The High Cost of Traditional Pest Control Providers

Take a look at the latest invoice from your exterminator. You may well find that your bug bill is higher than the collective cost of your streaming subscriptions. We recently received the quote below from Orkin that, if accepted, would ultimately cost $715/year for basic treatment services. This works out to ~$60/month – a princely sum when considering each treatment generally requires less than 15 minutes of labor.

How can this be explained?

These absurdly high fees are not a function of the cost of chemicals. Exterminators typically spend only a couple of dollars – or even less – per treatment on materials.

Part of the answer lies in the inefficiency of traditional models. Because of the limitations of legacy pest control technologies, the standard approach has long been to treat both the interior and exterior of the home during each visit. The interior portion of this equation is problematic, as it forces exterminators to coordinate their visits with homeowners’ hectic schedules. This, in turn, means that technicians are unable to optimize their routes. Even those applicators working for the largest companies – which benefit from a relatively dense customer base (i.e., many customers in the same neighborhood) – spend as much as half their time driving from house to house.

Additive to this bloat are the significant back-office expenses borne by traditional providers. Older pest control companies, built for an analog world, maintain sizable call centers to field inbound inquiries, pull together quotes, and communicate next steps. The cost of this unnecessary back and forth is material. For example, the parent company of Orkin (Rollins) spends nearly $1bn each year on its sales, general, and administrative functions.

Pulling these together, we can see that a significant portion of the issue lies in inefficiencies stemming from the outdated nature of the industry’s approach.

However, this alone does not explain the high prices. Despite absorbing these artificially elevated costs, providers still earn outsized profits. Again, Rollins is instructive here. Rollins generated more than $580mm in profits last year on $3.1bn in revenue. This translates to a 19% profit margin. Put another way, 19 cents of every dollar in sales dropped to the bottom line. This is more than double the average margin generated by otherwise similar industries.

How is that pest control providers can generate above average profits despite operating inefficiently? The simple explanation is that these companies have been praying on consumers’ lack of price sensitivity in this domain.

A recent YouGov poll highlighted something that has long been known to the pest control industry: fears of insects rank right up there with fear of heights and public speaking in the public psyche. This means that, upon seeing a spider walking across their kitchen floor, most homeowners are more concerned with getting the issue resolved than securing the best deal.

Source: https://today.yougov.com/society/articles/42863-americans-fear-snakes-heights-spiders-poll

Pest control companies have intentionally played into this dynamic, making it exceedingly difficult for homeowners to understand whether they are getting a fair shake.

Spend some time surfing exterminator websites and you’ll find that few offer pricing transparency. Instead, they prompt you to call. And while some have recognized the need to facilitate online inquiries, most web submission forms ultimately result in a screen like the one below, which provides assurance that a representative will call shortly. Expect them to signal that you have a serious problem while downplaying the cost. They are using the power of persuasion to preclude you from repeating this same process with others in search of a better deal.

The net result of all of this is that homeowners are dramatically overpaying for this basic home service.

Upfront Pest was designed to correct for each of these industry-wide shortfalls. With Upfront, you can book entirely online from the comfort of your coach. In doing so, you will be prompted to select from our three core treatment options, each of which are described transparently with pricing plainly visible. We save on back-office costs while you benefit from a modern sign-up process.

The differences don’t end there. After an exhaustive initial treatment that covers both the interior and exterior of your home and is designed to rid your residence of any existing pest populations, we shift to an exterior-only protocol. This approach capitalizes on the increasingly advanced treatment techniques available, which allow us to create an impenetrable barrier around the perimeter of your home. Just as importantly, it frees us to optimize our routes for efficiency, limiting our driving time between customers. As a result, our technicians spend more of their day doing work that matters and less time counting the number of QTs they pass.

The cumulative impact of these efficiencies is considerable. And unlike others, we are committed to passing these savings on to you, providing our neighbors throughout the Kansas City metro with highly effective professional pest control services at prices that were previously unthinkable. Our Bronze plan, which is equivalent to the core service offered by more traditional companies (including the one above), starts at just $25/month. Compare us to your current provider and see how much you can save.