Either way there will be a hit to your balance sheet and Profit & Loss. This is all in the hopes that the added capacity this new hire brings on will make up for the short-term loss with long-term gains in production and reputation. When how and with what capital do we hire is where the art of good management comes into play.
BALANCING DEMAND & MAINTAINING STANDARDS
Controlling the demand for pest control services in Los Angeles County is my favorite way to handle capacity issues. However, to do this, you must learn to say ‘no’. Saying ‘no’ is a tricky thing to do especially when you need to hit your numbers and when there are other factors such as holidays, rain out days or other factors that limit the number of working days in a month (A shark like me hates turning down a meal). Sometimes you just do not have the slots in the day to attend to the demand and that is ok. It is never easy to tell a prospective client that they must wait 3-5 days before we can get out for a consultation and inspection but to keep the standard high, this must occasionally be done. I use the metaphor of a garden hose. As an operating officer I continually keep watch over the capacity of our month, weeks, and days to make sure we are efficient, and where we can gain capacity if at all. As well as a close eye on new leads and other demands on our time to fill any open spots. As I am looking, I am also controlling the ‘water flow out of the hose’. Say we start the week with an open day on Thursday, and the rest of the week is packed. Let us let some water in to hopefully fill up that time with some leads and services. Then come Monday afternoon one of our sales guys lands a large rodent job, well that open Thursday just got booked up and I need to turn the water off for that week and start looking into the following week or looking to see where I can maximize another staff member, and sacrifice some overtime to get the lead or service in. If there are no other open spaces, and we are high on overtime for the week, then we must be ready to say ‘no’ and turn off the water. Can this make for an upset or frustrated prospective client? Yup. I would take five frustrated prospects over any one inadequate quality job and overworked employee any day. I am ok sacrificing that short term gain for the long-term benefit of reputation and continual growth. That way the erosion never gets started.
At Versa-Tech, we do not say ‘no’ to our prospective customers. We simply offer our open times, try to work as best we can to accommodate their needs, but it will never always work out and you must accept that prospective clients will not be willing to wait or like your availability.
“After 12 years in the pest control business, I have come to realize that most of the time, the clients who are willing to wait turn out to be the best clients,” states Jason.
Now let us circle back to the water hose metaphor. While we love to control the flow of water, the water supply must be there to begin with. This is where not managing the capacity properly will start to take its slow eroding effect. Soon the inferior quality of work, lack in staff management, and the flood of demand will start to affect the reputation and then two things will start to happen. One is the word gets out. This can be done through review sites like Yelp and Google as well as word of mouth. The first one- or two-star reviews begin to show up and that ‘water supply’ starts to take a hit. This will only compound over time if not managed properly immediately and some changes are made. This is the hardest out of the two, because it requires back peddling and putting a hold on operations as you circle back to fix the problems and control capacity. This is also very costly in terms of lost profit and revenue, as well as management time.
Second, firms will start to put their hopes in marketing. Instead of putting the time and the work into slowing down to fix the issues, they will lean too far into marketing to fix the problem. This is what the bigger local, regional, and national companies do. Instead of adjusting their service and business models they just dump money into marketing and are ok taking a beating in reputation. However, this will destroy the small services company. Small service companies cannot afford to chase bad service quality and management with more money. This will kill cash flow, capital reserves and profits. It turns into a money pit. Good money chasing bad.
There is an effective way to control the water at the source and that is your marketing spend. This will also help to control the marketing to revenue dollars ratio. No use in spending on marketing costs if you cannot handle the work. This move should increase cash flow and profits assuming you sustain production.
However, deciding to cut marketing to slow the source is a bigger decision that must be made in advance. This is a quarterly or annual decision, made after a lot of meetings, research and analysis. We use the aircraft carrier metaphor for this decision. A carrier cannot stop on a dime or turn very quickly. Neither can a successful marketing strategy. When you change courses with your marketing plan or cut your marketing spend abruptly, the data you’ve collected and the trends that you’ve tracked are disrupted and the results you get and your costs per acquisition are greatly impacted, meaning that often times you may lend up spending more in the long run to get your costs for each lead back down. It then takes time to nurture your ad campaigns to bring your cost per lead down, which is not ideal. In which case, you had better be confident in your existing client base and reputation.
The very best strategy for balancing capacity and demand with maintaining quality pest control service is to take the time to hire right, at the right time and learn to say yes when you can to new business, making every effort to accommodate your prospects schedule and needs and balance with your availability and staffing, and if you can not book a suitable time, be ok with saying ‘no’ to the job you cannot work into your staff’s work flow and your capacity problem will remain a good problem to have.
ARE YOU LOOKING FOR A TRUSTED PEST & RODENT CONTROL COMPANY THAT PRIORITIZES CUSTOMER SATISFACTION?
If you are looking for trusted pest control, check out our reviews to find out why LA County homeowners and business owners choose Versa-Tech and then give us a call. We’ll get you scheduled as quickly as possible, and you can rest assured, we will solve your pest problem with quality pest solutions you can count on.
(888) 429-1213