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Grow Greener Pastures
1 Jan, 2009 By: Harvey Goldglantz Pest Management ProfessionalA new year is upon us, and challenges abound.
 Harvey Goldglantz |
We have watched our retirement funds shrink, revenue sources contract and profitability (if any) shrivel. Unemployment numbers continue to rise and consumers continue to guard, protect and revaluate all avenues of what limited disposable income they have.
People are holding on to their money longer. Everyone is demanding more accountability. Although the historic rise and recent decline in fuel prices has provided temporary relief, other business pressures continue to sap our strength and resources. Most economists and government officials agree that 2009 will be continue to be difficult, challenging and taxing but hopefully transitional.
As a business owner or executive, one thing should be crystal clear; the delivery of value should be of paramount concern and focus. There will be little tolerance for service mishaps and gaffes that aren't immediately corrected in a down economy.
Raising Prices in a Recession
As I have stated in previous columns, price increases should not be considered during economic downturns.
While a direct price increase is a "no-no" during a recession, indirect income enhancements are quite another matter.
So how do we mitigate increasing business costs during difficult economic times? The answer is relatively simple: Through the sale of additional value-added based programs.
Turning Green into Green ($)
In a way, you can look at the accelerating green movement as a tremendous opportunity to expand service offerings and thereby revenue capacity. The growth potential in this service segment, can be significant if structured properly, executed appropriately and marketed and sold strategically.
Many of my clients have already headed down this road (offering green service options) and are reaping rewards despite of the recession. Consequently, they have enjoyed new revenue streams that did not exist one year ago.
The Challenge of Change
Oddly, despite the success of those companies, I find a significant number of companies are still resisting putting their efforts and resources into developing this profitable segment.
I'm not necessarily suggesting you radically change the way you service accounts. But you could modify and/or expand your services to include green options to open opportunities for revenue enhancements.
Many of the companies that resist moving forward in this area are the same companies that refused to raise prices year after year. Had they been more proactive, they would be in a better position to weather the current financial storm.
Selling the Value of Green
The key to being effective at selling and marketing these programs is to be able to communicate that the slight increase in cost is trumped by the huge increase in value. Delivering this message is predicated upon how well you communicate your company's belief system to your customer.
The value-quotient buy-in by all members of your staff is critical to making this program successful.
The Green Up-Sell
I suggest that all companies have three basic service options. Option No. 1 is your current integrated pest management (IPM) service program. Option No. 2 involves using green materials as your first line of defense with your current materials as a back-up. Option No. 3 would be an all green program, though at this point few customers will request this.
Your profits from the green movement will be maximized when you are able to convert your existing customer base from Option No. 1 to Option No. 2 at a 5 percent to 10 percent premium price point without incurring any increased costs. This strategy, and the use of similar tactics, will function as a revenue buffer in lieu of direct price increases.
You can reach Goldglantz, president of Elkins Park, Pa.-based Pest Control Marketing Co., at 215-782-1150 or e-mail him at
hgpcmcinc@aol.com.
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