Terminix International is the largest pest control company in the world. The company currently encompasses more than 500 service centers in 14 countries. A unit of Service Master, Terminix International accounts for approximately one-third of its parent company's annual sales.
While Terminix International enjoyed phenomenal success as a sales machine for attracting new customers, this success was seriously undercut by a dismayingly large customer turnover. This turnover stemmed from a variety of causes related to service quality, communication and customer expectation issues. These issues led regular monthly customers to cancel their service until Terminix International found itself losing a third of its customers every year — an estimated annual revenue loss of $60 million.
During my tenure as Vice President of Marketing for Terminix International, I faced the challenge of creating and implementing new strategies for retaining long-term customers.
Before I could reduce the erosion in Terminix International's customer base, I had to determine the root of customers' dissatisfaction and what steps the company was currently taking to change their minds about leaving. I discovered that cancellation of service was extraordinarily easy for customers to request over the phone, with essentially no attempt by the company to change the customer's minds or resolve the issue that made them want to cancel. While investigating the reasons for customers' dissatisfaction, I found that three quarters of the reasons were controllable ones.
Strategic Actions Required
- Gathered existing data, verified through additional market research, to determine the precise reasons customers decided to cancel their service.
- Developed new training programs to resolve any service quality issues in the field and created marketing collateral that built anticipation of value toward the next service check.
- Adjusted the company's cultural attitude by making it a priority to save every customer possible.
- Removed the ability to cancel a customer from a branch office, requiring customers to be transferred to a national call center staffed by retention specialists.
- Developed sales scripts and techniques to overcome objections and help customers fully understand the value of maintaining ongoing service.
- Increased the number of customer satisfaction surveys to get a better idea of what customers wanted and needed.
- The new strategies and systems reduced customer turnover for Terminix International by approximately one third.
- The increased emphasis on customer feedback identified a desire for quarterly, annual or outside-only service as opposed to the fixed monthly service the company had always provided. The company was then able to revamp its service offerings to make them more competitive in the marketplace.
- Terminix International was able to rescue approximately $20 million in annual revenue from the implementation of the new programs and initiatives.
- The new training and sales initiative, known collectively as the "Customer for Life" program, continues to help Terminix International serve its customers better and maintain a stronger client base.