HOW THE 80/20 RULE IS ROBBING YOU BLIND
Everybody knows how the 80/20 rule applies to sales. Its a simple enough principle. In sales, the 80/20 rule says that 80 percent of our sales comes from 20 percent of our efforts and that if we focus more of our effort on the 20 percent that really works for us our sales will increase. Sounds good doesn’t it?
But, if you’ve been in the pest control industry for any period of time you’re undoubtedly experiencing the darker-side of the 80/20 rule when dealing with one of those, “particularly discriminating clients,” and you may not even know it. You know the clients I’m talking about? No matter what you do for them they are never satisfied. I bet you can picture one or more of these people in your head right now as you are reading this.
She calls you every week because she thinks she sees a bug near the mailbox that’s 300 yards away from the house in a wooded lot. Then she doesn’t show up for the free service she demanded, even though you personally confirmed the appointment with her the night before. Then two days later she calls complaining that you didn’t show up and wants you to come back out again, FOR FREE!
So, you keep going back out and back out again because someone once told you, “the customer is always right,” right? But you’re the expert, how do you feel, deep down, when you know you are wasting your time? Feelings aside, who’s making money while you are doing these unnecessary free services?
The problem isn’t that you are a bad pest control operator or the client is a bad person. The problem is that you do not share the same core values when it comes to your service and its costing you a lot of money. This serious problem begins at the top.
Many pest control operators I know across the country could care less about who is calling as long as sales are being made. This is wrong, wrong, wrong! Just because someone says they want to buy your service doesn’t mean that you should let them.
How The 80/20 Rule Works Against You
In addition to sales, the 80/20 rule also applies to the profit side of your business. For example, lets say you charge $100 dollars per hour for your service but you are spending 80 percent of your time with 20 percent of your clients doing free services, then you are losing thousands of dollars every year right out the back door. You might hear yourself say things like, “I’m always so busy, I can’t catch up, but I just can’t figure why my business is not growing.”
Here’s a simple process that will help you put the 80/20 rule back on your side.
- Once a week, write down a list of these special clients. If you are not aware of them, just ask your secretary, she’s on a first name basis with them, guaranteed. You should also run a retreat report and you’ll find the ones who are always requesting free services and put them on the list too.
- Ask yourself these questions two questions for each client on the list:
A. Is there anything I can do to make this client totally happy with my service at the rate I am currently charging?
B. If I knew what I know now about this client would I sell this account again for this price?
- For each client where the answer is no to these questions, you have two options. You can continue to lose money doing free service or raise your service rate so you can earn a profit on the account. Never continue to lose money on any account!
If you simply schedule 30 minutes every week to do this simple process and actually follow through with the hard conversations that need to happen with those clients who need it, I guarantee you will feel better about yourself, you will see your stress level go down and your profits increase.
One final thought. There are some real pest problems that require more time and effort to get under control. Sometimes a salesperson might misdiagnosis the extent of the problem and under charge for the service or a service technician is making several free service calls because he needs some remedial training to solve a client’s problem. In those cases, we should eat the extra costs and add those circumstances to our FUBAR list to use as a training example so we don’t do the same thing in the future. But, when you identify a client who just wants free services because they don’t value your time, I suggest you schedule an in-person sit down to discuss an appropriate price increase or share them with competition.
Remember, you are the expert. This business is your life and its ok to stop doing business with the people who don’t share your vision for your future.
If you are experiencing the dark side of the 80/20 rule and would like to learn more about how you can supercharge your pest control business give me a call and let’s talk about how ValuePest can help you grow your local market.
Bob Jones, President